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India and the US have finally brought the imbroglio over poultry imports to the doors of the World Trade Organization's (WTO)'s dispute settlement body (DSB), a year after the US filed a complaint accusing India of violating global trading rules.
A consultation process that ended in December 2012 failed to reach a solution. "The US was not satisfied with the consultations. Now, the case has started formally. We are very clear on our position. This is a matter which concerns public health and safety. We are going to retaliate very strongly," a senior commerce department official told Business Standard.
According to WTO norms, after a complaint is filed, consultations are held between the two sides involved. If a settlement is reached, the case is dismissed. However, if consultations fail, both sides are asked to form a panel, after which the case is initiated.
India had imposed a ban on importing chicken legs from countries that had recorded cases of avian influenza. The decision was based on a notification issued by the Department of Animal Husbandry last year. The notification stated the import of poultry products would be restricted from countries that had cases of avian influenza, even if those were under the low-pathogenic category (not serious). However, the notification was country-neutral and didn't mention the US separately.
Till September 2011, the US had recorded low-pathogenic cases.
The notification was termed unscientific by the US; it accused India of violating sanitary and phytosanitary measures. In its complaint, the US said India had imposed a non-tariff barrier on its imports. The Indian poultry industry was apprehensive of the fact that cheaper poultry products from the US might affect its business, as it would be compelled to revise prices, the US said.
Another trade dispute between the two countries, one concerning a solar programme, is yet to be taken up by the DSB, as the consultation process for the dispute has just been concluded. "Now, it is the US that has to decide whether it wants to seek a panel or is satisfied with our explanation," the official said.
Early this year, the US had filed a complaint against India at the WTO, alleging discrimination against American products by India's National Solar Mission. It said under the programme, India was discriminating against US solar equipment manufacturers by offering subsidies to those who procured cells locally.
In March 2012, the US commerce department had imposed countervailing duties of 286 per cent on specific steel rods imported from India, arguing these products were heavily subsidised and, therefore, led to an unfair pricing mechanism. After consultations in this case failed, the issue was taken up by DSB. However, the US has asked for more time to structure its case. India had already informed WTO the US had arbitrarily imposed countervailing duties on its steel products, as the steel manufacturers' lobby in the US wasn't able to compete with India's competitive pricing, the official said.
