New Delhi: The European Union has reportedly said that it will impose retaliatory tariffs on India if New Delhi doesn’t abide by a World Trade Organisation ruling and do away with the customs duties it imposes on electronic goods like smartphones.
“In the event there is an appeal to the non-functioning WTO Appellate Body (i.e. an ‘appeal into the void’), the EU has in place legislation (the Enforcement Regulation) that allows it to enforce its rights by imposing customs duties or other restrictions in response to an appeal into the void, should the EU decide to do so,” an EU spokesperson told the Business Standard.
According to the newspaper, the EU has claimed that 600 million euros of its technology exports to India were adversely impacted annually due to India’s imposition of tariffs on ICT products.
Last week, on April 17, the WTO’s Dispute Settlement Body had said that India’s tariffs on information and communication technology (ICT) violated the country’s zero-tariff commitment under the Information Technology Agreement enforced by the multilateral trade body.
Indian officials, Business Standard reported, have said since that New Delhi plans to appeal this decision at the Appellate Body, and so it has no immediate repercussions. However, the Appellate Body has been non-functional for a while now as the US has been blocking the appointment of judges. Perhaps that is why the EU spokesperson referred to it as “the void”.
The EU spokesperson also told the newspaper that India did have the right to appeal the Dispute Settlement Body’s decision. “India has consistently underlined and made clear its support for the multilateral trading system and the WTO. In this context, it has the right to appeal the panel report if it genuinely considers that there is a need to correct it. In the absence of a WTO Appellate Body, this would imply an appeal to the MPIA (multi-party interim appeal arbitration arrangement) or using alternative appeal arrangements. The EU has over the last months offered to engage in discussions with India on these two different appeal routes,” the spokesperson said.
India had earlier rejected the EU’s suggestion that the patter be taken to the MPIA, as it prefers to fight for the restoration of the Appellate Body system.