WTO Dispute Panels Issue Reports regarding Indian
Tech Tariffs
On 17 April,
the WTO circulated three panel reports in the cases brought by the European Union,
Japan and Chinese Taipei in “India — Tariff Treatment on Certain Goods in the Information
and Communications Technology Sector” (DS582), “India — Tariff Treatment on Certain
Goods” (DS584) and “India — Tariff Treatment on Certain Goods in the Information
and Communications Technology Sector” (DS588) respectively.
Complaint by the European Union
·
Summary of key findings
·
Addendum
·
Findings
and conclusions in pdf format
4.28. The European Union's panel request reads in relevant part:
The measures at issue are inconsistent with India's obligations under the covered
agreements and, in particular, with Article II:1 (a) and (b) of the GATT 1994, because, through those measures, India accords to the EU commerce of certain ICT goods
treatment less favourable than that provided for in its WTO Schedule and does not
exempt those goods from ordinary customs duties or other import duties in excess of
those set forth and provided in its Schedule, respectively.
These measures adversely affect exports of goods from the European Union to India, and they nullify or impair the benefits accruing to the European Union directly or
indirectly under the covered agreements.
4.29. Our examination of the European Union's panel request reveals that it identifies the provisions of
the covered agreement
claimed
to have been violated by
the
measures at issue, i.e. Articles II:1(a) and (b) of the GATT 1994. Furthermore, the panel request plainly connects those
provisions
to the measures at issue by stating that "through those measures, India accords to the EU commerce of certain ICT goods treatment less favourable than that provided for in its WTO Schedule and does not exempt those goods from ordinary customs duties or other import duties in
excess of those set forth and provided in its Schedule, respectively".
4.30.
We therefore conclude that the European Union's panel request provides a brief
summary of the complaint that is sufficient to present the problem clearly,
within the meaning of Article 6.2 of the DSU.
4.3
Conclusion
4.31.
In light of the foregoing, we reject India's preliminary ruling request and
conclude that the European Union's panel request meets the requirements of
Article 6.2 of the DSU.
The summary below was up-to-date at 17
April 2023
Consultations
Complaint by the European
Union
On 2 April 2019, the European Union
requested consultations with India concerning the tariff treatment that India
accords to certain goods in the information and communications technology
sector.
The European Union claimed that the
measures appear to be inconsistent with:
·
Articles II:1(a) and II:1(b) of the GATT
1994.
On 17 April 2019, Singapore and Chinese
Taipei, requested to join the consultations. On 18 April 2019, Canada, Japan,
Thailand and the United States requested to join the consultations. On 19 April
2019, China requested to join the consultations.
On 17 February 2020, the European Union
requested the establishment of a Panel. At its meeting on 28 February and 5
March 2020, the DSB deferred the establishment of a panel.
At
its meeting on 29 June 2020, the DSB established a panel. Brazil, Canada,
China, Indonesia, Japan, Korea, Norway, Pakistan, the Russian Federation,
Singapore, Chinese Taipei, Thailand, Turkey, Ukraine and the United States
reserved their third-party rights.
On
19 August 2020, the European Union requested the Director-General to compose
the panel. On 31 August 2020, the Director-General composed the panel.
On 4
March 2021, the Chair of the panel informed the DSB that, in accordance with
the timetable adopted following consultations with the parties, the panel In
its co estimated that it would issue its final report to the parties in the
second quarter of 2022. The Chair apprised the DSB that the report would be
available to the public once it was circulated to the Members in all three
official languages, and that the date of circulation depends on completion of
translation. On 29 June 2022, the Chair of the panel informed the DSB that the
COVID-19 pandemic and related travel and other restrictions caused further
delays in the proceedings and, as a result, the panel estimated that it would
issue its final report to the parties not before the end of 2022. On 16
December 2022, the Chair of the panel informed the DSB that due to delays
caused by the COVID-19 pandemic and the fact that the same panelists
have been appointed in this dispute and in two other disputes (DS584 and
DS588), the panel now estimated that it would issue its final report to the
parties in the first quarter of 2023.
On
17 April 2023, the panel report was circulated to Members.
The European Union challenged the tariff
treatment that India accorded to certain information communications technology
(ICT) products falling under the following tariff items of India's WTO
Schedule: 8504.40 ex02; 8517.12; 8517.61; 8517.62; 8517.70 ex01, ex02, and
ex03; 8518.30 ex01; and 8544.42 ex01.
The European Union claimed that these
measures lead, or led at the time of the Panel's establishment, to the
application of ordinary customs duties in excess of those set forth in India's
Schedule of Concessions, and, therefore, are or were inconsistent with Articles
II:1(a) and (b) of the GATT 1994.
India argued that: (i)
its binding tariff commitments are set forth in the Information Technology
Agreement (ITA), and those commitments are static and did not change due to
their incorporation into India's WTO Schedule; (ii) pursuant to Article 48 of
the Vienna Convention on the Law of Treaties (Vienna Convention), aspects of
India's WTO Schedule are invalid as a consequence of an error on the part of
India during the transposition of its Schedule from the HS2002 to the HS2007;
and (iii) the errors in India's WTO Schedule are of a formal nature and were
therefore capable of rectification pursuant to the 1980 Decision, such that the
European Union's objection to India's proposed rectification of its Schedule is
inconsistent with the requirements of the 1980 Decision. India also raised several
arguments concerning the nature of the conditions attached to certain tariff
treatment, as well as the tariff classification of certain products.
General issues
concerning India's WTO tariff commitments
·
The Panel rejected India's assertions that
its binding tariff commitments are set forth in the ITA, and found that: (i) the ITA is not a covered agreement within the meaning of
the WTO Agreement and the DSU; and (ii) the ITA is not the source of India's
legal obligations in these disputes. The Panel also held that India's WTO
tariff commitments are not static in nature.
·
The Panel further found that India did not
satisfy the requirements of Article 48 of the Vienna Convention. The Panel
accepted in good faith India's argument that at the time of the transposition
of its HS2002 Schedule into its HS2007 Schedule, India had assumed that the
scope of its WTO commitments was limited to the scope of its ITA undertakings
and that the scope of those tariff commitments would not be expanded through
the HS2007 transposition process. However, the Panel found that India had
failed to demonstrate that this assumption constituted an essential basis of
India's consent to be bound by the certified Schedule. The Panel also found
that India was put on notice of the possibility that its WTO tariff commitments
in its HS2007 Schedule may have expanded from those set forth in its HS2002
Schedule, and similarly, that its WTO tariff commitments in its HS2007 Schedule
may have expanded from those set forth in the ITA. Thus, even if Article 48
applied in WTO dispute settlement (which the Panel did not consider it
necessary to address), the circumstances did not satisfy the requirements of
Articles 48(1) and (2) of the Vienna Convention.
·
The Panel further declined to make findings
on India's request that the Panel find that the European Union violated
paragraph 3 of the 1980 Decision by raising objections to India's requested
rectification unfounded in law, and thereby impeded India's rights to make a
formal rectification to its schedule of concessions under the 1980 Decision.
The Panel found that India's requests were claims, not affirmative defences,
and therefore fell outside the Panel's terms of reference. The Panel also
considered that, even if it made findings on this issue, to the extent that
there remained objections on record to India's rectification request (including
those by WTO Members who were not parties to this dispute), India's WTO
Schedule would remain unmodified, and the findings requested by India would not
modify India's WTO obligations as set forth in its WTO Schedule.
·
Thus, the Panel found that India's WTO tariff
commitments, for purposes of applying Articles II:1(a) and (b) of the GATT
1994, are set forth in its WTO Schedule.
Articles II:1(a) and (b) of the GATT 1994
The Panel found that:
·
India's tariff treatment of products falling
under tariff items 8504.40 ex02, 8517.12, 8517.61, 8517.62, and 8517.70 ex01,
ex02, and ex03 of India's WTO Schedule is inconsistent with Article II:1(b),
first sentence, because: (i) certain such products
are subject to ordinary customs duties in excess of those set forth in India's
WTO Schedule; and (ii) certain such products are subject to ordinary customs
duties in excess of those set forth in India's WTO Schedule unless they satisfy
certain conditions that are not set forth in that WTO Schedule. The Panel also
found that India's tariff treatment of such products is less favourable than
that provided in its WTO Schedule, such that India is acting inconsistently
with Article II:1(a) of the GATT 1994.
·
At the time of the Panel's establishment,
India's tariff treatment of products falling under tariff items 8518.30 ex01
and 8544.42 ex01 was inconsistent with Article II:1(b), first sentence, because
certain such products were subject to ordinary customs duties in excess of
those set forth and provided in India's WTO Schedule unless they satisfied
certain conditions not set forth in that WTO Schedule. The Panel also found
that India's tariff treatment of such products was less favourable than that
provided in its WTO Schedule, such that India was acting inconsistently with
Article II:1(a) of the GATT 1994.
·
As of 1 February 2022, India accords
unconditional duty-free treatment to products falling under tariff items
8518.30 ex01; and 8544.42 ex01, in accordance with the terms of its WTO
Schedule, and is therefore acting consistently with Article II:1(b), first
sentence, of the GATT 1994. The Panel also found that by according to the
commerce of the European Union treatment no less favourable than that provided
for in its WTO Schedule, India's tariff treatment of such products is
consistent with Article II:1(a) of the GATT 1994.
Complaint by Japan
·
Summary of key findings
·
Addendum
·
Just the findings and
conclusions in pdf format
3.27
Japan's panel request reads in relevant part:
II.
LEGAL BASIS FOR THE COMPLAINTS
Japan
considers that each of the foregoing measures is inconsistent with India's
obligations under the following provisions:
i. Article II:1(a) of the GATT 1994 because India has failed to accord to
Japan's commerce treatment no less favourable than that provided for in the
appropriate Part of India's Schedule;
ii.
Article II:1(b) of the GATT 1994 because India has failed to exempt the
products of the territory of Japan, on their importation into India's
territory, from ordinary customs duties in excess of those set forth and
provided in India's Schedule; and
iii.
Article II:1(b) of the GATT 1994 because India has failed to exempt such
products from all other duties or charges of any kind, imposed on or in
connection with the importation, in excess of those imposed on the date of the
GATT 1994 or those directly and mandatorily required to be imposed thereafter
by legislation in force in the territory of India on that date.
As a
result, India's foregoing measures also appear to nullify or impair the
benefits accruing to Japan directly or indirectly within the meaning of Article
XXIII:1 of the GATT 1994.64
3.28
Our examination of Japan's panel request reveals that it identifies the
provisions of the covered agreement claimed to have been violated by the
measures at issue, i.e. Articles II:1(a) and (b) of the GATT 1994. Furthermore,
the panel request plainly connects those provisions to the measures at issue by
briefly explaining how each of the measures listed in the panel request is
inconsistent with India's obligations under the corresponding legal
provisions.65
3.29
We therefore conclude that Japan's panel request provides a brief summary of
the complaint that is sufficient to present the problem clearly, within the
meaning of Article 6.2 of the DSU.
3.3
Conclusion
3.30
In light of the foregoing, we reject India's preliminary ruling request and
conclude that Japan's panel request meets the requirements of Article 6.2 of
the DSU.
Complaint by Chinese Taipei
·
Summary of key findings
·
Addendum
·
Just the findings and
conclusions in pdf format
Summary of the dispute to date
The summary below was up-to-date at 17 April 2023
Consultations
Complaint by Chinese Taipei
On 2 September 2019, Chinese Taipei requested
consultations with India regarding the tariff treatment that India accords to
certain information and communications technology goods.
Chinese Taipei claimed that the measures appear to
be inconsistent with Articles II:1(a) and II:1(b) of the GATT 1994.
On 13 September 2019, Japan requested to join the
consultations. On 17 September 2019, the United States requested to join the
consultations. On 18 September 2019, Singapore requested to join the
consultations. On 19 September, Canada requested to join the consultations. On
25 September 2019, the European Union requested to join the consultations.
Panel and Appellate Body proceedings
On 24 March 2020, Chinese Taipei requested the
establishment of a panel. At its meeting on 29 June 2020, the DSB deferred the
establishment of a panel.
At its meeting on 29 July 2020, the DSB established
a panel. Brazil, Canada, China, the European Union, Indonesia, Japan, Korea,
Norway, Pakistan, the Russian Federation, Singapore, Thailand, Turkey, Ukraine,
the United Kingdom and the United States reserved their third-party rights.
On 19 August
2020, Chinese Taipei requested the Director-General to compose the panel. On 31
August 2020, the Director-General composed the panel.
On 4 March 2021, the Chair of the panel informed
the DSB that, in accordance with the timetable adopted following consultations
with the parties, the panel estimated that it would issue its final report to
the parties in the second quarter of 2022. In its communication, the Chair
apprised the DSB that the report would be available to the public once it was
circulated to the Members in all three official languages, and that the date of
circulation depends on completion of translation. On 29 June 2022, the Chair of
the panel informed the DSB that the COVID-19 pandemic and related travel and
other restrictions caused further delays in the proceedings and, as a result,
the panel estimated that it would issue its final report to the parties not
before the end of 2022. On 16 December 2022, the Chair of the panel informed
the DSB that due to delays caused by the COVID-19 pandemic and the fact that
the same panelists have been appointed in this
dispute and in two other disputes (DS582 and DS584), the panel now estimated
that it would issue its final report to the parties in the first quarter of 2023.
On 17 April
2023, the panel report was circulated to Members.
Chinese Taipei challenged the tariff
treatment that India accorded to certain information communications technology
(ICT) products falling under the following tariff items of India's WTO
Schedule: 8517.12; 8517.61; 8517.62; 8517.70 ex01, ex02, and ex03; and 8518.30
ex01.
Chinese Taipei claimed that these measures
lead, or led at the time of the Panel's establishment, to the application of
ordinary customs duties in excess of those set forth in India's Schedule of
Concessions, and, therefore, are or were therefore inconsistent with Articles
II:1(a) and (b) of the GATT 1994.
India argued that: (i)
its binding tariff commitments are set forth in the Information Technology
Agreement (ITA), and those commitments are static and did not change due to
their incorporation into India's WTO Schedule; (ii) pursuant to Article 48 of
the Vienna Convention on the Law of Treaties (Vienna Convention), aspects of
India's WTO Schedule are invalid as a consequence of an error on the part of
India during the transposition of its Schedule from the HS2002 to the HS2007;
and (iii) the errors in India's WTO Schedule are of a formal nature and were
therefore capable of rectification pursuant to the 1980 Decision, such that
Chinese Taipei's objection to India's proposed rectification of its Schedule is
inconsistent with the requirements of the 1980 Decision. India also raised
several arguments concerning the nature of the conditions attached to certain
tariff treatment, as well as the tariff classification of certain products.
General issues concerning India's WTO tariff commitments
·
The Panel rejected India's assertions that
its binding tariff commitments are set forth in the ITA, and found that: (i) the ITA is not a covered agreement within the meaning of
the WTO Agreement and the DSU; and (ii) the ITA is not the source of India's
legal obligations in these disputes. The Panel also held that India's WTO
tariff commitments are not static in nature.
·
The Panel further found that India did not
satisfy the requirements of Article 48 of the Vienna Convention. The Panel
accepted in good faith India's argument that at the time of the transposition
of its HS2002 Schedule into its HS2007 Schedule, India had assumed that the
scope of its WTO commitments was limited to the scope of its ITA undertakings
and that the scope of those tariff commitments would not be expanded through
the HS2007 transposition process. However, the Panel found that India had
failed to demonstrate that this assumption constituted an essential basis of
India's consent to be bound by the certified Schedule. The Panel also found
that India was put on notice of the possibility that its WTO tariff commitments
in its HS2007 Schedule may have expanded from those set forth in its HS2002
Schedule, and similarly, that its WTO tariff commitments in its HS2007 Schedule
may have expanded from those set forth in the ITA. Thus, even if Article 48
applied in WTO dispute settlement (which the Panel did not consider it
necessary to address), the circumstances did not satisfy the requirements of
Articles 48(1) and (2) of the Vienna Convention.
·
The Panel further declined to make findings
on India's request that the Panel find that Chinese Taipei violated paragraph 3
of the 1980 Decision by raising objections to India's requested rectification
unfounded in law, and thereby impeded India's rights to make a formal rectification
to its schedule of concessions under the 1980 Decision. The Panel found that
India's requests were claims, not affirmative defences, and therefore fell
outside the Panel's terms of reference. The Panel also considered that, even if
it made findings on this issue, to the extent that there remained objections on
record to India's rectification request (including those by WTO Members who
were not parties to this dispute), India's WTO Schedule would remain
unmodified, and the findings requested by India would not modify India's WTO
obligations as set forth in its WTO Schedule.
·
Thus, the Panel found that India's WTO tariff
commitments, for purposes of applying Articles II:1(a) and (b) of the GATT
1994, are set forth in its WTO Schedule.
Articles II:1(a) and (b) of the GATT 1994
The Panel found that:
·
India's tariff treatment of products falling
under tariff items 8517.12, 8517.61, 8517.62, and 8517.70 ex01, ex02, and ex03
of India's WTO Schedule is inconsistent with Article II:1(b), first sentence,
because: (i) certain such products are subject to
ordinary customs duties in excess of those set forth in India's WTO Schedule;
and (ii) certain such products are subject to ordinary customs duties in excess
of those set forth in India's WTO Schedule unless they satisfy certain
conditions that are not set forth in that WTO Schedule. The Panel also found
that India's tariff treatment of such products is less favourable than that
provided in its WTO Schedule, such that India is acting inconsistently with Article
II:1(a) of the GATT 1994.
·
At the time of the Panel's establishment,
India's tariff treatment of products falling under tariff item 8518.30 ex01 was
inconsistent with Article II:1(b), first sentence, because certain such
products were subject to ordinary customs duties in excess of those set forth
and provided in India's WTO Schedule unless they satisfied certain conditions
not set forth in that WTO Schedule. The Panel also found that India's tariff
treatment of such products was less favourable than that provided in its WTO
Schedule, such that India was acting inconsistently with Article II:1(a) of the
GATT 1994.
·
As of 1 February 2022, India accords
unconditional duty-free treatment to products falling under tariff items
8518.30 ex01, in accordance with the terms of its WTO Schedule, and is
therefore acting consistently with Article II:1(b), first sentence, of the GATT
1994. The Panel also found that by according to the commerce of Chinese Taipei
treatment no less favourable than that provided for in its WTO Schedule,
India's tariff treatment of such products is consistent with Article II:1(a) of
the GATT 1994.