{"id":257,"date":"2016-12-07T06:04:50","date_gmt":"2016-12-07T06:04:50","guid":{"rendered":"http:\/\/www.classiciasacademy.com\/blog\/?p=257"},"modified":"2024-06-05T17:26:14","modified_gmt":"2024-06-05T11:56:14","slug":"india-and-usa-at-loggerheads-at-wto","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/india-and-usa-at-loggerheads-at-wto\/","title":{"rendered":"India and USA at loggerheads at WTO"},"content":{"rendered":"<p><strong>In News:\u00a0<\/strong><\/p>\n<p><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><b>Background:<\/b><\/span><\/span><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"> India is witnessing new upturn in relation with USA on strategic and defence ties, but it continues to have trade disputes with it at WTO.<\/span><\/span><\/p>\n<p><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">This article highlights the background of recent trade disputes.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India and USA have fought over bilateral and multilateral for as on issues of trade, climate change and intellectual property rights.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">An outgoing US ambassador to India urged both sides to convene a \u201cTrack 1.5 event\u201d when trade relations were plummeting in 2014.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Following are some issues that have strained India-USA trade relations.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><b>Visa hike case-Under consideration<\/b><\/span><\/span><\/p>\n<ul>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India has initiated a WTO dispute proceeding against the USA regarding measures imposing increased fees on certain applicants for H1-B and L1 categories of visas.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India argued that visa fee increase is \u201cdiscriminatory\u201d against Indian firms as these (H-1B and L-1) are the same categories that are most extensively used by Indian service suppliers, especially in the information technology sector.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India has categorically stated that using the visa fee hike to raise revenue (in this case, to finance a biometric tracking system and healthcare requirements of the 9\/11 terror attack victims) would open Pandora\u2019s Box.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">It warned USA that this could lead to other nations deliberately raising customs duties on goods to increase revenue for their domestic programmes.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Such \u2018protectionist\u2019 actions (of hikes in visa fees and duties) will in turn further hurt global trade which is already going through major slowdown.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">USA has denied of visa hike being discriminative against Indian information technology companies as stated that it was general in nature.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">However, Indian companies will be hit as the increased fee is applicable only on companies that employ more than 50 foreigners, or which have more foreigners than locals working for them.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Indian IT industry body Nasscom said the financial implications of the visa fee increase for the technology sector would be around $400 million a year.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Indian move is unusual at the WTO, where most disputes involve goods, tariffs and restrictions, not services.<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><b>Solar dispute case- India lost<\/b><\/span><\/span><\/p>\n<ul>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">In 2010, Jawaharlal Nehru National Solar Mission was launched which had a target of installing 100 GW of solar power by 2022.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Under domestic content requirements (DCR) norm of programme, the Government was willing to enter into long-term purchase agreements at an agreed price with solar power producers, provided they use domestically produced solar cells and modules.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">In 2013, USA registered a case at WTO against India\u2019s domestic content norms alleging violation against principles of Non Discrimination and India\u2019s National Treatment. (National treatment obligations= treating imports on par with domestically produced like products)<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><i>India\u2019s argument<\/i><\/span><\/span><\/p>\n<ul>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">It needs to build robust domestic industries for manufacturing solar cells, solar modules and other products for renewable energy.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India invoked UNFCCC and argued that it had to take steps to achieve energy security, mitigate climate change, and achieve sustainable development. (UNFCCC invocation provides an exception under WTO rules).<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Also, to ensure adequate reserve of domestic manufacturing capacity for solar cells and modules in case of disruption in supply of foreign cells and modules.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">In September 2014, India refrained from imposing anti-dumping duties on cheap solar panels imported from the US and China (despite it being recommended by Directorate General of Anti-Dumping) on basis that there wasn\u2019t enough domestic manufacturing capability.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Thus, India expected that if it did not impose anti-dumping duties on cheap solar panels, USA would withdraw the 2013 case. But the expected did not happen.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">WTO ruling: Came in favour of USA by stating that DCR is inconsistent with national treatment obligations.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Thus, it became visible that WTO panel gave precedence to the WTO rules over international obligations on climate change.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India has challenged WTO panel ruling and is also exploring the option of filing a counter complaint against USA, with several states in USA such as Michigan, Texas and California having also reportedly been accused of employing mandatory local content requirements in the renewable energies sector.<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><b>Poultry dispute case- India lost<\/b><\/span><\/span><\/p>\n<ul>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India had banned poultry import from USA since 2007 by invoking SPS (Sanitary and Phytosanitary Measures) agreement clause of WTO.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Basis: as a precautionary measure to prevent outbreaks of Avian Influenza (AI) and bird flu fears.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">WTO ruling: Indian ban on import of poultry meat, eggs and live pigs from the USA was \u201cinconsistent\u201d with the international norms as<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">They were not based on scientific risk assessment.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">The prohibition was limited to just one country and not to all imports from any country with AI risk. (Discriminatory)<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">USA is now seeking trade sanctions against India and also launch the claim for compensation.<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><b>Intellectual Property Rights<\/b><\/span><\/span><\/p>\n<ul>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">United States Trade Representative\u2019s (USTR) Special 301 Report 2016- has kept India on a priority watch list.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Special 301 report is annual assessment of the state of intellectual property (IP) rights in other countries.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Priority watch list= Countries judged by USTR as having \u201cserious intellectual property rights deficiencies\u201d that require increased USTR attention.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">India has repeatedly asserted that its IP laws are compliant with standards mandated by the WTO\u2019s Trade Related Intellectual Property Rights (TRIPS).<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">However, India has resisted \u2018TRIPS Plus\u2019 requirements in international trade deals.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">TRIPS Plus: Multilateral trade deals like RCEP and TPP are seeking \u2018TRIPS Plus\u2019 standards which would restrict generics drugs exports from India and prevent Indian companies from obtaining the latest technology at affordable prices from abroad.<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\"><i><b>Conclusion<\/b><\/i><\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">It was observed that various ministries (Ministry of commerce, Ministry of New and Renewable Energy, Ministry of Animal Husbandry) handling WTO disputes did not work as a team and hence failed to put a strong case at WTO. Thus, trade disputes have to be taken ownership of and handled jointly by the responsible Ministries and departments and not as individual entities.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">There is a need to have sufficient pool of Indian trade law experts to represent India at WTO Dispute Settlement Body.<\/span><\/span><\/p>\n<p align=\"JUSTIFY\"><span style=\"font-family: 'Book Antiqua', serif;\"><span style=\"font-size: medium;\">Though relations of top leadership are encouraging, India should continue to pursue its stand to upkeep its national interest and also defend its domestic rights.<\/span><\/span><\/p>\n<p><strong>Classic IAS Academy<\/strong>:-<\/p>\n<p>The Classic IAS Academy is the considered the <a href=\"https:\/\/www.classiciasacademy.com\/best-upsc-coaching-in-delhi\"><strong>Best IAS institute in Delhi<\/strong><\/a> for the students. The Classic IAS Academy is aimed to develop amongst its students a competitive attitude along with sound academic base with quality teaching. The Academy also conducts seminars and workshops with the help of experts in order to train the student to think, feel and express like civil servants.<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>In News:\u00a0 Background: India is witnessing new upturn in relation with USA on strategic and defence ties, but it continues to have trade disputes with <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/india-and-usa-at-loggerheads-at-wto\/\" title=\"India and USA at loggerheads at WTO\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":258,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[84],"yoast_head":"<!-- This site is optimized with the Yoast 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