Indian weavers oppose anti-dumping duty by Indian authorities

The Times of India reports that Indian powerloom weavers from Surat city are organizing against the possibility of the Indian antidumping authority imposing anti-dumping duties on imports of Full Draw Yarn from China, Thailand, Taiwan and Vietnam.  The story reports:

In a meeting held on Saturday under the aegis of Federation of Indian Art Silk Weaving Industry (FIASWI), weavers said the anti-dumping duty on FDY would exploit the domestic yarn market and domestic spinners would monopolise the trade.
Sources said the finance ministry is yet to issue a notification on anti-dumping duty on FDY. They (ministry) have given 40 days period for suggestions and objections from the industry on the proposed duty.
Meanwhile, the weavers have decided to raise fund from industry stakeholders in order to contest the issue in Supreme Court and World Trade Organization. They plan to hire a cost accountant, a company secretary and lawyers to present their case before the court.
"We can point out various discrepancies in the preliminary finding of the government on the anti-dumping duty law on FDY. We will submit the discrepancies in our case before SC and WTO," said Ashok Jirawala, president, Varachha Weavers’ Association.
Sources said, weavers have heaved a sigh of relief as election dates are likely to be announced in a day or two and this means delay in implementation of anti-dumping duty.
"The implementation of anti-dumping duty will take another three to four months. Till then the actual users (weavers) have the liberty to import yarn provided they have import licences," said Arun Jariwala, chairman, FIASWI.

The preliminary findings of the Directorate-General of Anti-Dumping and Allied Duties can be accessed here. The investigation was initiated on a complaint by the Association of Synthetic Fibre Industry  and the outcome is now being challenged by the domestic users of the imported goods.

 

India initiates anti-subsidy investigation into imports of sodium nitrite from China

The Hindu Business Line reports that Indian authorities have launched their first anti-subsidy investigation against China.

Following a petition by Deepak Nitrite Ltd, which accounts for more than 50 per cent Indian production, the Designated Authority in the Directorate General of Anti-Dumping & Allied Duties has initiated the countervailing duty probe on imports of sodium nitrite from China. The petitioner has alleged that producers of sodium nitrite from China have benefited from a host of countervailable subsidies. They advanced evidence showing existence of certain schemes/programmes claiming that the same constitute countervailable subsidies to vindicate initiation of a probe.

The actionable Chinese subsidies alleged by the Indian petitioner include "China’s grant programmes, preferential lending, income tax programmes conferred by the Chinese authorities for foreign invested enterprises (FIEs), corporate income tax refund programme for reinvestment of FIE profits in export-oriented enterprises, preferential tax policies for R&D for FIEs, income tax credits on purchases of domestically produced equipment applicable to domestically owned companies, provision of electricity, natural gas, water utilities for less than adequate remuneration and provision of land for less than adequate remuneration."

The period under investiigation is from April 1, 2007 through to March 31, 2008, and China claims that many of its schemes and programmes had been revoked or modified in this period.

India already imposes anti-dumping duty on Chinese sodium nitrite and the news report states that a mid-term review of these has been carried out.

Xinhua reports that the Chinese government has expressed serious concerns over this investigation. It also protested an Indian special safeguards investrigation launched into sodium carbonate imported from China. 

I can’t find details online regarding this subsidy investigation by the Indian authorities, but India seems to have taken the unilateral option of an anti-subsidy investigation. I suspect the measures under challenge may overlap with those challenged by the US and others before the WTO dispute settlement mechanism in WT/DS387/1 as prohibited subsidies under Article 3 of the SCM agreement.  In this request for consultations made as recently as 7 January 2009, the US has listed as many as 107 Chinese measures and claimed that these constitute prohibited subsidies, violate China’s accession protocol, and appear to violate China’s national treatment oligations under GATT article III.  In an earlier request for consultations (WT/DS358/14) the US had made a similar complaint about Chinese subsidies which was mutually settled by an MoU between China and the United States in January 2008.

Well, this should be a long and difficult investigation by India. I suspect that the issue will eventually be mutually settled.

India & Thailand succeed in WTO challenge against US shrimp import measures

Reuters reports:

A WTO dispute settlement panel said a requirement by the United States on India and Thailand to post bonds to cover full anti-dumping duties on imports of shrimp violated trade rules.

The panel, confirming preliminary rulings from October, also backed a Thai complaint against a controversial U.S. method of calculating anti-dumping duties, known as zeroing, which has come increasingly under attack at the WTO.

The panel found the application of the bond to cover the full duties was inconsistent with anti-dumping rules, as was the U.S. use of zeroing to calculate anti-dumping margins.

…

What the dispute was about: 

U.S. Customs introduced a requirement in 2004 that exporters subject to paying anti-dumping duties had to post a bond covering the full amount if there was a risk of default.

Previously affected countries had to post a bond equivalent to only 10 percent of the duties.

India and Thailand argued the requirement to post the full amount was an excessive financial burden on exporters paying the anti-dumping duties.

WTO rules allow a country to levy duties on goods that are “dumped”, or imported at a price below what they are sold for in the exporting country, if that hurts competitors in the importing country.

But there is much controversy about how such anti-dumping duties are calculated and implemented.

The full bond requirement was illegal because WTO rules do not allow an importer to counter dumping with specific measures besides anti-dumping duties.

The U.S. response:

Washington called the findings of the panel “mixed.”

“The panel rejected many of Thailand and India’s claims that an additional bonding requirement is “as such” inconsistent with U.S. obligations under the WTO Anti-dumping Agreement,” said Gretchen Hamel, a spokeswoman for Trade Representative Susan Schwab.

The background:

The case affects Thai seafood exporters such as Thai Union Frozen Products (TUF), Charoen Pokphand Foods and Seafresh Industry.

It will also interest a range of Indian companies including Avanti Feeds, Uniroyal Marine Exports, Waterbase and unlisted exporters Devi Seafoods and Falcon Marine Exports. Thailand is by far the biggest supplier of shrimp to the United States.

According to the U.S. National Marine Fisheries Service, the United States imported $3.9 billion of shrimp in 2007, down from $4.1 billion in 2006.

In the biggest single category, peeled frozen shrimp, accounting for one third of the total, Thailand was the biggest supplier, with nearly one third of that type, followed by Vietnam, Indonesia and India.

Thai exported shrimp end up on the shelves of U.S. retailers such as Wal-Mart Stores.

Total Thai shrimp exports rose about 10 percent in volume terms to 360,000 tonnes in 2007, but in cash terms fell to about 78 billion baht ($1.99 billion) from 84 billion in 2006 because of the strong baht and falling shrimp prices. The Thai shrimp association expects about 60 percent of this year’s exports to go to the United States.

Last year another ruling from the WTO forced the United States to lift anti-dumping duties on shrimp from Ecuador.

 

One immediate point of interest would be an analysis of the difference in the strategies of Thailand and India in this dispute. India’s legal claims went beyond what Thailand argued. More on this and oher aspects of the panel rulings later.

Indian officials wary of EU-US proposal on environmental goods, plus reactions on fisheries subsidies and zeroing

India and Brazil have criticised the new EU-US proposal for a new WTO “green trade agreement”. The proposal envisaged as a two tier process would according to the European Commission compise of these two stages:

• First, agreement to liberalise trade in at least 43 goods with clear environmental benefits drawn from a World Bank list including solar panels and wind mill turbines.
• Second, an even more far-reaching Environmental Goods and Services Agreement (EGSA) to be negotiated by WTO Members, which would foresee further binding commitments to eliminate tariffs and non-tariff barriers in trade in green technologies. In services, highly ambitious and comprehensive commitments would be undertaken that address environmental and climate change challenges such as waste management. Developing countries would be asked only to make contributions proportionate to their level of development.

A two page summary of the proposal is available here.

The Guardian reports on Indian and Brazilian reaction to this proposal:

“We don’t think it’s a basis for negotiation on environmental products,” said Brazil’s top trade negotiator, Roberto Azevedo. “Brazil is deeply disappointed with the proposal. We find the proposal modest, we find it biased and we find it protectionist,” he told a briefing.

Azevedo noted that the U.S.-EU proposal made no reference to biofuels, of which Brazil is a major producer, or the technologies to produce them, and said the list was geared to U.S.-EU products. “Anything that they don’t produce is not on the list,” he said.

Bhatia said India could support proposals to free up trade in goods whose sole use was countering climate change, such as solar panels or windmills, but the list could be extended over time to new models of cars or refrigerators that were more energy-efficient, and that was unacceptable.

“Their list is a disguised effort at getting market access through other means and does not satisfy the mandate for environment,” he said.

India and Brazil are also opposing the new negotiating text on “rules” (view it here) that would allow “zeroing” for calculation of anti-dumping duties.

India’s reaction to the fisheries text, is also not very enthusiastic:

Bhatia said the proposals on banning most fisheries subsidies, welcomed by environmental groups, would cause India difficulty as it tries to improve the living conditions of its fishermen, among the poorest people in the country.

The proposals do give some leeway to developing countries to support fishermen, but he said the conditions, such as setting up approved fisheries management schemes, were too onerous.

India had proposed special treatment for small scale, artisanal fisheries on development grounds. Draft article III of the new fisheries text deals with S&DT for developing countries.

India’s use of anti-dumping

The semi-annual report (2007) of the WTO committee on antidumping for India is out. Some notable facts for the period Jan-June 2007 …

• India initiated 21 new anti-dumping procedures in the first half of 2007.
• It applied 10 new provisional measures in this period.
• It applied 14 new final anti-dumping duties in the same period.

Also as of 30 June 2007, India had a total of 178 final anti-dumping duties in force. Out of these 51 are directed against Chinese exports, 17 against the EU or its member states, 15 against Korea, 11 against the United States and 9 each against Japan and Singapore.