Dispute over solar cells, modules grows as India rejects US bid for WTO intervention
GENEVA: India and the US clashed in their festering trade dispute over solar cells and solar modules after New Delhi rejected a “vague” request from Washington seeking World Trade Organisation’s permission to impose trade retaliatory measures against India.
In a strong communication circulated by the WTO on Monday, India maintained there is there is “no legal basis” in the US request for authorisation from the WTO’s dispute settlement body (DSB) to suspend concessions under Article 22.2 of the dispute settlement understanding because India has “ceased to impose any measures found inconsistent with the DSB’s rulings and recommendations” in the solar dispute.
On December 19, the US filed a request at the WTO seeking authorisation from the DSB to “suspend concessions or other obligations with respect to India at an annual level based on a formulate commensurate with the trade effects caused to the interests of the US by the failure of India to comply with recommendations and rulings of the DSB.”
The US said “it considers that India has failed to comply” with the DSB’s recommendations for removing the so-called mandatory requirements for manufacturing solar cells and modules by December 14, 2017, as agreed mutually by the two sides.
India lost the solar dispute in September, 2016, after the WTO’s highest court—the Appellate Body— upheld a ruling that India violated core provisions on national treatment and trade-related investment measures. Under national treatment, governments need to treat imported products on par with the domestically manufactured products.
The Appellate Body concurred with the a WTO panel that India’s domestic content requirements for solar cells and modules under the Jawaharlal Nehru Solar Mission amounted to trade-related investment measures as they favour domestic products over imported products.
Subsequently, the US and India agreed that New Delhi will implement the DSB recommendations by December 14, 2017. India said it filed a report before with the DSB informing that it has fully implemented the same.
In its two-page rebuttal, India said the US failed to follow the “critical” steps as prescribed in the dispute settlement understanding before initiating the request for authorisation to suspend trade concessions. The rules for compensation in the event of non-implementation of DSB recommendations require the “the parties to enter into negotiations to agree on mutually acceptable compensation”, India has maintained. Therefore, the US request “is an invalid one, and needs to be withdrawn by the US,” India said.