EU drags India to WTO on auto policy

BERLIN, OCT 24: The European Union has dragged India to the World Trade Organisation requesting establishment of a Dispute Settement Panel...

BERLIN, OCT 24: The European Union has dragged India to the World Trade Organisation requesting establishment of a Dispute Settement Panel (DSP) to examine its complaint against New Delhi’s investment regime in the automotive sector.

According to WTO officials, either a panel would be automatically set up if the EU makes a second request or would be incorporated with the panel calready established in respect of the US complaint.

India’s ambassador to WTO S Narayanan yesterday told the DSB meeting that New Delhi had not only explained the salient features of its automotive policy but also the `systemic concerns’ that it had on the establishment of such a panel.

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The meeting was told that India’s automotive policy was in no way inconsistent with its oblligations under GATT and the agreement on trade related investment measures (TRIMS).

Narayanan said the measures questioned by the EU were not trade related investment measures. Narayanan said even if measures challenged were TRIMS, India’s and other developing countries obligations have to be evaluated in light of transition period issues of TRIMS agreement. Like the US, the EU contended that the investment regime violated WTO’S Trade policies and objected to how the automobile sector in India was subject to a series of local content, trade balancing and forex balance requirements.

Expressing disappointment, Narayanan said developing countries’ efforts to achieve even a minium degree of industrialisation were being challenged on the basis of the provisions of the TRIMS agreement.

"The WTO should not create an impression, even in advertently, that its disciplines come in the way of interests of developing countries," he said. He also referred to the decision of WTO general council on May 8 urging countries to exercise `restraint’ regarding transitional period issues and deadlline issues in TRIMS.

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Meanwhile, the EU’s request for another panel on a second issue involving India is expected to become infructuous with New Delhi having taken `appropriate’ measures to meet the concerns of the EU.

Narayanan told the DSB Meeting that India had on October 20 issued appropriate notifications for removing the non-automatic licensing requirement with regard to export of remaining raw hides and skins items and permitting export of these products on payment of export duty.

Narayanan said the EU would be in a position to withdraw its request for a panel once it studied the notification.

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