WTO report on shrimp export crucial for India

The opinion of a World Trade Organisation (WTO) panel in its recent report that US anti-dumping duties on shrimp imports from Ecuador broke international trade rules should prove crucial for the country's shrimp exports as well.

Another panel of the world trade body is examining the case of India and Thailand, and exporters here are hopeful of a favourable decision on the lines of the aforesaid report.

Upholding the requests of India and Thailand, the WTO had constituted the panel to examine the anti-dumping duty and customs bond imposed by the US government in November last year. The dispute settlement body of the WTO had decided to appoint the panel after several rounds of discussions with these countries turned futile.

India had formally lodged a complaint on June 6, 2006 against the US, as the US Department of Commerce had levied the duty (10 per cent) without adhering to "zeroing principles" of anti-dumping duty. The US government had imposed the duty by allowing a petition filed by Southern Shrimp Alliance "� an association of local shrimp manufacturers. It had seriously hit the country's exports, as US is the second-largest importer of its marine products.

The duty was levied on several other countries such as Thailand, China, Brazil, Ecuador and Vietnam in July 2004, as well. The US had also enforced customs bond on importers of certain frozen warm water shrimp from these countries.

The US, on February 1, 2005, levied definitive anti-dumping measures, which required importers to make cash deposits equal to the estimated weighted average of dumping margins. So all importers, who wanted to continue imports from India and other duty-bound nations, were forced to comply with the continuous bond requirement.

The US Commerce Department is currently reviewing the anti-dumping issue and a decision is expected soon. New Delhi had argued that the US act was inconsistent with several anti-dumping articles of the GATT and Marrakesh agreement that led to the establishment of WTO.

In its latest 64-page report, the WTO panel found that the duties the US imposed in February 2004 because of alleged price dumping by Ecuadorian exporters were inflated because of Washington's use of a practice known as "zeroing" to calculate whether the shrimps were being sold at below-cost price. According to the previous panel decisions, "zeroing" leads to inflated margins of dumping, and, thus, higher duties.

The case is now likely to go to the WTO's dispute settlement arm, which could request the US to bring its anti-dumping measures in line with global trade rules.