According to Agence France Presse on September 8th, the United States stated on the same day that it had reached an agreement with India to resolve their last unresolved dispute at the World Trade Organization. This dispute involves poultry, especially India's restrictions on importing certain agricultural products from the United States due to concerns about avian influenza.
The Office of the United States Trade Representative said, "Today's agreement has resolved unresolved long-standing disputes, opened a new chapter in bilateral cooperation, and will deepen US India trade relations
As part of the agreement, India also agreed to reduce tariffs on certain American products, such as frozen turkey and duck, as well as fresh blueberries and cranberries.
According to the report, the Office of the United States Trade Representative stated in a statement that reducing tariffs in India will increase economic opportunities for American producers in a "critical market".
In June of this year, the United States and India agreed to end six disputes at the World Trade Organization, and India also agreed to lower tariffs on some American products such as chickpeas and lentils, which will take effect this week.
The last pending WTO dispute
The DS430 case involving agricultural products between the United States and India is an old case that has been "tugged at" by both sides for over a decade. In 2007, India banned the import of certain agricultural products such as poultry and eggs from the United States on the grounds of preventing avian influenza. In 2012, the United States submitted a consultation to the WTO dispute resolution body on this matter.
The legal documents involved in the measures include the Indian Poultry and Livestock Act of 1898 and an import ban issued by the Indian government in July 2011. The products prohibited from import include: poultry and wild birds, newly hatched poultry such as chickens and ducks, unprocessed poultry meat, eggs, unprocessed feathers, live pigs, pharmaceutical and biological products processed from poultry, animal feed or industrial and agricultural raw materials processed from poultry, etc.
The United States believes that India's aforementioned measures are inconsistent with its obligations under the Agreement on the Implementation of Sanitary and Phytosanitary Measures and the 1994 General Agreement on Tariffs and Trade, and harm the interests enjoyed by the United States under the relevant agreements. Therefore, it requests consultations with India.
In 2014, the WTO expert group's preliminary ruling showed that India's ban on US poultry imports was inconsistent with international practice. Afterwards, India chose to appeal, and its appellate body partially overturned the expert panel's decision while maintaining most of the preliminary determination. After India failed to enforce the ruling within the specified time limit, the US demanded compensation; Since then, the two countries have been trying to resolve this dispute.
This year, there have been signs of reconciliation in trade disputes between the United States and India. Until June, the United States and India agreed to terminate multiple unresolved disputes between the two sides at the WTO. For example, on July 13th, regarding the DS547 and DS585 cases involving steel and aluminum products, the United States and India notified the WTO that they had reached a mutually agreed solution to the issues raised in these two disputes.
US agricultural products still face trade barriers
After the settlement of this agricultural dispute, the US expects American agricultural products such as turkeys to open up sales in India.
US Senator Amy Klobuchar issued a statement welcoming this. She stated that the above agreement will reduce the tariffs on frozen American turkey products exported to India from 30% to 5%, and "for a long time, high tariffs have prevented American turkey breeders from exporting products to India.
US Agriculture Secretary Vilsack also welcomed the news, stating that the move would create new market opportunities for US producers and exporters. However, he also stated that "although significant progress has been made, US agricultural products still face significant tariff and non-tariff barriers when entering the Indian market".
Meanwhile, according to the statistics released by the US Department of Agriculture at the end of August, India is a small market for US food and agricultural exports.
Taking the overall agricultural export data of the United States for the fiscal year from October 2022 to June 2023 as an example, the export of agricultural products from the United States to India in that fiscal year was about 2.4 billion US dollars, accounting for 1.2% of the total agricultural export volume of the United States. By comparison, the United States imported approximately $3.2 billion in agricultural products from India during the fiscal year.
The GSP treatment has not been restored yet
In addition, it should be noted that during the Trump administration, the United States terminated the Generalized System of Preferences (GSP) treatment for developing countries towards India, meaning that India no longer enjoyed preferential conditions for trade with the United States.
The US's GSP to India covers India's exports of $5.6 billion, which has had an impact on key industries such as textiles, leather, engineering products, gemstones, and jewelry. Since the Biden administration took office, although trade relations between the US and India have been restored, the GSP treatment has not been restored.
According to data released by India, India's foreign trade has also shown an overall downward trend this year. According to data from the Indian Ministry of Commerce and Industry, in the first half of 2023, the total import and export value of Indian goods reached 532.792 billion US dollars, a year-on-year decrease of 10.2%. Among them, the export of goods reached 210.757 billion US dollars, a year-on-year decrease of 11.4%; The import of goods reached 322.035 billion US dollars, a year-on-year decrease of 9.3%; The trade deficit in goods reached $111.278 billion, a decrease of 5.0% year-on-year.
The latest report released by GTRI, an Indian think tank, shows that in the first half of this year, India exported goods to 240 countries and regions, with exports to 134 destinations decreasing, including countries such as the United States, the United Arab Emirates, China, Bangladesh, and Germany.
Roger, a senior figure who has been engaged in the US freight forwarding business for a long time, said that US customs data shows that no exporting country is immune to the decline in US total demand, but the impact varies. From January to August, US container imports from around the world decreased by 18%, with containers from India falling by around 13%