WTO Favors US in AG Trade Dispute with India

Christopher Doering for The Des Moines Register

The trade panel struck down a 2007 agricultural ban put in place by India to prevent avian influenza from making its way into the country even though the United States has not had a case of the highly pathogenic disease since 2004. The only other U.S. outbreak detected since then was low-pathogenic, which does not support an import ban.

The WTO ruled India breached numerous international trade rules, including imposing the ban without adequate scientific evidence.

The United States challenged the ban in March 2012.

U.S. trade and agricultural officials declared the WTO decision a major victory for American farmers. “Our farmers and producers deserve a level playing field – and this dispute reflects that we will accept nothing less,” said Agriculture Secretary Tom Vilsack.

The WTO ruling would help U.S. agricultural producers, including Iowa, the nation’s largest egg producer, that have been affected by India’s restrictions. The poultry industry estimates U.S. exports to India could jump to more than $300 million annually after the restrictions are lifted. India has 60 days to appeal the ruling.
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WTO Has Rejected India’s Challenges Against Steel Import Laws: US

LALIT K JHA for Outlook

According to US Trade Representative Michael Froman, the World Trade Organisation panel rejected India’s challenges to key aspects of US countervailing duty laws and regulations, and most of the hundreds of challenges brought by India against case-specific Department of Commerce determinations in a countervailing duty proceeding covering hot-rolled carbon steel flat products from the country.

“This dispute is another example of the Administration’s commitment to fight for American workers and industry by taking strong trade remedy measures against unfair subsidies and defending those actions when challenged by our trading partners,” US Trade Representative Froman said.

“The WTO panel’s findings rejecting most of India’s numerous challenges to our laws and determinations is a significant victory for the United States and for the workers and businesses making these steel products,” Froman said.

In its order, the WTO panel upheld key US countervailing duty laws and regulations regarding the application of “facts available” and the calculation of benefit.

The panel also rejected most of the challenges brought by India against the Department of Commerce’s case-specific determinations, including challenges to over 300 instances of the use of “facts available”, challenges to Commerce’s benchmark calculations and specificity determinations, findings that two Indian entities constituted “public bodies” and were thus subject to WTO subsidy disciplines and Commerce’s inclusion of new subsidy programmes in countervailing duty review proceedings, Froman said.

With respect to the findings by the panel that US measures breach WTO rules in certain respects, the United States is studying those findings and will evaluate all options to ensure that US remedies against unfair subsidies remain strong and effective, he said.

In this dispute, India alleged that several US laws and regulations governing countervailing duty investigations, as well as specific countervailing duty measures imposed on imports of certain hot-rolled carbon steel flat products from India, were inconsistent with provisions of the Agreement on Subsidies and Countervailing Measure (SCM) and the General Agreement on Tariffs and Trade 1994.

The WTO panel rejected most of India’s claims against US laws and regulations under the SCM Agreement, Froman said.

The WTO also rejected all of India’s challenges to US Commerce’s benchmark regulations, which the Department of Commerce uses to determine whether a subsidy has conferred a benefit, Froman said.

WTO also rejected India’s claims that the US statute and regulations allowing for the use of “facts available” in instances where responding companies fail to cooperate with an investigation violates SCM Agreement.

The panel found that the US measure allowing for “cross-cumulation” of dumped and subsidised imports when assessing injury in certain ITC determinations breaches WTO rules.

However, the panel rejected other challenges brought by India against ITC’s injury determination in the underlying investigation, Froman said.

The WTO also rejected most of India’s challenges to the determinations under the SCM Agreement including the US findings that certain entities providing subsidies were “public bodies” acting on behalf of India,” he said.


Arancha González, Executive Director of International Trade Centre explained the purpose of the guide in the foreword: “One of the main outcomes of the World Trade Organization’s 9th Ministerial Conference in Bali, Indonesia, in December 2013 has been an Agreement on Trade Facilitation. Trade facilitation is important because it can have a major impact on bringing down trade transaction costs. This simple guide aims at explaining why the agreement has been proposed, what the main provisions of the agreement are, how it is intended to ease border controls for business, and how business can ensure its voice is heard in the way that governments implement the obligations and specific commitments they have undertaken in reaching the agreement.”

The Agreement on Trade Facilitation was adopted at the World Trade Organization’s 9th Ministerial Conference in Bali, Indonesia, in December 2013. This Agreement is the first major agreement to have been reached by WTO Member States since the conclusion of the Uruguay Round 20 years ago.
Barely was the ink dry on the Uruguay Round of multilateral trade negotiations concluded in 1993 than some WTO Member States were already thinking about the next round. Amongst the issues that featured in this thinking was trade facilitation. The uncertainty over how long it will take to clear a border crossing creates unpredictability, and adds cost to business that are eventually passed on to consumers in countries where consumers are least able to afford them. Uncertainty in supply chains also acts as a disincentive to potential business investors, who rely on efficient supply chains to minimise inventory costs. Companies have to tie up capital in extra holding costs above the levels that should be necessary. This is especially true for businesses in developing countries, which face these delays and uncertainties on a daily basis. Inefficient border procedures also add costs to the very authorities whose job it is to control the borders. Over-zealous inspection can actually delay revenue collection. When authorities are intent on maximizing
collection from import duties and other border taxes by checking every consignment that passes across the border, they cause queues to form at border points; with faster traffic-flows, revenues could be collected more efficiently post-clearance from compliant traders.
Trade facilitation aims at simplifying not only the documentation required to clear goods, but also the procedures employed by border agencies. Focusing on the biggest risks allows border agencies to speed up the flow of goods across the border, and increases the collection of duties. Trade facilitation has been described as a classic ‘win-win’ subject for developing and developed countries, since there should be no losers. Yet some developing countries have been concerned about the potential costs of implementing
trade facilitation commitments, and have sought commitments from developed countries and other donors to assist in the implementation process.
WTO members finally agreed to add trade facilitation to the Doha Development Agenda in 2004. The Agreement reached at Bali in late 2013 provides a framework of rights and obligations that should see reform of border procedures around the world, if legitimate requests from developing countries for technical assistance are met.
The agreement has the potential to be of particular benefit to traders in developing countries, who continually face lengthy and costly border delays. It will be important for business in developing countries to monitor its implementation in the countries with which they trade. This simple guide aims at helping business understand the obligations that developing countries have accepted – or will in due course accept, so that they can work in partnership with governments to arrive at outcomes that will benefit governments and traders alike.

Have We Reached the End of Globalization?

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For much of the last thirty years there has been a steady trend in commerce: global trade has expanded at about twice the pace of the global economy. For example, between 1988 and 2007, global trade grew on average by 6.2 percent a year according to the World Trade Organization. During the same period, the world’s GDP was growing at nearly half that pace: 3.7 percent.

But a strange thing has taken place in the last two years. Growth in global trade has dropped dramatically, to even less than GDP growth. The change leaves one wondering: has the incredible transfer of goods around the world reached some sort of pinnacle? Have we exhausted the drive toward ever-more-globalization?

It’s a fascinating thesis. The world has seen historic developments in the last few decades: the internet, China’s opening up, the rise of emerging markets, fast and cheap travel…all of these trends led to a massive acceleration in global trade.

But have those trends peaked? Could the next big invention, say, 3-D printers, end the need for more and more trade? Imagine a world where you need a new faucet in your restroom. Instead of going to the local store that sells faucets made in China (which contributes to global trade) now you just print out your own faucet, sitting at home or at a local store. Are people also getting more interested in local products compared to global brands.

Joshua Cooper Ramo points out in an essay in Fortune that localism is one the rise – local banking, local manufacturing, and even local sourcing for food and restaurants. Is this simply a pause or could it be more than that? The answer will depend on politics.

The last time the world saw a consistent period where the growth of global trade lagged behind global growth was in the 1920s, 30s, and 40s. One factor was the rise in protectionist policies – as a response in many cases to the Great Depression and the disruption of the gold standard. At one point, under what was known as the Smoot-Hawley tariff, the United States government began imposing import duties of around 60 percent. The move was aimed at protecting domestic farmers, but instead, it exacerbated the depression. It led to a steep drop in trade, and a wave of counter protectionist measures by other countries.

The world has learned its lessons from the Great Depression. But perhaps not as well as it should have.

According to the independent think tank Global Trade Alert, we’re in the midst of a great rise in protectionism. In the 12 months preceding May 2013, governments around the world imposed three times as many protectionist measures than moves to open up. Anti-trade policies are at their highest point since the 2008 financial crisis. According to the Petersen Institute, the rise of these measures cost global trade 93 billion dollars in 2010.

There might be some good news on this front. Last month, the World Trade Organization passed a deal to cut red tape in customs. It’s a small start, and there is a lot more to accomplish. Globalization and trade have produced huge benefits for people, especially the poor, who have been able to make their way out of poverty in a faster growing and more connected global economy. But globalization won’t continue by accident or stealth – politicians will have to help make it happen.

ITC publishes business guide on new WTO trade facilitation agreement by ITC Communications

Following the approval of the Agreement on Trade Facilitation at the World Trade Organization’s (WTO) Ninth Ministerial Conference in Bali, Indonesia, earlier this month, the International Trade Centre (ITC) has published a guide for businesses and policymakers in developing countries explaining the operational elements and benefits of the agreement.

‘It is important that traders understand from the start what new measures will come into force, so that they can make plans accordingly,’ said Arancha González, ITC’s Executive Director. ‘Understanding the rules will also allow businesses to use them to reduce the costs of trading’

The agreement, which will cut red tape and ease and simplify customs formalities, is expected to increase global GDP by US$ 1 trillion and create 21 million jobs, according to the Peterson Institute for International Economics. Meanwhile, the Organisation for Economic Cooperation and Development (OECD) suggests that the agreement could reduce trade transaction costs in developing countries by 13%-15.5%, thereby increasing the competitiveness of developing country exporters.

ITC welcomed the approval of the agreement, calling it an important tool in raising the competitiveness of small and medium-sized enterprises (SMEs) in developing countries. ‘Effective trade facilitating procedures are critical for exporting SMEs as they allow them to connect to and move up value chains,’ Ms. González said.

The guide, which is available free of charge via ITC’s web site, explains the provisions of the agreement in clear and jargon free language, with a focus on what businesses need to know from an operational perspective if they are to use the new rules as a platform to increase trade and decrease the cost and time of exporting.

The guide will help SMEs and trade support institutions understand the commitments taken by their governments and assist them in the identification and prioritization of capacity building needs. ‘The Business Guide will help developing countries determine their implementation needs and will allow capacity building providers, including ITC, to better focus our assistance,’ Ms. González said.

Articles in plain language
For instance, the guide explains how the article on ‘Advance rulings’ aims to address problems with inconsistent classification of goods by customs officials and the uncertainty it creates for traders. ‘Advance rulings are binding decisions by customs…on the classification and origin of the goods in preparation for importation or exportation. Advance rulings facilitate the declaration and consequently the release and clearance process, as the classification has already been determined in the advance ruling and is binding to all customs officers for a period of time,’ the guide explains. It goes on to list in jargon-free language the obligations and the procedure imposed on customs authorities related to advance rulings.

Reducing the on-the-spot decision making authority of individual customs agents thanks to advance rulings will also reduce bribery, the guide says. Corruption continues to be a key problem for developing-country exporters, who identified it as a major constraint on exports in a recent survey conducted by ITC.

The last chapter of the guide describes how the agreement will be implemented, including the special and differential treatment provisions that developing countries may invoke. Developing countries will be able to link the implementation of the commitments to technical assistance and support from donors. WTO member states will have to explicitly apply for delays for each commitment, which will need to be approved by the WTO and the implementation schedule published.

ITC has offered to provide technical assistance to developing countries in the implementation of the agreement: ‘The earlier all the commitments are implemented in a country, the larger the benefits to their SME exporters,’ Ms. González said.

The guide will be shortly available in French and Spanish as well.

Please click here to download the PDF

source: http://www.intracen.org