India to contest US countervailing duty on export of steel products.

The commerce ministry has decided to seek consultations with the US under the Dispute Settlement Understanding of the WTO on the countervailing duty (CVD) measures imposed by the Obama administration on India’s export of carbon steel flat products.

The US Department of Commerce had contended that India is extending subsidy to various programmes which are benefitting steel firms. The ministry has challenged the contention saying it does not confer any subsidy to exporters, and imposition of CVD measures is inconsistent to WTO and adversely impacts Indian exports.

A senior official of the commerce ministry argued that the provisions of the US Tariff Act and Code of Federal Regulations are inconsistent under the terms of the WTO Agreement on Subsidies and Countervailing Measures (ASCM). The US had imposed these measures on December 3, 2001 and thereafter extended for five years after a sunset review in 2007.

The ministry said that certain sections of the US Code of Federal Regulations are inconsistent with the ASCM because they require adoption of benchmark prices without first examining whether the remunerations for the provisions of goods is adequate and is consistent with market principles.

In connection with the US commerce department’s observation that NMDC has allegedly sold high-grade iron ore at less-than-adequate remuneration, the official countered saying that classifying the PSU as a “government authority” is incorrect because it is owned by the government and to say that the government provided financial contribution through sale of iron ore fines and lumps is inconsistent with ASCM provisions.

“The cumulation of imports for determination of injury is inconsistent with Article 15.3 of the ASCM because the US included imports from countries which are not subject to simultaneous CVD investigation. The failure to invite India for consultations before including new subsidy allegations within the scope of administrative reviews is inconsistent with Articles 13.1 and 13.2 of the ASCM. India considers that these violations nullify or impair the benefits accruing to it under the ASCM and the General Agreements on Tariffs and Trade 1994,” the commerce ministry said in a May 7 note to the US Department of Commerce.

The US commerce department’s failure to determine the adequacy of the actual remunerations or lack thereof for iron ore is not in sync with the ASCM while concluding that mining rights granted to steel producers constituted as financial contribution is also incorrect.

“The United States has failed to establish that the grant of mining rights conferred a benefit within the meaning of Article 1.1 (b) of the ASCM. The determination that granting captive mining rights of coal to steel producers is de jure specific is inconsistent with Article 2 of ASCM because the grant is based on objective conditions,” the official contended.

The ministry also denied the US commerce department’s view that through the Steel Development Fund the Indian government contributed to the country’s steel companies. He said that contributions in the SDF are made by the participating steel firms and argued that US has failed to gather relevant information in this connection.

Source : indianexpress.com