Delhi launches WTO challenge over Washington tariffs

FE Team | Published: May 25, 2018 00:28:23

GENEVA, May 24 (AFP): India has opened a World Trade Organisation challenge against the steel and aluminium tariffs imposed by the United States, a document circulated to WTO members on Wednesday said. Accusing Washington of "multiple violations" of WTO rules, India formally asked the US for "consultations" over the tariffs of 25 percent on steel and 10 percent on aluminium, which is the first step in a full-blown legal challenge.
The move means India has joined other powerful WTO members-including the European Union and China-in fighting back against President Donald Trump's controversial trade policies.
India also noted that it is already suffering from the tariffs as unlike the EU, Canada, Mexico and others, it has not been granted a provisional exemption.
Russia, another country not granted a waiver, announced on Tuesday that it would retaliate against American products to the tune of nearly $540 million, an amount it said was equivalent to the damage likely to be caused to its domestic industry by the US moves.
Japan, also not offered an exemption, has readied a response that would see tariffs imposed on US goods worth 50 billion yen ($451 million). But India has not yet detailed a specific retaliation.
Instead, it laid out its legal case against the US and voiced hope that the notice would lead to "mutually convenient date and venue for consultations."
Under WTO rules, if 60 days pass without consultations resolving the dispute, India can ask the WTO to set up dispute panel, triggering a long and likely costly legal battle that will almost certainly take years to resolve. But Trump's moves have also complicated the WTO's dispute process itself. His trade envoys have refused to sign off on any new judges to the crucial appellate branch of the Dispute Settlement Body.
If the blockage cannot resolved, the appellate court may be fully paralysed by the end of next year.
Trump sparked fears of a trade war in March when he decided to impose the tariffs on steel aluminium imports, primarily to target China, but also allies, including EU countries as well as Japan.
Marking a departure from a decades-long US-led drive for open and free trade, Trump has claimed that massive flows of imports to the United States threatened national security.
Meanwhile, Japan's trade minister on Thursday pushed back against Washington for considering possible tariffs on automobile imports, a major driver of the Japanese economy.
Hiroshige Seko said the tariffs under consideration-reportedly as high as 25 per cent-would disrupt the global market and go against the rules of the World Trade Organisation.
"If, only if, this measure were to be launched, it would be an extremely broad trade restriction measure. Such restrictive measures would plunge the world market into confusion," Seko told reporters in Tokyo. "It is extremely regrettable."
The reaction was unusually firm for an official from Japan, known for weighing diplomatic language very carefully.
Seko's comments came after US Commerce Secretary Wilbur Ross announced he had initiated a so-called Section 232 investigation on auto trade. The Wall Street Journal reported earlier Wednesday that US President Donald Trump was asking for vehicle import tariffs as high as 25 per cent. The US investigation could provide the legal basis to impose tariffs, if it finds imports threaten US national security.
"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Ross said.
The Trump administration used the same justification to impose steep tariffs on steel and aluminium, raising the spectre of a trade war. The Japanese economy-the world's third largest-relies heavily on exports to the US, particularly of automobiles, as a core driver of overall growth.
Passenger cars make up around 30 per cent of Japan's total exports to the United States.
Japanese government data published on Monday showed that the country's politically sensitive trade surplus with the US edged up in April. Japan logged a surplus of 615.7 billion yen ($5.6 billion), up 4.7 per cent after a 0.3 per cent decline the previous month, driven partly by demand for cars.