EU may be offered tariff sops on some ICT products

EU may be offered tariff sops on some ICT products

Subject: Economy

Section: External Sector

Context: The World Trade Organization’s Dispute Settlement Body (DSB), in a special session on Wednesday, will consider a joint request made by India and the EU for more time to sort out their dispute related to import tariffs imposed by India on select ICT products, including mobile phones.

Both members, in a submission to the DSB, requested that it should put off adoption of the WTO panel’s report, which ruled against India’s tariffs, till September 19, 2023.

The DSB already allowed more time to Chinese Taipei and India to sort out the matter in the dispute on the same issue. So, it is expected that it will agree to do so in the case of EU as well.

But this is mostly unprecedented as the DSB usually sticks to its 60-day time period for adoption of dispute panel reports. It is within this time frame that appeals against the judgment can be filed at the Appellate Body by the members involved failing which the report gets adopted

Background:

• Japan and Chinese Taipei had set up a dispute settlement panel at the World Trade Organization (WTO) against New Delhi’s customs duties on imports of certain information and communications technology (ICT) products.
• On April 17, the dispute settlement panel of the WTO, in three separate disputes filed by the EU, Japan and Chinese Taipei against India’s import duties on certain ICT products, had ruled that the tariffs violated its commitment under multilateral trade rules and needed to be corrected.

What now?

India has a 60-day time period to appeal against the judgment, failing which the report was to be adopted. The 60-day period is to end this week.

India has already appealed to the WTO Appellate Body against the judgement in its dispute with Japan. In case of the dispute with Chinese Taipei, both sides have bought more time. If the DSB agrees to do the same with the EU, then the adoption of the panel reports in all three cases would not happen this week

What is Information Technology Agreement (ITA)?

ITA

• The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference in December 1996.
• Since then, the number of participants has grown to 82, representing about 97 per cent of world trade in IT products.
• The ITA covers a large number of high technology products, including computers, telecommunication equipment, semiconductors, semiconductor manufacturing and testing equipment, software, scientific instruments, as well as most of the parts and accessories of these products.
• The participants are committed to completely eliminating tariffs on IT products covered by the Agreement.

ITA2

• In June 2012, the ITA-2 negotiation was launched in order to both expand the coverage of ICT products and address classification issues.
• At the Nairobi Ministerial Conference in December 2015, over 50 members concluded the expansion of the Agreement, which now covers an additional 201 products valued at over $1.3 trillion per year.