India wins drug case at WTO

In a dispute related to preferential access for exports from some Latin American countries and Pakistan to the European Union, a World Trade Organisation (WTO) dispute settlement panel said India's exports were affected due to the preferences.

The panel, set up at India's request in January 2003, upheld its contention that the European Commission had violated WTO obligations in granting tariff preferences to 12 countries under the drug arrangements window of its generalised system of preferences (GSP) without extending it to other developing nations.

Indian officials said as the preferences were extended to Islamabad following the US campaign in Afghanistan in 2001, Pakistan's exports, particularly textiles, to the EU states had increased significantly.

On the other hand, India's textile and garment exports were affected.

The WTO dispute settlement body said the European Commission had failed to demonstrate that the drug arrangements were justified under the enabling clause, which otherwise allowed developed countries to grant tariff preferences to some developing countries without allowing the same advantage to others.

India would seek the adoption of the panel report at the earliest in accordance with the provisions of WTO dispute settlement understanding, an official statement said here today.

This WTO ruling is likely to provide some relief to the Indian exporters to the European Commission, particularly in apparel sector, which otherwise faces disadvantage by duty concessions to Pakistan under drug arrangements.

It could, however, not be ascertained whether the EU would approach the appellate body for the dispute settlement body's ruling.