prasad1
Active member
Trump is a bully and crooked businessman, unfortunately, Mody is in this for personal glory.
In the process, India might suffer.
While Prime Minister Narendra Modi wants to make President Donald Trump’s forthcoming visit to India a memorable one, the United States (US) has signalled its desire to drive a hard bargain on trade, making a deal unlikely during the visit. The signal for this came when, just days before the visit, the US stripped India of its status as a “developing” country in the World Trade Organization (WTO). According to the United States Trade Representative (USTR), countries such as India shall not be considered “developing” as regards the imposition of countervailing duties (CVD) is concerned.
Under WTO law, countries are allowed to impose CVD on subsidised imports, hurting importing country’s domestic producers. The imposition of CVD is regulated by the Subsidies and Countervailing Measures (SCM) agreement in the WTO. Under Article 11.9 of the SCM agreement, a CVD investigation against a WTO member country must be terminated if the amount of subsidy is de minimis (too trivial to merit consideration). The de minimis margin is defined as less than 1% ad valorem. However, as per the SCM agreement, the de minimis standard for developing countries is 2% or less. The higher de minimis standard for developing countries is an example of special and differential treatment (S&DT). The US decision to not consider India as a “developing” country means that India would not benefit anymore from the 2% de minimis standard, thus increasing the vulnerability of Indian exports to the US for CVD action.
In order to decide whether a country is “developing” or not, the USTR has come up with the following criteria. First, the per capita Gross National Income (GNI) of a country should be less than $12,375. Second, the country’s share in the world trade should be less than 0.5%. Third, the country should not be a member of the Organization for Economic Cooperation (OECD), or seeking accession to OECD, or of the European Union or Group of Twenty (G20).
Being a low-middle income country, India’s per capita GNI is much lower than $12,375. Nonetheless, India is off the US’s list of “developing” countries because India’s share of world trade is more than 0.5% and India is a member of the G20.
In the process, India might suffer.
While Prime Minister Narendra Modi wants to make President Donald Trump’s forthcoming visit to India a memorable one, the United States (US) has signalled its desire to drive a hard bargain on trade, making a deal unlikely during the visit. The signal for this came when, just days before the visit, the US stripped India of its status as a “developing” country in the World Trade Organization (WTO). According to the United States Trade Representative (USTR), countries such as India shall not be considered “developing” as regards the imposition of countervailing duties (CVD) is concerned.
Under WTO law, countries are allowed to impose CVD on subsidised imports, hurting importing country’s domestic producers. The imposition of CVD is regulated by the Subsidies and Countervailing Measures (SCM) agreement in the WTO. Under Article 11.9 of the SCM agreement, a CVD investigation against a WTO member country must be terminated if the amount of subsidy is de minimis (too trivial to merit consideration). The de minimis margin is defined as less than 1% ad valorem. However, as per the SCM agreement, the de minimis standard for developing countries is 2% or less. The higher de minimis standard for developing countries is an example of special and differential treatment (S&DT). The US decision to not consider India as a “developing” country means that India would not benefit anymore from the 2% de minimis standard, thus increasing the vulnerability of Indian exports to the US for CVD action.
In order to decide whether a country is “developing” or not, the USTR has come up with the following criteria. First, the per capita Gross National Income (GNI) of a country should be less than $12,375. Second, the country’s share in the world trade should be less than 0.5%. Third, the country should not be a member of the Organization for Economic Cooperation (OECD), or seeking accession to OECD, or of the European Union or Group of Twenty (G20).
Being a low-middle income country, India’s per capita GNI is much lower than $12,375. Nonetheless, India is off the US’s list of “developing” countries because India’s share of world trade is more than 0.5% and India is a member of the G20.
The US is being unfair to India on trade. Resist it
The decision to strip India of its ‘developing country’ status, based on a unilateral, arbitrary criteria, is wrong
www.hindustantimes.com
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