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USTR takes India off developing country list
Why is it in news?
- The U.S. government has changed an administrative rule making it easier for it to impose countervailing duties (CVDs) on goods from India and certain other countries.
More in news
- Classification of countries
(1) The United State Trade Representative (USTR) had, in 1998, come up with lists of countries classified as per their level of development to harmonise U.S. law with the World Trade Organization’s (WTO) Subsidies and Countervailing Measures (SCM) Agreement.
(2) These lists were used to determine whether they were potentially subject to U.S. countervailing duties.
- Case of Countervailing Duties
(1) Countervailing duties, also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization rules to neutralize the negative effects of subsidies
(2) Countries not given special consideration have lower levels of protection against a CVD investigation.
(3) A CVD investigation must be terminated if the offending subsidy is de minimis (too small to warrant concern) or if import volumes are negligible.
(4) The de minimis thresholds and import volume allowance are more relaxed for developing and least-developed countries.
- Criteria used to determine eligibility for 2% de minimis
(1) Per capita Gross National Income or GNI
(2) share of world trade
(3) other factors such as Organisation for Economic Co-operation and Development (OECD) membership or application for membership, EU membership, and Group of Twenty (G20) membership.
- Reason for putting India off the list
(1) India, along with Brazil, Indonesia, Malaysia, Thailand and Vietnam were taken off the list since they each have at least a 0.5% share of the global trade, despite having less than $12, 375 GNI (the World Bank threshold separating high income countries from others).
(2) India was taken off the list also because — like Argentina, Brazil, Indonesia and South Africa — it is part of the G20.
Source
The Hindu