Japan says MIP on steel products violates WTO rules

At the third meeting to review the Comprehensive Economic Partnership Agreement, Japan on Thursday protested against the imposition of a minimum import price(MIP) and safeguard duty on steel products.

The Japanese delegation – headed by Deputy Minister of Foreign Affairs Keiichi Katakami – said the imposition of MIP restricted entry of certain products into India and this was in violation of GATT Article 11, Paragraph 1. The MIP was notified on February 5 for six months ended next week. The government is yet to take a call on whether to discontinue or re-impose it.

A person close to the development said Japan wanted an early resolution on the matter. Besides, it also warned India that the safeguard duty imposed on hot-rolled flat and coils was in violation of a WTO agreement. Similar concerns were raised by South Korea even as the Indian industry had wanted steel products to be excluded from the ambit of free trade agreement (FTA) with Japan and South Korea. These countries were flooding the Indian market, taking advantage of concessional duty rates.

The Japanese side also flagged taxation related issues, including imposition of minimum alternate tax in special economic zones.

During Thursday’s meeting, protection of agricultural geographical indicators also came up for discussion.

The India-Japan CEPA came into force on August 1, 2011. Japan and India are the second and the third largest economies in Asia. During the meeting, India expressed apprehensions that after four years of CEPA, the trade engagement was below potential. Japan’s share in India’s imports was around 2.3 per cent and India’s share in Japan’s imports has remained insignificant at 0.8 per cent.

India, on its part, raised the issue of export of Surimi fish to Japan, which was not being treated as that of Indian origin. The fish was accorded a preferential tariff of 1.9 per cent as an imported preservative was being used to preserve the protein content. India claimed the value of preservative was less than half a per cent of the overall cost of the product.

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