WTO dispute panel finds India's sugar subsidy inconsistent with global norms

WTO dispute panel finds India's sugar subsidy inconsistent with global norms
WTO dispute panel finds India's sugar subsidy inconsistent with global norms

NEW DELHI: A dispute panel of the World Trade Organisation (WTO) on Tuesday recommended that India’s support measures for the sugar sector are inconsistent with the global trade norms, the finding which New Delhi said was “completely unacceptable” to the country.

In 2019, Brazil, Australia and Guatemala dragged India into the WTO’s dispute settlement mechanism alleging that New Delhi’s sugar subsidies to farmers are inconsistent with global trade rules. Brazil is the largest producer and exporter of sugar in the world.

The WTO circulated the panel’s reports in the cases brought by Brazil, Australia and Guatemala in ‘India — Measures Concerning Sugar and Sugarcane’, according to a statement by the organisation.

Giving separate conclusions and recommendations on complaints by the three nations, the WTO panel stated that “we find that India is acting inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture”.

It has recommended that India bring its “WTO-inconsistent” measures into conformity with its obligations under the Agreement on Agriculture.

“We conclude that, to the extent that the measures at issue are inconsistent with certain provisions of the Agreement on Agriculture, they have nullified or impaired benefits accruing to Brazil under that Agreement”.

Commenting on the development, India said that there would be no impact of WTO panel’s findings on sugar on any of India’s existing and ongoing policy measures in the sugar sector.

India has initiated all measures necessary to protect its interest and file an appeal at the WTO against the report, to protect the interests of its farmers, an official statement said.

It said that these countries had “wrongly claimed” that domestic support provided by India to sugarcane producers is in excess of the limit allowed by the WTO and that India provides prohibited export subsidies to sugar mills.

The panel in its report has made certain “erroneous” findings about India’s schemes to support sugarcane producers and exports.

The findings “are completely unacceptable” to India, it said adding the panel’s findings are unreasoned and not supported by the WTO rules.

“The Panel has also evaded key issues which it was obliged to determine. Similarly, the panel’s findings on alleged export subsidies undermines logic and rationale. India believes that its measures are consistent with its obligations under the WTO agreements,” it added.

According to WTO rules, a WTO member or members can file a case in the Geneva-based multilateral body if they feel that a particular measure is against the norms of the WTO.

Bilateral consultation is the first step to resolve a dispute. If both the sides are not able to resolve the matter through consultation, either can approach for the establishment of a dispute settlement panel.

December 15, 2021

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