The US has dragged India to the World Trade Organization(WTO) for according less favorable treatment to its products.
India had levied higher tariffs on American products in response to the US imposing a global additional tariff of 25% and 10% on import of steel and aluminium product respectively.
The US has said that the additional duties imposed by India appears to nullify or impair the benefits accruing to the US directly or indirectly under the GATT 1994.
The General Agreement on Tariffs and Trade (GATT) is a WTO pact, signed by all member countries of the multilateral body.It aims to promote trade by reducing or eliminating trade barriers like customs duties.
The US has alleged that the duties imposed by India appears to be inconsistent with two norms of GATT.
Firstly,India does not impose these duties on like products originating in the territory of any other WTO member nation.Secondly,India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India’s schedule of concessions.
However,India’s argument in support of its duties is that retaliation is permitted under the WTO’s Agreement on Safeguards.
To this,the US has said that its tariffs are not a safeguard measure but were taken under Section 232 of the US Trade Expansion Act of 1962 on grounds of national security.
If the dispute consultations between the two countries fail to resolve the matter then the US can ask the WTO to set up a panel to decide on the matter.