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Experience and Cases of Trade Remedies in the FTA: India’s Experience

Experience and Cases of Trade Remedies in the FTA: India’s Experience. P. K. Mahapatra Joint Secretary, Government of India Ministry of Commerce and Industry. Limited experience of FTAs. Signed FTAs/CECA India-Sri Lanka FTA SAFTA-South Asia India-Singapore CECA FTAs Under negotiation

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Experience and Cases of Trade Remedies in the FTA: India’s Experience

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  1. Experience and Cases of Trade Remedies in the FTA:India’s Experience P. K. Mahapatra Joint Secretary, Government of India Ministry of Commerce and Industry

  2. Limited experience of FTAs • Signed FTAs/CECA • India-Sri Lanka FTA • SAFTA-South Asia • India-Singapore CECA • FTAs Under negotiation • BIMSTEC • India- ASEAN • India- Thailand • India- GCC • India- Mauritius

  3. Trade Remedies under FTA • Against Unfair Trade • Anti-Dumping Measures • Anti-Subsidy Measures • Against Fair Trade • Preferential Safeguard Measures

  4. Remedies Against Unfair Trade Practices under FTAs • Antidumping and Anti-subsidy provisions in the respective FTAs • Aligned with the WTO Agreement (ADA and ASCM): • No relaxation in the investigation procedures • However, provides for prior consultation with the partner country and Exchange of factual information before initiation

  5. Experience and issues • Subsidy has not been a measure issue with India’s FTA partners so far; • Antidumping: Major Issues are • Rules of Origin Problem; and • Circumvention • Procedural and substantive Issues • Multi-country investigations involving preferential and non-preferential imports • Cummulative analysis of injury and causation • Price and volume effect analysis

  6. Rules of Origin & Circumvention • Absence of multilateral legal framework • Non-preferential Rules of Origin under WTO not yet finalized • National Law/Many countries don’t have Non Preferential Rules of Origin • However, FTAs have clear Preferential Rules of Origin provisions • Mainly based on Tariff shift and specified local value addition condition • Designated Authorities to issue certificates of rules of origin under FTA

  7. Problems and Issues • External Tariff Differentials • Leads to circumvention • Trade diversion from a country attracting higher duty/ ADD through a FTA partner country • Absence of non-preferential rules of origin poses a problem • Tariff jumping • FTA partner exporting high value added product where the basic raw material has a high tariff protection in the importing partner country • Full Reciprocity is important • Implementation issues • Information sharing • Strict Certification Regime required • Customs Cooperation in investigation of violations

  8. India’s experience so far • Only few cases have been reported so far • Tiles • CFL • Most of them are Trade diversion issues

  9. Safeguards • Preferential Safeguard Measure (PSM) under FTAs • Much more relaxed than the WTO Agreement in terms of procedural and substantive issues • Higher de minimis levels • Flexibility of timing • No measure during Tariff Liberalization Period (TLP) • Moratorium periods

  10. Issues • Initiation • Whether safeguard investigation can be started during TLP? • Provisional Safeguards without investigation in case of “Critical Injury” • How to define “critical Injury” • Whether PSM is a temporary measure to be enforced during the adjustment phase or it is desirable to retain it as a permanent provision to address future needs? • How much time should be given to the industry to adjust under PSM

  11. Issues • Non-application period • Intervening period between two safeguard investigations for the same product • Withdrawal of Concession: • Full or Partial • Compensation • Cross compensation issues • Assured Market Assess in same product through TRQ

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