The European Union, Russia, China, Japan and eight other countries have backed the US complaint against India’s export promotion schemes at the World Trade Organisation (WTO).
These countries have joined the dispute as third parties. The US has challenged almost all of India’s export programmes at the WTO saying they will harm its workers, citing the Agreement on Subsidies and Countervailing Measures (ASCM). It pegged the subsidies at $7 bn “The number of third parties in the issue is a matter of concern and has serious implications. They are backing the complainant,” said a person aware of the development.
Negotiators had expected other countries to join the dispute when it began in March.
Former commerce secretary Rita Teaotia has said there was a “real” possibility that India could lose the trade dispute.
“It is a much larger issue now with the number of countries targeting India,” the person added. Brazil, Canada, China, Egypt, the EU, Japan, Kazakhstan, Korea, Russia, Sri Lanka, Taiwan and Thailand have become third parties in the dispute.
“All these are interested parties because some countries have market access issues with us while others have problems related to RCEP,” said a Delhi-based trade expert.
China, Korea, Japan and Thailand are members of the Regional Comprehensive Economic Partnership (RCEP) trade agreement along with India and have been pressuring it for deep duty cuts on at least 90 per cent of the traded goods. “Sri Lanka wants to benefit from us losing our export incentives because it competes with us in many exports,” the expert explained.
The WTO has set up a panel under the Philippines’ Jose Antonio S Buencamino as the two sides have failed to find a mutually agreed solution through consultations. The panel’s other members are South Africa’s Leora Blumberg and Switzerland’s Serge Pannatier.
“There is pressure on India to prepare its defence because the setting up of the panel is an important step forward,” said a negotiator. The panel has to circulate its report to all WTO members within 90 days of the date of its composition and the establishment of its terms of reference.