America President Donald Trump has announced a counter -duty duty on all his major business partners, including China, who impose high import duty on goods sent from the US. He has already announced a 25 percent duty on steel and aluminum imports, which will be applicable from March 12. Announcing the new fee policy, the President said that India is ‘at the top in terms of fee’. Since all these countries are members of the global trade body World Trade Organization (WTO), the US decisions can challenge the principles of the WTO.
Question- What is WTO?
answer- Geneva -based World Trade Organization (WTO) is a multilateral body that makes rules for global trade and disputes disputes between countries. Its main purpose is to promote smooth, predicted and free flow of objects. Both India and America have its members since 1995. These countries have signed several agreements controlling the trade of goods, services and intellectual property. These agreements determine rules and guidelines for international trade.
Question- What are the fees commitments under the World Trade Organization?
answer- One of the major principles of the World Trade Organization is binding, which ensures predictions and stability in global trade. The bound fee is the maximum fee rates that a WTO member commits a commitment under the schedule of his concessions. These commitments are legally binding, which means that a country cannot levy a fee above this level without a re -revival. Applicable duty is the actual duty rates that a country imposes imports. These may be lower than bound rates but cannot exceed the WTO rules without violating the rules.
Question- What will happen if a country levies more than the prescribed fees?
answer- If a member country levies more than its obligation, it violates GATT (general agreement on tariffs and trade) Article 2 of 1994. It states that members should not impose more than the fees or charges listed in their schedules and they cannot impose any other fee or charge that are not specified in their schedules. The affected countries can file a complaint with the WTO dispute settlement body (DSB) against high fees. The first step to resolve the dispute under DSB rules is bilateral consultation. If the consultation fails, the complainant can be allowed to implement the counter -fee or other trade counterplaces after the approval from the WTO.
Question- Can a member of WTO increase his bound fee rates?
answer- Yes. But only by interacting with the affected countries under Article-28 (amendment to schedules) of GATT, where it has to be given compensatory concessions or by implementing emergency provisions such as security measures or national security exceptions in specific cases. During Trump’s previous regime, the US imposed an additional fee of 25 percent on steel and 10 percent on aluminum products on the basis of ‘national security’ under Section 232 of its Trade Act. It cited threats for domestic steel production capacity. However, the WTO has ruled against this measure in many cases. India also imposed retaliation on 28 American goods. The Global Trade Research Initiative (GTRI) said that the WTO dispute committee has said that national security exceptions cannot be used arbitrarily and should be linked to real security concerns during war or emergency situations.
Question- What did America do in response?
answer- According to GTRI, the US refused to follow the WTO’s decision, arguing that it had a sovereign right to determine its national security policies. It has also blocked the WTO Appellate Body, which is hindering the appeal solution.
Question- Why is import duty more in countries like India, while why are the duty less in developed countries like America?
answer- Developing countries like India mainly maintain high import duty to protect domestic industries, generate revenue and support economic growth. These countries often depend on tariffs to protect their emerging areas from foreign competition, promote self -reliance and manage business imbalances. On the other hand, developed countries such as America are low fees, as their industries are already competitive globally and they benefit from open markets, which allow their businesses to reach foreign consumers with minimal trade barriers.
According to GTRI, historically when the WTO was established in 1995, then developed nation-related aspects (trips), service trade liberalization, and developing countries in exchange for commitments on agriculture rules, the developed nation developed countries in return for developing countries Had agreed to maintain the fee, which were primarily in favor of rich countries.
Question- What is special and discriminatory treatment in the World Trade Organization?
answer- The WTO agreements have special provisions that give special rights to developing countries and allow other members to treat them more favorable. For example, developing countries like India can take more time than in more rich countries to reduce their fees and export subsidies.
Question- Does India have the right to fight against 25 percent fee on steel and aluminum and the threat of counter-duty in WTO?
answer- Class Law Associates partner R. According to V. Anuradha, yes.
Question- Will India start a dispute in WTO against fees on steel and aluminum?
answer- Anuradha said that given the current negotiations for the trade agreement between India and US governments, it is practically ‘impossible’ that India would like a long battle in the World Trade Organization. He said, “But my advice would be that do not expect magic from bilateral agreement and be firm on what will be really beneficial for us. We need to seriously consider the counter -duty and the option of the WTO dispute should also be kept open. ”
Question- What should India do?
answer- Anuradha suggested that India along with other members of the WTO need to ensure the continuous relevance of the organization. The WTO is constantly getting crushing due to lack of dispute resolution system. He said, “There is no alternative to effective rules based multilateral system, where we have the strength of shared interests of developing countries. Bilateral deals will only enhance power performance. ”
(PTI/Language)
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