New Delhi, Mar 7 (GCCurrentAffairs) Conscious that there is a need to resolve trade issues with the US, the government is keen to have a package that meets the requirements of both sides but there is also a possibility of New Delhi approaching the Geneva-based WTO’s dispute settlement body.
According to sources in the ruling BJP, a lot about such a possibility would depend whether the US is differentiating among the developing countries by excluding India based on WTO’s non-compatibility criteria.
The Ministry of External Affairs has maintained that New Delhi is ready to be ‘flexible’.
Indian government also believes that there is already an agreement between two sides on substantial package. “It is just that there are some areas where for their domestic reasons and also our reasons, compromise is not possible to the extent the US side wants”.
“The US is a major trading partner and we will continue to work with them,” a source said.
The source has also maintained that bilateral dialogues would be much easier way as the WTO route might be a long drawn process.
For the BJP-led NDA, it could be revisiting the 2001 strategy when the then Commerce Minister Murasali Maran, now deceased, eloquently argued India’s case and India had won a case in the WTO against the European Commission in 2003 following its denial of GSP incentives for textiles and drugs exporters.
The Doha argument by Maran was later continued in 2003 by his successor Arun Jaitley at Cancun meet.
Mr Jaitley among other things had sought moderate tariff reductions only after developed countries like the US and the EU, which spent over $ 300 billion annually as farm support, agreed to steep cuts in export subsidies, sources said. The Vajpayee government also had pressed for export subsidies.
India is keen for bilateral negotiations and the 60-day period will be made use of with all vigour.
On March 5, the US decided to withdraw import duty benefits, which was in the range of 1-6 per cent, under its Generalized System of Preferences (GSP) programme.
The GSP programme provides non-reciprocal, duty-free imports of certain products from 121 developing countries. Currently, countries including India, Brazil, Afghanistan and Botswana are availing these benefits.
The US move – if implemented after 60 day notice period – could impact India’s exports worth USD 5.6 billion. There could be also imposition of duties by the US on about 2000 products.
Commerce Secretary Anup Wadhawan had told during a press conference on March 5 that the proposed GSP withdrawal will have a very minimal economic impact.