Explained: What does India’s removal from USTR list of developing countries mean?

What is the USTR list of developing and least-developed countries?

In the Uruguay Round Agreements Act (URAA), the US Congress had amended the CVD law in order to confirm US obligations under the World Trade Organisation (WTO) Agreement on Subsidies and Countervailing Measures (SCM). Under this SCM agreement, countries that had not yet reached the status of a developed country were entitled to special treatment for purposes of countervailing measures. This meant that imports from the member countries included in the list by USTR were subject to different thresholds for determining if countervailing subsidies are “de minimis” (too trivial or minor to merit consideration) and whether import volumes are negligible.

Further, as per the Tariff Act of 1930, Congress delegated the responsibility to designate those WTO members whose imports would be subject to these special thresholds to the USTR. USTR is also required to publish this list of designations and update it if necessary in the Federal Register. To determine these designations, the USTR relies on data such as World Bank’s data on Gross National Income (GNI) and trade data obtained from the Trade Data Monitor. This also contains official data from national statistical bureaus, customs authorities, central banks and other such government agencies.

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What changes for India?

In 1998, the USTR published an interim final rule (1998 rule), which designated Subsidy Agreement countries eligible for special de minimis countervailable subsidy and negligible import volume standards under the CVD law. This essentially means the lists USTR had prepared as per the 1998 rule helped it to determine if they were eligible for preferential treatment against CVD investigations or not.

Now, the USTR has revised the lists in the 1998 rule and removed the rule itself terming it “obsolete”. Further, for the purposes of the de minimis threshold, there will be no distinction between developing and least-developed countries, since both such countries will be subject to the same threshold.

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Until February 10, 2020, India was on the USTR’s list of developing countries, making it eligible for preferential treatment against CVD investigations and de minimis thresholds. It will no longer get this benefit.

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