India ‘overdoing’ safeguard action: US, European Union

28/10/2014 12:00 - 762 Views

NEW DELHI, OCTOBER 28: India has initiated the largest number of safeguard actions this year to protect its industry against a surge in imports of products such as iron, filament yarn and non-steel items.

The US and the EU, at a recent meeting of the World Trade Organisation’s (WTO) safeguards committee, expressed concerns about the increasing use of safeguard duties by WTO members, which are to be used only as an emergency measure.

Check on rise in imports

Safeguard duties are imposed on imports to check a steep rise in inflow of products which cause injury to the domestic industry. While fingers were not pointed particularly at India this time, earlier this year the EU had accused the country of not meeting the requirements of the safeguard agreement while launching investigations.

The WTO’s safeguard committee reviewed 36 safeguard actions — wherein penal duties are imposed on imports to stop surge in inflow of particular items — the highest number since 2010, and the third highest number ever.

India notified eight safeguard actions, followed by Indonesia with Five, Colombia with four, and Turkey with three, according to figures made public in the safeguard committee meeting. New Delhi announced that it had terminated two of its safeguard investigations — on PX13 and on non-alloyed ingots of unwrought aluminium — which brought down the total number to six.

Protecting industries

New Delhi, however, doesn’t see anything wrong in being the biggest initiator of safeguard investigations as it had not bent rules. “All countries use safeguard duties to protect their domestic industries. The WTO allows it if it is done according to the rules. If a country has a problem with a particular case, it can always be challenged,” an official in India’s Commerce Ministry toldBusinessLine.

The EU urged members to consider using anti-dumping or countervailing duty measures, which target specific countries, before taking a general trade remedy action like safeguards.

India has initiated safeguard investigations this year against items such as sodium citrate, bare elastomeric filament yarn, saturated fatty alcohol, and seamless pipes.

In February, the Finance Ministry imposed safeguard duty of 30 per cent on import of sodium nitrite — a white crystalline powder mostly used in pharmaceuticals, dyes, construction activities and chemical industries.

Source: The Hindu Business Line