In a significant breakthrough in Indo-US trade relations, the two nations mutually agreed to terminate six unresolved trade disputes at the World Trade Organisation (WTO). Meanwhile, India has also decided to lift retaliatory tariffs imposed on 28 American products. This development came during Prime Minister Narendra Modi’s state visit to the United States.
United States Trade Representative, Katherine Tai announced on Thursday that the United States and the Republic of India have agreed to terminate six outstanding disputes at the World Trade Organization. India also agreed to remove retaliatory tariffs, which it had imposed in response to the U.S. Section 232 national security measures on steel and aluminium, on certain U.S. products, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents.
The six World Trade Organisation disputes that will be resolved include three initiated by India and three initiated by the United States.
- United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India
- India – Certain Measures Relating to Solar Cells and Solar Modules
- United States – Certain Measures Relating to the Renewable Energy Sector
- India – Export-Related Measures
- United States – Certain Measures on Steel and Aluminium Products
- India – Additional Duties on Certain Products from the United States
The US Trade Representative attributed the development to Prime Minister Narendra Modi’s visit that highlighted the importance of the Indo-US bilateral ties. Tai added that the agreement India and the US have reached resulted from the intensified bilateral engagement over the last two years.
“Prime Minister Modi’s visit has underscored the importance of the U.S.-India bilateral relationship and our cooperation on a range of shared priorities. Today’s agreement represents the culmination of intensified bilateral engagement over the last two years, including through the U.S.-India Trade Policy Forum, to deepen our economic and trade ties,” Tai said.
Moreover, the US trade representative asserted that the tariff cuts will help to restore and extend market possibilities for US agricultural producers and manufacturers.
“As a result of our efforts, US agricultural producers and manufacturers will now have renewed access to a critical global market, and our trade relationship with one of our closest partners will be strengthened. I look forward to continuing to collaborate with my counterpart, (Indian Commerce and Industry) Minister (Piyush) Goyal, as we identify additional ways to connect our people and economies,” she added.
Citing ‘national security concerns’, the United States slapped 25% and 10% import tariffs on certain steel and aluminium products in 2018. In return, India levied tariffs on 28 American items in June 2019, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents. This triggered the US to file a dispute at the WTO.
Under WTO rules, a member country can file a dispute with the Geneva-based global organisation if it believes that a particular trade action violates the world body’s norms. The first stage in resolving a problem is bilateral consultation. If neither party can address the issue through consultation, either party may request the formation of a dispute resolution panel. The panel’s decision or report can be appealed to the WTO’s Appellate Body.
It is worth noting that the appellate body is not in operation due to discrepancies in how member countries appoint its members. Several cases are already pending before this body. The United States has been obstructing the appointment of members.