Archive for the ‘SCM agreement’ Category
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is from April 1, 2007 through to March 31, 2008, and China claims that many of its schemes and programmes had been revoked or modified in this period.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.
