US Wrongly Penalised India on Steel Duties, WTO Says in Landmark Verdict

An appeals board of the World Trade Organization has ruled that the duties United States levied on Indian steel were in contravention of WTO rules and asked Washington to bring the duties in line with the regulations. 

The case has been considered one of the most complicated ever handled by the 19-year-old Appellate Body of the WTO.

The latest ruling reverses the decision made by a three-member panel in July, noting that US duties had wrongly penalised India for subsidising Tata Steel's export of its manufactured products.

The US imposed duties on Indian steel pipes as a portion of the iron ore used for its manufacture came from India's top iron ore miner NMDC, a state-run organisation. The company also supplies other private steel manufacturers.

US Trade Representative's office said through a spokesman that it considers the result 'mixed,' even as a vast majority of over 80 challenges of India's appeal had been rejected.

It added that the findings help preserve the US ability to address 'unfair subsidization' using anti-subsidy tariffs to create a level playing field for American manufacturers and workers.

The case was launched in 2012 after the US said that NMDC was selling the ore for less than its worth, terming the move as implicit subsidy for private-sector enterprise.

USDC Classification 'erred'

The appeal board noted in its ruling that it found the US Department of Commerce had erred in calling the NMDC a 'public body,' under WTO rules.

The board also noted that the US law was wrong in the way the US International Trade Commission was allowed to assess the impact of dumped and subsidised imports.

American Iron and Steel Institute's president and chief executive, Thomas J. Gibson, said that the WTO ruling had significantly weakened the effectiveness of the US trade law.

He said that the ramifications are bound to go beyond the Indian case; adding that the trade body differed with the findings of the trade negotiators and that the ruling affected the domestic industries ability to effectively fight against dumped and subsidized imports.

He called the ruling 'detrimental to steel businesses and workers.'

US steel imports stood at about 30% for the month ended.

US steel makers United States Steel Corp, JMC Steel Group, Allied Tube and Conduit and Wheatland Tube petitioned the government in 2011 for import relief, leading to the case being filed.