India Disputes Memberships of Dispute Panels on Mobiles at WTO

The World Trade Organization (WTO) has set up two dispute panels to examine complaints against India made by the European Union (EU) and Chinese Taipei alleging that import duties imposed by the country on some high-tech products, including mobile phones, violated its commitments under the first IT Agreement (ITA-1).

“The panels will decide on the scope of the ITA-1 of which India is a signatory and whether it covered the high-tech items on which the country had recently imposed import duties, including smart phones. The EU and Chinese Taipei, in their complaints, had said that import duties were levied on the identified ICT items despite commitments of keeping them at zero but India argued that the items were not part of ITA-1,” a Geneva-based official said.

India’s objections

The three panellists were appointed on August 31, by the Director-General of the WTO on the insistence of the EU and Chinese Taipei. Interestingly, at the Dispute Settlement Body’s meeting on August 28, India had raised objections to the EU and Chinese Taipei “being in a rush’’ and seeking the DG’s involvement in setting up the panellists without due discussion between the parties.

Both the EU and Chinese Taipei had countered the objection and pointed out that under the Dispute Settlement Undertaking, the complaining members were entitled to ask the WTO DG to compose the panels since they respected the minimum 20-day period for seeking an agreement with India on the panellists before making their requests. The exercise of this right is not conditional on the WTO secretariat proposing first a slate of names, they added.

The DSB had agreed to set up the dispute panels in June-end and July-end respectively, so the 20-day period requirement had been met. Japan’s request for a panel on the same matter had also been approved by the DSB.

“India would have wanted a greater say in the appointment of the panellists as this is a sensitive case involving the application of ITA-1 in the present scenario when technology is so different. The interpretation on classification of items is key to this dispute,” a Delhi-based trade expert said.

Identified items

The items identified by the EU and Taiwan as the ones where import duties have been imposed by India going against the ITA-1 include telephones for cellular networks or for other wireless networks, base stations, machines for the reception, cameras, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus etc.

India’s argument is that most of these items, in their current smart avatars, did not exist in 1996, so were not covered under the ITA-1. Since India was not party to ITA-2 subsequently negotiated, it had no obligation of keeping import duties on such items at zero per cent and the complaints went against its sovereignty.