India appeals WTO panel ruling on sugar export subsidies


India has appealed a ruling by the World Trade Organization (WTO) trade dispute settlement panel which ruled that the country’s domestic support measures for sugar and cane were inconsistent with India. global trade standards, an official said.

The appeal was filed by India with the WTO Appellate Body, which is the final authority on these trade disputes.

India stated that the WTO panel ruling made certain “erroneous” findings regarding domestic support programs for sugar cane producers and exports and that the panel’s findings were wholly “unacceptable” to India. .

In its decision of December 14, 2021, the panel recommended that India withdraw its alleged prohibited subsidies for production aid, buffer stock, and marketing and transportation programs within 120 days of the release. adoption of this report.

Ruling in favor of Brazil, Australia and Guatemala in their trade dispute with India over New Delhi’s sugar subsidies, the WTO panel said the support measures are inconsistent with trade rules of the WTO.

The official said the panel’s conclusions were unreasonable and unsupported by WTO rules, and also avoided key issues he was forced to determine.

“Panel’s conclusions on alleged export subsidies undermine logic and rationale. India has appealed to the WTO Appellate Body against the panel’s ruling,” 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 to sugarcane and sugar producers and export subsidies were inconsistent with world trade rules, including various provisions of the WTO Agreement on Agriculture, the Agreement on Subsidies and Countervailing Measures, and General Agreement on Trade and Tariffs ( GATT).

Brazil is the world’s largest producer and exporter of sugar. India is the second largest producer of sugar in the world after Brazil. In December 2020, the government approved a subsidy of Rs.3,500 crore to sweets for the export of 60 lakh tonnes of sweetener during the current marketing year 2020-21 as part of its efforts to help them to settle the unpaid bills of sugar cane producers.

In the previous 2019-20 marketing year (October-September), the government provided a flat-rate export subsidy of Rs 10,448 per tonne. The mills exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set 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 sugar cane producers exceeded the de minimis level of 10 percent of the total value of cane production at sugar, which they argued was inconsistent with the Agreement on Agriculture.

They also pointed to India’s alleged export subsidies, subsidies under the production assistance and buffer stocks programs, and the marketing and transportation program.

Under WTO rules, one or more WTO members can file a complaint with the Geneva-based multilateral body if they believe that a particular trade measure is contrary to WTO standards.

Bilateral consultation is the first step in resolving a dispute. If both parties are unable to resolve the issue through consultation, either party may request the establishment of a dispute settlement panel. The decision or report of the panel may be challenged before the Appellate Body of the World Trade Organization.

It is interesting to note that the WTO Appellate Body is not functioning due to the differences between member countries in appointing the members of this body. More than 20 disputes are already pending before the appeal body. The United States blocks the nomination of members.

Even if the body, which is the final arbiter of these trade disputes, started functioning now, it would take more than a year to seize India’s appeal.

According to trade experts, if the appellate body also issues a ruling against India’s support measures, New Delhi must comply and make the appropriate changes to the way it delivers those measures.

Read also: Omicron “brutal recall” to guarantee equitable access to vaccines: WTO


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