India is likely to approach the WTO’s conflict settlement body on its own, questioning the duty hike on steel and aluminium products by the US, after American authorities made an exception for the European Union, Australia, Canada and Mexico late on Thursday evening.
Sources told TOI that the government was hoping to piggyback the EU, which had vulnerable to act against the US action and was expected to approach the WTO. But with the Europeans now outside the ambit of the hike, the government will now have to change it strategy, said an official, who did not wish to be identified.
Brazil, South Korea, Japan and EU questioned the US action (without naming it) when trade ministers and envoys from over 50 countries met in the Capital on Tuesday. Norway was the only country to name the US, while contesting the action.
Officially, the government has maintained that it is searching legal opinion on the problem. However, experts and former trade officials, who have been consulted, have advised the authorities to take a strong position, although India’s exports of the two industrial commodities do not have a significant share.
The problem also becomes important given that the US is also threatening to drag India to WTO for half-a-dozen export promotion schemes, arguing that the government is subsidising exports, which is against global trade rules, and impacting American businesses and workers.
The recent tension was visible in US Trade Representative Rober Lighthizer’s comments in Washington on Thursday. An agency report quoted him as saying that India may be in a position where it would want to retaliate.
During a Congressional hearing, he told lawmakers, “India has a substantial trade surplus with the US and they have a system which is not particularly open.”
“They have a system that has a number of susceptibility. So, to the extent, there are individuals who have this issue, all I can say is we’ll try to work with them. It’s a serious issue and one that we have considered,” the USTR said.