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TWN
Info Service on WTO and Trade Issues
Geneva, 25 May (D. Ravi Kanth) — At a meeting of the World Trade Organisation’s Dispute Settlement Body (DSB) on 22 May, India blocked a first-time request for the establishment of a dispute panel by China to adjudicate over tariffs applied by India to certain imported high-tech goods, as well as certain incentive measures for solar energy products. In its critique against China that is somewhat akin to the United States’ criticism of Beijing, India argued that the rules-based multilateral trading system, with the WTO at its core, should not support mercantilism that would be tantamount to a “beggar-thy-neighbour” policy. China claimed that India is levying customs duties and other charges on imports of a dozen Information Technology (IT) goods that are in excess of the bound rates set out in India’s schedule of commitments, which, if proved, would be tantamount to a violation of the WTO rules. In its complaint, China alleged that India’s Solar Module Programme provides incentives in the form of cash grants to producers contingent on meeting minimum local value addition requirements that are inconsistent with the WTO rules prohibiting less favourable treatment to imported goods than to like domestic goods, as well as the provision of subsidies that are contingent on the use of domestic over imported goods. Informing members that consultations were held with India with a view to reaching a mutually satisfactory solution, China said regrettably the consultations failed to resolve the dispute, prompting China’s request for a dispute panel. China maintained that members should promote their technological and industrial development through cooperation consistent with WTO rules rather than through restrictive and discriminatory measures that disturb competitive opportunities, disrupt supply chains, increase uncertainties for businesses and operators, and negatively affect the healthy development of global renewable energy and technology sectors. INDIA’S RESPONSE In its response, India said it regretted China’s request for panel establishment, arguing that it was not in a position to accept the request. India said it had engaged in extensive consultations in good faith with a view to reaching a mutually satisfactory resolution, expressing surprise that China has not undertaken an actual consideration of the measures at issue. India was of the view that the measures in question are consistent with WTO law. India also said that it is puzzled that, despite the recognition of the importance of a responsible and diversified supply chain, a country that is estimated to control more than 80% of the global value chain of solar module production feels it necessary to take actions to stymie the legitimate growth of this industry in other countries. The DSB took note of the statements. Pursuant to the Dispute Settlement Understanding (DSU), panel establishment will be automatic if China’s request comes up again before the DSB.
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