India moves WTO appellate body against panel ruling on steel

India has filed a notice of appeal on a World Trade Organisation (WTO) panel report in a case related to imposition of penal duties by the United States on certain hot-rolled steel flat products from India.

While the dispute panel ruled in part in India's favour observing that the US erred in determination of countervailing duties (CVD) and that the high duties breached WTO rules, it rejected New Delhi's objections on specific technical issues related to how penal duties are to be calculated.

India has sought re-consideration of the dispute settlement panel's decision to reject its arguments against the US method of calculating countervailing duties.

Indian steel companies such as Tata and Jindal have been hit hard by CVD ranging from 18 per cent to 500 per cent, imposed by the US on carbon steel from India for more than a decade. This has reduced Indian exports of the product to almost zero.

US imposed the CVD, a measure to neutralise subsidies on imports, on Indian steel products on the ground that iron ore sourced by Indian steelmakers from public sector NMDC is supplied at subsidised rate because it is government-owned.

In a case filed before the WTO in 2012, India rejected the claim and argued that NMDC always sells at the prevailing market prices, which are determined by their exports to Japan and South Korea.

The WTO also ruled in India's favour in the way it decided to define a 'public body'. 

However, according to the US trade representative, the WTO rejected a number of Indian challenges which included challenges to over 300 instances of the use of 'facts available' and challenges to the US' benchmark calculations and inclusion of new subsidy programmes in countervailing duty review proceedings.

The USTR had earlier said that it too would consider the option of challenging the panel report where it was observed that the US was in breach of WTO rules.

Parties to a dispute can appeal a panel's ruling. Appeals have to be based on points of law, such as legal interpretation - they cannot re-open factual findings made by the panel. Each appeal is heard by three members of a permanent seven-member appellate body comprising persons of recognised authority and unaffiliated with any government.

The appellate body membership broadly represents the geographic range of WTO membership, with each member appointed for a fixed term. Generally, the appellate body has up to 3 months to conclude its report.