China retains WTO option on toy import curbs by India

China today did not rule out approaching the World Trade Organization (WTO) over import curbs by India on toys produced by it, even as both the countries have agreed to set up a joint panel to address trade related issues.

“We do not rule out litigation at the WTO. But we are engaging in talks to sort out the issue,” said Zhong Shan, Chinese Vice-Minister of Commerce, after a meeting with Commerce Secretary Gopal K Pillai here.

India had banned import of Chinese toys on January 23 this year. But the curbs were partially relaxed later by allowing import of Chinese toys that conformed to certain international quality standards.

“The Chinese side raised the issue that the ban was directed only at their toys and not against other countries. We told them that the issue had been examined by the government. The standards would be extended to all countries. Domestic manufacturers would also be made to follow the same standards,” Pillai said after the meeting.

China raised this issue in the WTO meeting on technical barriers on Wednesday, where it said the ban was discriminatory and violated basic WTO principles, Reuters reported.

Meanwhile, both the sides have agreed to set up a joint panel to deal with issues related to trade between the countries. This has been done in the backdrop of a surge in export of a large number of products from China to India. The panel will meet once every three months.

The Indian government has initiated investigations on these import surges and is planning to impose safeguards duty, an emergency import duty to curb the inflow of foreign products into the country.

Bilateral trade between India and China is expected to touch $51 billion in 2008-09, registering an increase of nearly 34 per cent over $38 billion in the previous year.