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EU to contest WTO ruling on Indian textiles

The European Union will contest a ruling given by the World Trade Organisation in favour of India against the imposition of definitive anti-dumping duties on exports of cotton bed linen from India worth Rs 4 billion.

The 15-Nation trade bloc announced its decision to appeal against the ruling of a three-member WTO arbitration panel at a meeting of the dispute settlement body of the Geneva-based organisation.

"The report of the Panel was on the agenda of the DSB meeting for adoption, but the EU is appealing against it," a WTO official said. An EU official in Geneva also confirmed that the ruling is being challenged.

A larger seven-member appellate body will now hear the EU appeal and the case would take another six months to be disposed of by the WTO.

The WTO had on November 1 backed New Delhi by ruling that EU's imposition of anti-dumping duties on imports of cotton bed linen from India violated free trade rules.

The ruling was a major trade victory for Indian textile exporters, most of whom are in the private sector.

The Panel recommended that the EU be asked to bring its levy of anti-dumping duties into "conformity with its obligations under the anti-dumping (AD) agreement."

The European Commission, the executive body of the EU, contended that the European textile industry had suffered declining profitability and price depression and had therefore slapped anti-dumping duties.

India had challenged the imposition of these punitive duties as being incompatible with GATT rules.

The duties had been imposed in several slabs ranging up to 24.7 per cent since November 28, 1997.

The WTO had also ticked off the EU for "failing to

explore possibilities of constructive remedies" before levying the anti-dumping duties.

"The EU had acted inconsistently with the provisions of the AD agreement and has nullified or impaired benefits accruing to India under that agreement," the Panel noted.

It said that there was "infringement" of EU's obligations assumed under the AD agreement in the present case.

India had also complained that the EU "failed" even to consider India's special situation as a developing country before imposing provisional anti-dumping duties on June 12, 1997.

India has voiced concern on several occasions at various levels over the EU's actions in frequently resorting to anti-dumping and anti-subsidy actions on a range of Indian imports saying they adversely affected Indo-EU trade.

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