India Opens Negotiation Window with US for Exemption from Steel and Al Safeguard Duty

· Asks for Consultation while Maintaining US Right for Safeguard Duty

· Claims it Poses No Security Threat to US

With the US refusing to roll back the higher duties on steel and aluminium imports from India, the latter has dragged it to the World Trade Organisation (WTO) and has sought discussions on adequate compensation for the losses.

New Delhi, however, hopes to sort out the issue with Washington at the consultations without having to request for a dispute settlement panel to fight out the matter. “India is clear it in no way deserves to be saddled with the 10 per cent higher import duty on aluminium and 25 per cent duty on steel as it neither poses a security threat to the US nor has it remained unresponsive to the bilateral trade imbalance. If the higher duties on the two items are not rolled back, India has to be compensated as per WTO rules,” the official said.

In its submission to the Committee on Safeguards at the WTO, India said it considered the US measure (of raising import duties on steel and aluminium from select countries) to be an emergency action/safeguard measure within the Agreement on Safeguards.

“In accordance with Article 12.3 read with Article 8.1 of the Agreement on Safeguards, India seeks to exercise its right to consult on the specifics of the measures and its right to determine appropriate trade compensation with the US,” the submission added.

Safeguard agreement

Under the provisions of the Agreement on Safeguards, a member proposing to apply, or seek an extension of, a safeguard measure shall endeavour to maintain a substantially equivalent level of concessions and other obligations between it and the exporting members which would be affected by such a measure. This includes agreeing on trade compensation, with a right of retaliation if no compensation can be agreed upon.

India reserves the right to raise additional issues and make further arguments during consultations, the submission added.

China, which too featured in the list of countries penalised with higher duties on import of steel and aluminium on March 23, announced higher tariffs on a number of items imported from the US in retaliation.

Some others on the original list of targeted partners by the US, such as Canada, Mexico, the EU, Australia, Argentina and South Korea, have got a reprieve. India hopes it too will be exempted.