India drags US to WTO's safeguard committee for hiking duties on aluminium derivatives

India has solicited consultations with the US, under the WTO's safeguard agreement, against American authorities' decision to hike import duties on derivatives of aluminium products. In January’20, the US exuded a presidential decree stating that aluminium derivatives would be subject to tariff increase.

According to a communication of the World Trade Organisation (WTO), India considers this measure of the US to be a safeguard measure within a provision of General Agreement on Tariffs and Trade 1994 and the Agreement on Safeguards.

"India considers tariff increase through Presidential Proclamation on 24 January 2020 as an extension of earlier safeguard measures (announced in March 2018).

It was said on 7^th April’20: "Accordingly, as an affected Member with significant export interest to the US for the products at issue, India requests consultations with the US. Following the Agreement on Safeguards, India seeks to exercise its right to consult on the specifics of the measures and its right to determine appropriate trade compensation with the US.”

The WTO said that: “India reserves the right to raise additional issues and make further factual and legal arguments, without prejudice to any other remedies provided for under the understanding on rules and procedures governing the settlement of disputes and the covered agreements during consultations.”

It also added, "India looks forward to receiving a prompt reply to this request from the US for a mutually convenient date and venue for the consultations.”

Supplementary, to that, it said: “As per a provision of the Agreement on Safeguards, a WTO member country proposing to apply a safeguard measures shall provide adequate opportunity for prior consultations with those members having a substantial interest as exporters of the product concerned, intending to review the information provided, exchanging views on the measure, and reaching an understanding on ways to achieve the objective set out in the agreement.”

In March’18, the US imposed a 10% tariff on aluminium and following this move, India drags the US to WTO’s safeguard committee and had entreated consultation. Further on that request, the US had announced that the taxes levied are not safeguard duties.

The consultations, nevertheless, do not fall under the World Trade Organisation's (WTO's) dispute settlement system.