India has appealed against a decision of the WTO Trade Disputes Settlement Panel
New Delhi:
India has appealed against a decision of the World Trade Organization’s (WTO) trade dispute settlement panel, which held that the country’s domestic support measures for sugar and sugarcane are not in line with global trade norms, an official said.
The appeal was filed by India in the Appellate Body of the WTO, which is the final authority on such trade disputes. India has said that the decision of the WTO dispute panel has drawn some “wrong” conclusions about domestic plans to support sugarcane growers and exports and that the panel’s findings are completely “unacceptable”.
The panel, in its decision on December 14, 2021, recommended India to withdraw its alleged restricted subsidies under production support, buffer stock and marketing and transport schemes within 120 days of the adoption of this report.
Ruling in favor of Brazil, Australia and Guatemala in their trade dispute against India over New Delhi’s sugar subsidies, a WTO panel has said the support measures are inconsistent with WTO trade rules.
The official said the dispute panel’s findings are unfair and do not support the WTO rules and also avoid the key issues it was bound to determine.
“The panel’s findings on alleged export subsidies undermine the logic and propriety. India has appealed against the panel’s decision to the WTO’s appellate body,” the official said.
In 2019, Brazil, Australia and Guatemala dragged India into the World Trade Organization’s dispute settlement mechanism, alleging that New Delhi’s domestic support measures for producers and export subsidies of sugarcane and sugar are inconsistent with global trade rules, including on various provisions of the World Trade Organization agreement. Subsidies and countervailing measures, and the General Agreement on Trade and Tariffs (GATT).
Brazil is the largest producer and exporter of sugar in the world. India is the second largest producer of sugar in the world after Brazil. In December 2020, the government had approved a subsidy of Rs 3,500 crore for export of 60 lakh tonnes of sweetener to sugar mills during the current marketing year 2020-21 as part of its efforts to help sugarcane farmers clear dues.
In the last marketing year 2019-20 (October-September), the government had provided a one-time export subsidy of Rs 10,448 per tonne. According to official data, mills exported 5.7 million tonnes of sugar against the mandatory quota of 60 lakh tonnes fixed for the 2019-20 season (October-September).
These three countries, which are members of the World Trade Organization, complained that India’s measures to support sugarcane growers exceeded the minimum level of 10 per cent of the total value of sugarcane production, which according to them was inconsistent with the Agreement on Agriculture. .
He had also flagged India’s alleged export subsidies, subsidies under production support and buffer stock schemes, and marketing and transportation plans.
As per WTO rules, a WTO member or members can file a case with the Geneva-based multilateral body if they feel that a particular trade measure is against WTO norms.
Bilateral consultation is the first step in resolving any dispute. If both the parties are not able to resolve the matter through consultation, one can approach for setting up of Dispute Settlement Panel. The panel’s decision or report can be challenged in the appellate body of the WTO.
Interestingly, the appellate body of the WTO is not functioning due to differences among the member countries for the appointment of members to this body. There are already over 20 disputes pending with the appellate body. The US has been prohibiting the appointment of members.
Even if the body, which is the final arbitrator on such trade disputes, starts functioning now, it will take more than a year to take up India’s appeal.
According to trade experts, if the appellate body also decides against India’s support measures, New Delhi will have to follow suit and make appropriate changes in the way it provides those measures.
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