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Tuesday, September 8, 1998

India to air protest over WTO norms abuse

Shefali Mishra  
MUMBAI, Sept 7: At a forthcoming meeting in Geneva on the modalities of proceeding on the World Trade Organisation's (WTO) agenda, India plans to `flag' its concerns on the way the agreements on world trade are being implemented.

The meeting is particularly important as the Uruguay Round agreements are shortly coming up for review by WTO members.

India will table its views in favour of special and differential treatment for developing countries in trade issues, food security, balance of payments (BoP) concerns and implementation of the agreement on textiles and clothing.

It will express itself against the abuse of anti-dumping and anti-subsidy provisions by developed countries, barriers to trade such as rules of origin and the role of the International Monetary Fund (IMF) in the trade regime.

The most important item on the WTO's agenda at the moment is for the General Council to decide on how to proceed to implement the WTO's agenda, including its built-in or existing agenda.

The Indian plan is toemphasise the points which have already been outlined by Commerce Minister Ramakrishna Hegde.

For instance, India has faced much heat on its policy to limit imports under a world-trade clause which allows countries with a weak BoP situation to do so. The pressure on India has been all the greater because the IMF has declared that India's foreign exchange reserves are adequate for it to open up imports.

India plans to assert later this month in Geneva that whereas the IMF is entitled to comment on what constitutes a depletion in a country's foreign reserves, it may not say whether or not its reserves are adequate. That should be the job of the WTO's Committee on BoP.

On the clause which allows imports to be limited on BoP considerations, India plans to assert that the development dimension must be taken into account when assessing a country's foreign exchange reserves.

India is actually fighting a case against America in the WTO on this issue. America says India's BoP is now comfortable and it mustquickly phase out its import restrictions.

India will also stress the over-use of anti-dumping and anti-subsidy mechanisms by developed countries. While the WTO agreement forbids certain kinds of subsidies to domestic producers, dumping is said to occur when an exporter sells below cost or below domestic-market price in a foreign market, causing injury to the importing country's producers.

India will point out that the agreement on anti-dumping stipulates that `constructive remedies' must be explored before countries take anti-dumping action. This is not done, and hence the implementation of the existing agreement is not faithful.

India will also protest so-called chain anti-dumping investigations. Chain investigations mean that as soon as one anti-dumping investigation is closed in a particular case, a new one is begun on the basis of a new complaint. So for an exporter to be once acquitted in an anti-dumping investigation is not the end of the matter: he can be penalised in another investigationstarting immediately after the first.

This has, in fact, happened with India in the case of unbleached cotton fabrics, where three consecutive anti-dumping investigations by the European Union have now resulted in penal anti-dumping duties. India is challenging this in the WTO.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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