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 –BIMSTEC –India- ASEAN –India- Thailand –India- GCC –India- Mauritius

Trade Remedies under FTA Against Unfair Trade –Anti-Dumping Measures –Anti-Subsidy Measures Against Fair Trade –Preferential Safeguard Measures

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

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

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

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

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

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

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

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