India, US, and their WTO Dispute on Importation of Certain Agricultural Products
This is from Indian economist Natasha Agarwal:
In a turn of events, on 7th July 2016, the United States made a request pursuant to Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) seeking authorization from the WTO’s Dispute Settlement Body (DSB) to suspend concessions or other obligations under the covered agreements in the amount of US$450 million in 2016, which will be updated annually.[i] The reason for resorting to retaliation being that the US considers that India has failed to comply with the recommendations and rulings of the DSB in the dispute India-Measures Concerning the Importation of Certain Agricultural Products from the United States (DS430) (India – Agricultural Products).
India has repeatedly argued that its measures conform to DSB’s recommendations and rulings in this dispute. [ii] The US, nevertheless, continues to have concerns on India’s efforts. In a DSB meeting on 26th October 2016, the US notes that India’s measure may be substantially more trade restrictive than a measure based on OIE recommendations. As an example, it cites the removal of veterinary certificates from the website of India’s Department of Animal Husbandry. The content of the veterinary certificate that India would require upon the importation of products covered by this dispute, it argues, is an essential element in understanding India’s revised measure.[iii]
In the overall scheme of things, there appears to be no doubt that India has adopted necessary measures to comply with DSB’s rulings and recommendations. In a written communication dated 22rd September 2016[iv], India notes that notification S.O. 2337 (E):
Yet an inquiry on these amendments suggest that they are at best poorly drafted lacking clarity, raising ambiguity, confusion and probably unjustified barriers to trade. For instance, Notification S.O. 2337(E) dated 8th July 2016:
It should be noted that ambiguity on surveillance approaches also has a trickledown effect raising questions on conformity of those clauses that rely on infections or diseases-specific surveillance approach. For example, paragraph 3 of the notification in question states that “.. provided that surveillance approach in accordance with the provisions of the Terrestrial Code of World Organization of Animal Health” which raises ambiguity on surveillance approaches given the explicit mention to “... Article 10.4.27 to 10.4.33” in Article10.4.3 of OIE’s Terrestrial Code.
Moreover, non-conformity to the definition of poultry also affects the conformity of those clauses that are based on the definition of poultry. For instance, sub-paragraph (f) of paragraph 1 of the notification in question states that “poultry products means produce of the poultry as defined in clause (e)..”. Given that clause (e) does not recognize “birds that are kept in captivity... , are not considered to be poultry”, produce of such “poultry” can then be considered as poultry products which stands in non-conformity of OIE’s Terrestrial Code.
Likewise, Notification S.O. 2998 (E) dated 19th September 2016:
The irregularities observed across and throughout both the notifications discussed above which rather make an attempt to regulate the imports of poultry and poultry products such that it is based on OIE’s Terrestrial Code and consistent with the WTO Agreements, particularly with the WTO SPS Agreement, does more harm than good. It not only questions India’s compliance but also provides support to the concerns of the US that India’s measures may be substantially more trade restrictive than a measure based on OIE recommendations, and at instances also appear to retain many of the features of the prior measure found to be inconsistent with WTO’s obligations.
While the US reiterates its view that there is nothing in the WTO rules that required its parties to enter into a sequencing agreement, India can only urge the US to enter the same such that a compliance panel be first established before arbitration on the US request for retaliation proceeds. If the US indeed enters into a sequencing agreement, India risks retaliation if the fact of non-compliance is established. Since the US remains open to engage with India to facilitate compliance with DSB’s recommendations and rulings in this dispute, India, at every cost, should constructively work with the US to reach a resolution. Besides conforming to international standards can only help India.
[i] “Recourse to Article 22.2 of the DSU by the United States”, WT/DS430/16 circulated 8th July 2016.
[ii] WT/DS430/17, WT/DS430/18, WT/DS430/19.
[iii] India requires veterinary certificates for the importation of agricultural products. See http://www.dahd.nic.in/Trade/Sanitary-requirement-veterinary-health-certificate-import-various-livestock-products.
[iv] WT/DS430/19 circulated on 23rd September 2016.
[v] Canada maintains a list of countries officially recognized by Canada as being free of the notifiable avian influenza. See http://www.inspection.gc.ca/animals/terrestrial-animals/diseases/status-by-disease/countries-recognized-as-free-from-the-disease/eng/1343108465347/1343108628931, last accessed 15th November 2016.