Victory for Indian shrimp exporters at WTO

A World Trade Organisation (WTO) dispute settlement panel, on Friday, delivered a victory to the Indian shrimp exporters when it ruled against the United States customs bond imposed on shrimp exporters from India.

The three-member panel of Michael Cartland, Enie Neri de Ross and Graham Sampson said the application of 'enhanced continuous bond requirement (EBR)' on Indian shrimp exports was "inconsistent" with the rules of anti-dumping agreement.

In the final public ruling, the panel maintained that "the application of the EBR to subject shrimp from India prior to the imposition of anti-dumping order is inconsistent with Article 7.2 of the Anti-Dumping Agreement", arguing that "the United States violated Article 18.5 of the Anti-Dumping Agreement and Article 32.6 of the SCM Agreement because it failed to notify the amended CBD to the Anti-Dumping and SCM Committees".

The panel said the customs bond imposed on imports of shrimp from India and Thailand violates World Trade Organisation's anti-dumping rules as well as the General Agreement on Tariffs and Trade (GATT).

Because of the bond, the Indian shrimp exporters had to incur prohibitive costs on their exports. The Indian exporters said it was an 'unreasonable' means of securing duties.

Until now, the US collected a minimum bond equivalent to 10 per cent of the import duties from other country exporters subject to dumping measures to pay.

However, it changed the bond requirement for shrimp exporters from India and Thailand asking them to pay a minimum bond equivalent to the anti-dumping duty margin, multiplied by the value of imports of shrimp in the proceeding year.

India challenged the bond requirement and on India's request a panel was constituted last year to adjudicate over New Delhi's complaint.

The US had argued that the bond requirement in the wake of anti-dumping measures on shrimp imports from India and five other countries was meant to be a 'reasonable security.' The total shrimp exports from these five countries were to the tune of US $2.5 billion in 2003.

On account of the Customs and Border Protection Agency (CBP) bond, over US $250 million were collected from India and other shrimp exporting countries.

The panel's final ruling will require Washington to correct its measure since it is not consistent with the World Trade Organisation rules.

'We are happy with the ruling,' said sources, arguing that it would compel Washington to bring its measure in compliance with the WTO rules.