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US expresses 'concerns' over India's revised measures for importing American poultry products

The United States has said that it still has “concerns” over India’s revised measures for importing American poultry products even as a possible annual retaliation fee of $450 mn slapped by the US hovers over India.

At a Dispute Settlement Body (DSB) meeting on 26 October, the US complained that India continues to modify its measures related to dispute over American poultry imports even though India was supposed to comply with a DSB ruling by June 2016.

New Delhi made additional revisions to its rules for import of ‘certain agricultural products’ on 19 September and informed the WTO on 22 September after the US expressed its concerns that India had not fully complied with WTO'S ruling on the matter.

 US expresses concerns over Indias revised measures for importing American poultry products

Representational image. Reuters

However, American trade diplomats are not satisfied even with the additional revisions.

“Under the September 2016 version of India’s measure, however, the United States continues to have concerns that India’s measures may be substantially more trade restrictive than a measure based on OIE [World Organisation for Animal Health] recommendations,” the US said at the meeting.

As a way of example, the US said that New Delhi’s animal husbandry department has removed from its website the veterinary certificates that would be required to import poultry products into the country. The certificates are an “essential element” to understanding the revised measure, the US argued.

Also, the Washington complained that it had no advance notice about the most recent revision to Indian measures.

“Until our concerns are resolved, the US will continue to preserve and enforce US rights under the DSU [Dispute Settlement Understanding],” the US warned.

A case against India was initiated by Washington at the international trade court in March 2012 after India restricted various American agricultural products, including poultry meat, eggs, and live pigs, to prevent entry of avian influenza into India, for a period of about seven years.

The US said that the concerned Indian policy was discriminatory and violated trade rules under WTO’s Sanitary and Phytosanitary (SPS) agreement.

India lost the case at the DSB in October 2014 and appealed against the ruling, losing again, at the Appellate Board (AB).

India, as per the multilateral body’s rules, was supposed to bring in revised measures in compliance with the DSB ruling by July 2016.

India says that it has already complied with the trade ruling but the US disagrees.

Subsequently, the US slammed a retaliation of a whopping $450 million annually (subject to revision) on India for harming American trade interests by its’s failure to comply with the trade judges' decision by July 2016.

India stated that it "strongly considers" that it has brought the disputed parts of the Livestock Act, 1898 in conformity with the relevant international standards of OIE Terrestrial Animal Health Code ("Terrestrial Code") and rejected Washington’s claims that some disputed measures were still in force.

India added that it was "disappointed" that the US raised the issue at the DSB again "despite the fact that India is engaging in good faith."

Its revised package of measures recognises “disease-free areas” and it has issued fresh guidelines for “recognising a part of a country, zone or compartment for the purpose of trade in poultry and poultry products,” India said at the meeting. This was done via a government notification on 8 July 2016.

India made additional revisions to its measures after a bilateral meeting with the US in September after the latter raised questions on the matter.

The July and September notifications of the guidelines, and the questionnaire, together form the "revised Avian Influenza measures", New Delhi said.

The measure that was found to be inconsistent by the DSB is no longer in force and so India “urged” Washington to terminate the arbitration for the retaliation request of $450mn.

In the same meeting, India again asked Washington to comply with a DSB ruling against steep American countervailing duties (CVD) imposed on imports of Indian hot-rolled carbon steel products. The last date for the US complying with the ruling lapsed on 19 March.

Major Indian companies that include Tata Steel, Jindal, Essar and SAIL could gain substantially if the US withdraws or re-calibrates its penalty structure as per the WTO’s ruling.

The US has said that its Department of Commerce has “self-initiated an investigation” of the matter and that it has the discretion to the timing of this investigation. So no further action is required. New Delhi sees this as a delaying tactic and an attempt to “re-adjudicate the issue where it cannot be adjudicated”.

“Merely stating that they would act in a WTO-consistent manner without either modifying or repealing the measure cannot, ipso facto, result in compliance with WTO obligations,” India stated.

“The US cannot absolve itself from this responsibility by stating that an illusory “discretion” would be exercised in a manner consistent with its international obligations,” India argued.

It “urged” the US to fully comply with the rulings and recommendations of the DSB in this dispute and until then file a status report as it does in other similar disputes.

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Updated Date: Oct 28, 2016 07:53:21 IST