Government appeals against WTO decision on sugarcane trade | Latest news India

Government appeals against WTO decision on sugarcane trade |  Latest news India

India appealed against a ruling by the World Trade Organization (WTO) trade dispute resolution panel that ruled that the country’s domestic support measures for sugar and cane are inconsistent with global trade rules, an official said. .

India’s appeal was lodged with the WTO Appellate Body, which is the final authority in such trade disputes. India has stated that the WTO dispute panel ruling has made certain “wrong” conclusions about domestic schemes to support sugarcane producers and exports and the panel’s conclusions are completely “unacceptable” to India.

In its ruling of December 14, 2021, the panel recommended that India withdraw its alleged prohibited subsidies under the Production Assistance, Reserve Stock and Marketing and Transportation schemes within 120 days of the adoption of this report.

By ruling in favor of Brazil, Australia and Guatemala in their trade dispute against India over the New Delhi sugar subsidies, the WTO panel has ruled that the support measures are inconsistent with WTO trade rules.

The official said the dispute panel’s findings are unreasonable and not supported by WTO rules and they also sidestepped key issues that it was required to determine.

“The panel’s findings on alleged export subsidies undermine logic and rationale. India appealed to the WTO appellate body against the panel’s decision, “the official added.

In 2019, Brazil, Australia and Guatemala dragged India into the WTO dispute settlement mechanism claiming that New Delhi’s domestic support measures for sugarcane and sugar producers and export subsidies are inconsistent with the laws. world trade rules, including various provisions of the WTO Agreement on Agriculture, the Agreement on Subsidies and Countervailing Measures, and the General Agreement on Trade and Tariffs (GATT).

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Brazil is the world’s largest sugar producer and exporter. India is the second largest sugar producer in the world after Brazil. In December 2020, the government had approved a subsidy of 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener during the current 2020-21 business year as part of their efforts to help them pay outstanding fees to sugarcane producers. In the previous marketing year 2019-20 (October-September), the government had provided a lump sum export subsidy of 10,448 per ton. The mills exported 5.7 million tons of sugar compared to the mandatory quota of 6 million tons established for the 2019-20 season (October-September), according to official data.

These three countries, which are members of the WTO, had complained that India’s support measures for sugarcane producers exceed the de minimis level of 10 percent of the total value of sugarcane production, which, according to them, was inconsistent with the Agreement on Agriculture.

They had also pointed to India’s alleged export subsidies, subsidies under production and buffer stock assistance schemes, and the marketing and transportation plan.

Under WTO rules, a WTO member or members can file a case with the Geneva-based multilateral body if they consider that a particular trade measure is against WTO rules. Bilateral consultation is the first step in resolving a dispute. If both parties cannot resolve the matter through consultations, either party may consider establishing a dispute resolution panel. The decision or report of the panel can be challenged in the Appellate Body of the World Trade Organization.

Interestingly, the WTO appellate body is not working due to differences between member countries to appoint members to this body. There are already more than 20 pending disputes with the appeal body. The United States has been blocking the appointment of members.

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Even if the body, which is the final arbiter in such trade disputes, starts work from now on, it would take more than a year to accept India’s appeal. According to trade experts, if the appeal body also passes a ruling against India’s support measures, New Delhi must abide by it and make the necessary changes in the way it provides those measures.

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