India challenges WTO ruling over US countervailing duties on steel

WTO says mining rights for iron ore and coal may not be a subsidy, but rejects India’s claim that NMDC is not a public body as per WTO rules

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indusry-TDB Growing steel imports by US threaten the steel sector that supports over half a million jobs in US

  India has challenged the recent World Trade Organisation (WTO) ruling on countervailing duties (CVD) by USA on certain steel imports from Indian companies which were imposed due to alleged government support to the steel industry in India. India had first appealed against imposition of CVD by USA on hot rolled carbon steel flat products from India in 2012. After two years, in its July 2014 ruling, the WTO accepted a small number of claims by India, but dismissed the remaining claims. According to the Indian Commerce Ministry, the WTO Panel accepted that combining non-subsidized imports with subsidized imports was inconsistent with WTO rules. The Panel also said that USA had no factual basis to hold that the grant of mining rights for iron ore and coal was a subsidy, and added that USA should not have ignored market prices available in India while determining the amount of subsidies. However, the Panel dismissed several claims by India including the ones relating to the methods of calculating the amount of subsidies and India's claim that National Mineral Development Corporation (NMDC) was not a “public body” as per WTO laws because it sells iron ore at market prices. Australia, Canada, China (which recently lost a case on CVD on US steel imports), European Union; Saudi Arabia, and Turkey are third parties in the case. NMDC is a Public Sector Unit and is India's largest iron ore producer. US representatives claim that NMDC supplies iron ore to steel companies at subsidised rates, but the Indian government refutes this claim. USA is the world’s third largest steel producer (ahead of India), but rising steel imports after the economic slowdown in 2008 is a matter of concern in USA. According to the Economic Policy Institute (EPI), imports of “unfairly traded steel” are threatening U.S. steel production, which supports over half a million US jobs. Steel imports by USA increased to around 6.4 million tonnes in January – February 2014, up 24.5% compared to the same period in 2013, says EPI.