India to file a complaint against Turkey with WTO over yarn imports
India will soon file a complaint with the World Trade Organization against “illegal” duties imposed by Turkey on cotton yarn imports
By Amiti Sen, ET Bureau |
NEW DELHI: India will soon file a complaint with the World Trade Organization against “illegal” duties imposed by Turkey on cotton yarn imports. The commerce and industry ministry is consulting lawyers to file a case before WTO’s Dispute Settlement Body, a senior official said.
India says Turkey has randomly extended safeguard, or additional, import duties of 12%-17% on cotton yarn, making Indian textiles uncompetitive in their sixth largest export market.
“India may approach the dispute settlement board soon,” a government official said. “Consultations are on with lawyers on the validity of the extended safeguard duties.” Turkey had imposed a safeguard duty on cotton yarn imports in July 2008.
As a result, the import levy on yarn in the country had risen 13%-20% from 5%, which was the bound import duty rate or its commitment to WTO. Under the WTO norms, a safeguard duty could be imposed only for three years.
A country seeking to extend this duty beyond this period has to establish through a review that it still needs to protect domestic producers against a surge in imports.
With the three-year term ending in August, Turkey decided to review the process of its extension, but at the same time also imposed provisional duties of 12% to 17% for up to 200 days. “Before filing a dispute, it is necessary to hold consultations with the errant country.
We have already done so and are not happy with the results,” the official said. Experts say Turkey’s proposed integration with EU customs union is already increasing labour costs in the domestic market.
At such a time, Indian exports hold tremendous potential in that country Although a number of other countries, including Indonesia and Peru, are also putting in place protectionist measures to check import of cotton yarn, the Indian industry feels that acting against Turkey would send out a message that India will not accept violation of WTO rules.
India says Turkey has randomly extended safeguard, or additional, import duties of 12%-17% on cotton yarn, making Indian textiles uncompetitive in their sixth largest export market.
“India may approach the dispute settlement board soon,” a government official said. “Consultations are on with lawyers on the validity of the extended safeguard duties.” Turkey had imposed a safeguard duty on cotton yarn imports in July 2008.
As a result, the import levy on yarn in the country had risen 13%-20% from 5%, which was the bound import duty rate or its commitment to WTO. Under the WTO norms, a safeguard duty could be imposed only for three years.
A country seeking to extend this duty beyond this period has to establish through a review that it still needs to protect domestic producers against a surge in imports.
With the three-year term ending in August, Turkey decided to review the process of its extension, but at the same time also imposed provisional duties of 12% to 17% for up to 200 days. “Before filing a dispute, it is necessary to hold consultations with the errant country.
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We have already done so and are not happy with the results,” the official said. Experts say Turkey’s proposed integration with EU customs union is already increasing labour costs in the domestic market.
At such a time, Indian exports hold tremendous potential in that country Although a number of other countries, including Indonesia and Peru, are also putting in place protectionist measures to check import of cotton yarn, the Indian industry feels that acting against Turkey would send out a message that India will not accept violation of WTO rules.
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