India left the door open on Tuesday to seek a negotiated solution with Brazil, Australia and Guatemala over its subsidies that have an impact on the international sugar market and were condemned by a panel of the World Trade Organization.
In December, the WTO published the panel’s decision, which found that New Delhi massively increased subsidy to the sugar sector and reintroduced a floor price that led to production exceeding domestic demand. And it defined that the Indian government has to modify these measures to comply with international rules.
The dispute was part of Tuesday’s agenda of the Dispute Settlement Body, led by the delegations of Brazil, Australia and Guatemala, after India appealed against its defeat — a formality that, in practice, blocks the victory of the three countries.
Brazil, Australia and Guatemala noted that the panel concurred with virtually all of the grievances presented, and regretted that India had “appeal into the void” and left the case with no prospect of resolution in the short term. It is because the Appellate Body, which normally has seven judges, is now empty, because of the block made by the U.S. to the appointment of new arbitrators.
By appealing into the void, India is, in effect, free to maintain the policies condemned by the WTO. India does not participate in an entity’s 25-member parallel mechanism to resolve its disputes.
In its intervention Tuesday at the WTO, Brazil once again complained that the condemned Indian policies cause damage to Brazilian producers, regretted the Indian reaction of appealing into the void Appellate Body and reiterated the willingness that a solution be quickly adopted for India to respect the decisions of the panel.
The Indian delegation answered, criticizing several legal aspects of the decision taken by the panelists. But it left the “door open,” in the expression of one negotiator, to seek a negotiated solution. The point is whether it will move from rhetoric to effective negotiation.
The government of India continues to be under strong pressure from its producers not to change minimum price policies that end up encouraging an increase in production, part of which is diverted to the international market, bringing down prices. Indians have increased their share of the global sugar trade thanks to subsidies.
The Brazilian government has a Provisional Measure ready, which remains in the Chief of Staff Office, by which the federal government may retaliate proportionally and unilaterally, in cases of victories in WTO disputes, when the losing country makes the so-called “appeal into the void.” India is an obvious target.
Source: Valor international