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India to go to WTO against Brazil dumping duty

BS Economy Bureau

India is planning to approach the dispute settlement body under the World Trade Organisation against the re-imposition of anti-dumping duty by Brazil on Indian jute products.

"We are awaiting the completion of the mandatory 60 days period given to both the parties to reach an amicable solution failing which India will go to the dispute settlement body," said a senior official.

India has objected to the re-imposition of anti-dumping duty imposed by Brazil since September, 1998 on Indian jute goods on the grounds that the investigations conducted are not in conformity with the provisions of the anti-dumping duty agreement and has maintained that there is no dumping of Indian jute products into Brazil.

Brazil imposed an anti-dumping duty of 38.9 per cent on all jute bags imported from India and directed that the duty would continue for five years.

Brazil had earlier in September 1992 imposed anti-dumping duties of 24.8 per cent and 56 per cent on jute yarn and other jute bags respectively imported from India.

In 1997, when the decision was due for suspension, Brazil, on the basis of a petition filed by its domestic industry, decided to revise the duty.

Sources said a high-level Indian delegation had visited Brazil recently to talk about the issue but not much ice could be broken on the issue.

They added that the Brazilian authorities had not determined 'dumping' in proper terms because the 'normal price' of jute bags had not been correctly calculated.

"In determining such a normal price, Brazilian authorities have placed reliance only on invoices which do not exist in India," sources said adding that due to the duty, the export of jute bags from India to Brazil had come down considerably.

The anti-dumping agreement under the WTO lays out that dumping should be calculated on the basis of a "fair comparison" between the 'normal value', which is the price of the imported product in the ordinary course of trade in the country of origin or export and the export price of the product in the country of import.

Sources pointed out that on account of the duty, jute bags from India were being exported to Brazil through European markets, particularly Belgium and Switzerland and hence, the normal value as determined by Brazil included considerable mark-ups.

The normal value had been determined by the Brazilian authorities in violation of the WTO provisions and since dumping itself was not established properly, the anti-dumping duty could not be imposed, they added.

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