G. Ganapathy Subramaniam
NEW DELHI, March 23
The World Trade Organisation (WTO) is setting up a disputes' settlement
panel (DSP) to consider India's complaint against the US' decision to impose
quota restrictions on import of two categories of woollen garments - women's
jackets and blouses and men's shirts - from India.
After dithering for quite some time after the Textiles Monitoring Body
(TMB) of the WTO expressed its inability to decide whether the quantitative
restriction imposed by the US on import of woollen women's jackets from
India was justified, the Union Government has finally filed a petition
with the WTO demanding the setting up of a disputes panel, sources said.
The TMB, which is mandated to examine all new quota curbs under the WTO
regime, had cleared the US' restrictions on import of woolen blouses and
men's shirts from India.
India's petition for a disputes panel was formally lodged during the
second week of this month after the Textiles Ministry completed the necessary
formalities, it is understood. The WTO is supposed to set up a panel within
60 days after a petition is filed.
Officials said this is India's first call for a disputes panel at the
WTO. Before finally going ahead with the filing of the petition, the Textiles
Ministry obtained the Commerce Ministry's assent for the move.
Officials of the Textiles Ministry are unhappy about the TMB's inability
to decide on the quota restrictions on women's jackets which has forced
India to press for a disputes panel. ``The TMB should have taken a view
on the unilateral move by the US as it is the official function of the
apex textiles body to do so. If the decision was unacceptable to any of
the two sides, then a DSP could have pronounced a final verdict,'' a senior
official said.
The US curbs on woollen jackets and two other garment categories were
imposed on April 18 last. The move to call for a disputes panel has been
hanging fire ever since the TMB confirmed its findings after a review which
favoured India and the US in one category each and expressed its inability
last September to arrive at a decision on the third. However, Mr. Kamal
Nath, the then Textiles Minister, did not okay it since he was contemplating
bilateral discussions with the US to resolve the issue. Officials of the
Ministry were not in favour of such a strategy as they felt it may weaken
India's case. They persisted with the suggestion to call for a disputes
panel and this was cleared after the exit of Mr. Kamal Nath from the Ministry
and the subsequent return of Mr. Venkat Swamy.
During July last, the TMB had gone through the quota curbs imposed by
the US on three categories of Indian woollen garments - men's jackets (category
434), women's jackets (435), and men's shirts and blouses (440). Its decision
favoured India in the case of men's jackets. As two reviews by the TMB,
during July and September last, found that imposition of new curbs on this
item was unjustified, the US Trade Representative's office withdrew it
last December. Textiles Ministry officials feel that the US backtracked
as the arguments at the TMB and the apex body's verdict had made it clear
that Washington's case on this issue would definitely fail the test if
India pushes for a disputes panel.
In the case of blouses and men's shirts, the TMB decided in favour of
the US. Washington's case that a spurt in import of this was injuring its
domestic industry was upheld. The restriction on this category is also
being brought up before the DSP now.
The TMB could not arrive at a decision on the third category under dispute
- women's jackets. Citing lack of consensus as the reason, the TMB left
the issue unresolved. As a result, the quota curbs imposed by the US continue
to be in operation and Indian exporters face the fear of business being
disrupted even though its fairness has not been proved.
``We feel that the restriction imposed by the US on this item is unjustified
and we have urged the WTO to get a disputes panel on the issue operative
at the earliest. Preliminary work is already on and we expect an early
decision,'' senior officials said.
The Indian Government's stiff opposition to the curbs on woollen garments
is more a fight over principles. According to reliable sources, the quota
allocated by the US for the two items under dispute is not likely to be
utilised fully by the time a full year is completed on April 17 next. Therefore,
the US action may not directly result in a blockade of exports solely on
account of the new quota curbs. However, the Ministry is keen to fight
it out since woollen garments is a growing sector which has been showing
promise. Officials of the Ministry also feel that the US should be prevented
from such arbitrary actions in future.