EC disappoints India on dispute settlement panel issue

He clarified that India’s measures were in no way "inconsistent", with its obligations under Article III:4 and XI:1 of the GATT 1994, and Article 2.1 of the Agreement on Trade Related Investment Measures (TRIMs).

In fact, India had clarified in the context of the US request, for the establishment of a similar panel, that the measures referred to by the EC were not trade-related investment measures. However, even if it was accepted, for argument sake, that these measures were TRIMs, India and other developing member countries’ obligations had to be evaluated in the light of Article 4 of the TRIMs agreement, he pointed out.

Narayanan recalled that on a number of occasions, the Indian delegation had pointed out that WTO should not create an impression, even inadvertently, of its disciplines coming in the way of developmental interests of the third world countries.

"We had also indicated that many developing countries’ efforts, to achieve even a minimum degree of industrialisation, are being challenged on the basis of the provisions of the TRIMs agreement. This is undoubtedly a major issue needed to be tackled separately, in the context of the ongoing review of the agreement," he stated. In this connection, he referred to the December 17, 1999 statement of the WTO General Council chairman urging members to exercise due restraint on these matters.

Following the statement, the Council at its meeting on May 8, 2000, took a specific decision on TRIMs transitional period issues. It envisaged that the chairman of the goods council would undertake consultations, as a matter of priority on the issues to address cases of TRIMs not notified or TRIMs in respect of which extension has not been sought.

"It is rather unfortunate that EC should be disregarding the Council chairman’s statement, as well as the specific decision of the Council on the subject of TRIMs transition period issues, Narayanan said. He urged the EC to reflect carefully on the impression that its action was likely to create among the developing countries about the relevance of the Council’s decision, which was meant to be the confidence-building measures.

More recently, when the chairman of the Council was holding consultations on various implementation issues, especially those relating to TRIMs, it was decided to temporarily defer this matter, since chairman of Council, on trade in goods, was already holding consultations in this regard.