Seafood exporters have reason to smile

KOCHI: Seafood exporters in the country have won a victory of sorts, with the WTO disputes settlement body ruling, in its preliminary determination, that the requirement to execute a customs bond for exporting to the US is against accepted international trade practices.

The final determination by WTO on this issue will be in December. Since there is an appeal provision in the ruling, the US can file for a review. The requirement that the exporters have to execute a bond was introduced after the US Department of Commerce announced an anti-dumping duty against shrimp imported from India and a few other countries.

The WTO panel found the requirement that the exporters have to execute a cash bond for exporting to the US is not compatible with WTO provisions. The exporters had to pay 10.2% of the total value of exports in the previous year if they had to export to the US.

As a result of the huge financial burden posed by the requirement of the bond, many exporters had stopped exporting to the US. The total number of exporters exporting to that country had come down from 250-300 a few years back to just 60-70 at present.

India had earlier challenged the requirement that exporters to the US should execute a cash bond. Speaking to ET, AJ Tharakan, president of the Seafood Exporters Federation of India said the result of the preliminary determination is “very positive”.

It was in 2005 that the US Customs and Border Protection imposed the customs bond provision on the seafood exporters from the country. The disputes panel’s verdict was also in favour of Thailand seafood export industry. Sources said that India would also approach WTO against the US practice of “zeroing” while calculating the anti-dumping duty.