'Challenge to Indian solar policy in WTO shows US anti-protectionist'

Outgoing US Trade Representative (USTR) Mike Froman has said that the successful American challenge at the WTO to India's local sourcing conditions in its solar policy sent a message to the rest of the world that America would not tolerate any new form of protectionism.

"Our case against India's local content requirements for India opened up an estimated $1 billion market. And our case against China's illegal duties on US poultry is worth an estimated $1 billion," Froman wrote in an exit-memo on eight years of the outgoing Obama administration released here by the White House on Thursday.

"Challenging India's local content requirements was not just about increasing solar panel exports to India, but was intended to send a message to governments all over the world that the United States would not tolerate this new form of protectionism to exclude our products from their markets, contrary to their WTO commitments," Froman said.

The US had, in 2013, brought a complaint against India before the World Trade Organisation (WTO), alleging violation of global trading rules through the domestic content requirement clause under India's national solar programme launched in 2010.

It mandates that a solar power producer compulsorily source a certain percentage of solar cells and modules from local manufacturers in order to be able to benefit from the government guarantee to purchase the energy produced.

Noting that the US has focused in particular on bringing cases which have broad, systemic benefits, Froman said the USTR had filed as many as 24 cases against other countries before the WTO.

Of these 24 cases, 15 have targeted China's unfair policies that are also disallowed by WTO, ranging from illegal barriers to auto imports, agricultural subsidies to grain producers, discriminatory taxes, barriers to services trade, and barriers to US exports of high-tech steel, he added.

A WTO panel ruled last year that India's domestic content requirement for the solar sector is inconsistent with its treaty obligations.

Ironically, America and the European Union themselves have taken anti-dumping measures against cheaper Chinese solar panels in order to protect their own industries.

India expected to add around 5.5 gigawatt (GW) of solar capacity in 2016, making it the fourth-largest solar market globally.

--IANS

bc/vm