As requested by Japan, the World Trade Organization (WTO) has set up a dispute settlement panel to decide the row over India’s imposition of a safeguard duty on imports of iron and steel products.
MetalMiner has reported on this case in the past. Japan’s request was made after New Delhi imposed safeguard duties on several iron and steel products, which India claimed violated global trade rules.
India’s finance ministry imposed definitive safeguard duties on imports of hot-rolled flat products of non-alloy steel in coils to counter a surge in imports from several countries, including Japan. India’s stand has been that such cheap imports “caused injury to domestic steel industries.”
As both the nations failed to arrive at a solution, Japan petitioned the WTO for the formation of a dispute resolution panel.
Soon after the WTO announcement, though, India objected to Japan’s WTO request for a “prompt’’ resolution of its dispute against India’s duties on steel imports.
India’s contention is that there’s “no rationale” for treating the dispute any more urgently than other WTO disputes it’s involved in and the same standard should be applied to all disputes.
In December, Japan dragged India to the WTO against measures taken on imports of iron and steel products. Incidentally, Japan is the second-largest steel producer in the world.
The dispute assumes some amount of significance as both India and Japan signed a comprehensive free trade agreement, meant to avoid this type of arbitration, in 2011.
This was Japan’s second attempt to ask the WTO to set up a panel after the first was blocked by India in March. India expressed disappointment over Japan’s insistence on the WTO panel despite its “sincere efforts” to resolve the matter in a bilateral manner.
It normally takes about 20 months to settle a dispute at the WTO, but according to WTO rules, in cases of urgency, the parties to the dispute, panels and the Appellate Body make every effort to accelerate the proceedings.
The Japanese government reportedly estimated that the tariffs could cost Japanese steel companies about $220 million through March 2018.
The safeguard duties imposed by India also gave rise to complaints from other WTO members.