WTO Members Raise Concerns On U.S. Import Duty Hike

Concerned over U.S. imposing import duty on steel and aluminium, certain WTO members at the informal ministerial meeting today called for urgent and coordinated actions to promote global trade and strengthen the multilateral body.

The issue of duty imposition by the U.S. was raised by several participants in the informal meeting of the WTO, which was convened by India.

The two-day conference, which concluded today, had representations from 53 World Trade Organisation member countries, including the U.S., China, and the EU. It was also attended by a representative of the Pakistan High Commission in India.

Commerce and Industry Minister Suresh Prabhu said this meeting was important, considering the recent trends that the world is witnessing, particularly countries taking unilateral actions which in long term will “harm everybody”. “Therefore we must ensure that we keep the global trade growing," he told reporters, adding that the issue of duty imposition by the U.S. was raised by some members.

He said that in some interventions, the need for WTO members taking "urgent and coordinated action to address the underlying issues was highlighted". Although India is not a major exporters of steel and aluminium to the U.S., it will take up the matter with American authorities, Prabhu added.

On this, WTO Director General Roberto Azevedo too said that in recent weeks, there was a rise in tensions in trade relations around the globe and this is a real concern. "...these measures, for whatever reasons, they have a very real potential for escalation because of the possibility of responses from other partners with trade restrictive measures as well. And I think is something we should avoid and that is what we heard today," the WTO chief said.

Many countries expressed their concerns on this as there is potential for further escalation, he said, adding "we have to proceed very carefully and try to work within the framework of the WTO".

In the meeting, the food security concerns related to agriculture were discussed and it was "strongly" put forward by countries, including India.

Besides, appointment of members of the appellate body of WTO, Doha Development Agenda, subsidy on fisheries, e-commerce, investment facilitation, special and differential treatment to developing nations and gender issues were discussed. Besides, WTO members also deliberated on food security and special treatment for developing nations at their informal ministerial conference here.

Several members have expressed fear that the decision of the U.S. administration to hike import duties on aluminium and steel have the "real potential" of escalation of trade war as other countries may respond with import restrictive measures.

This issue, Azevedo said should be resolved within the multilateral framework as this is the only way to avoid a very disruptive and unpredictable scenario in global trade.

Prabhu, in his concluding remarks, said almost all members underlined the need to "preserve and enhance" the functioning and credibility of the rule-based multilateral trading system.

With reference to matters related to farm sector, the minister said issues concerning reform in domestic support, a permanent solution on public stock holding for food security purpose, cotton and agriculture special safeguard mechanism were identified as priority areas in some interventions during the meeting.

When asked about the outcome of the meet, Prabhu said: "we never expected any outcome, nor was we working for it. Every country had free and frank discussion. I am sure that this meeting will be another building block for building trust, confidence and bringing countries together".

On the issue of appointment of members in the WTO's appellate body, Azevedo said several members raised concerns about this and he is engaged with members to find a solution to this problem. "This is a serious concern for all of us," he said.

Prabhu said that almost all the participants sought expeditious and immediate resolution of the impasse in the appointment of appellate body member.

India has been keenly pushing agriculture issues at the WTO. It has also been raising its voice against bringing new issues, especially those which are not directly linked to trade, to the negotiating table.

The talks at the WTO's 11th ministerial conference collapsed after the US went back on its commitment to find a permanent solution to the public food stockholding issue, a key matter for India.

The US has imposed 25 per cent imports duty on certain steel items and 10 per cent on aluminium.

Further, during his intervention, Prabhu said that the new issues could come on the negotiating table only if they are trade related.

"Both the negotiating and dispute settlement mechanism of the WTO are almost paralysed. We should ensure that the system is not further weakened by protectionist unilateral trade measures," he said.