India, on June 15, levied higher tariffs on American apples, walnuts, chickpeas, lentils, boric acid and diagnostic reagents after deferring them multiple times in the last one year in response to the US imposing a global additional tariff of 25% and 10% on import of steel and aluminium products, respectively, in March last year.
The US, in its request for dispute consultations, claimed that the additional duties, which India imposed through a series of notifications issued between June 2018 and June 2019, are inconsistent with provisions of the WTO’s General Agreement on Tariffs and Trade by unfairly discriminating against US imports vis-à-vis those from other WTO members.
While India has argued that its duties are permitted under the WTO’s Agreement on Safeguards, the US countered saying that its tariffs are not a safeguard measure but were taken under Section 232 of the US Trade Expansion Act of 1962 on grounds of national security.
Washington’s move comes ahead of the two sides resuming talks next week to resolve their bilateral trade issues.
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
In addition to India, the US has initiated dispute proceedings against similar actions taken by the China, the European Union, Turkey, and Russia. Further proceedings against Canada and Mexico were ended when the US lifted the steel and aluminum duties on imports from the two countries and Canada and Mexico lifted their counter-measures against US imports.