DHAKA, April 8: The government of Bangladesh has decided to go to the WTO's Dispute Settlement Body for a ruling on a long-standing trade dispute with India as regards the latter's "anti-dumping" measures imposed on the import of the former's lead-acid batteries more than three years ago.
This is going to be the first case under the WTO's dispute settlement mechanism initiated by a least developed country against a developing country and can potentially set precedent for other LDCs.
Bangladesh made the decision for seeking WTO ruling on the dispute in the first week of April, after the country's consultations with India on anti-dumping measures against the Bangladeshi product failed in Geneva "within two months" from seeking the consultation on January 28.
Bangladesh has already directed its mission to the World Trade Organization in Geneva to request for the panel regarding definitive anti-dumping measures that India had imposed on import of lead acid batteries from Bangladesh in March 2001, a highly placed source in Bangladesh's Ministry of Commerce said.
Earlier, the Bangladesh mission to the WTO officially requested for consultations - the first step of dispute resolution - with the Indian mission to the WTO in a communique on January 28 this year.
Subsequently, India agreed to sit with the Bangladeshi negotiators led by Mohammad Ali Taslim, chairman of the Tariff Commission. But the consultations failed to produce anything substantial. "Hardly anything concrete came out of the consultations, the Indian officials were rather casual during the sessions," an official of Bangladesh's Tariff Commission said in Dhaka on Wednesday.
Rather, the Indian representatives, in their bid to turn it into a domestic issue, suggested that any of the Indian importers concerned should file a review petition to the relevant Indian authorities to settle the anti-dumping issue."
Bangladesh's commerce ministry officials concerned believe that "the review petition, suggested by the Indian side at the consultation, is nothing but a face-saving ploy for the Indian authorities to get Bangladesh to withdraw the complaints filed with the WTO".
According to the rules stipulated by the Dispute Settlement Understanding - an agreement of the WTO - the complainant may request the Dispute Settlement Body to form a panel within two months from its initial request for consultations. Under the WTO agreement, the panel has to be formed within 45 days of the request, consisting of three to five members of different countries.
It will then proceed to hear the case from the contesting parties as well as any other interested parties and submit its report, giving a verdict on the case and suggestions to bring the contested measure within the purview of WTO rules. This report must be submitted within six months of the composition of the panel and will subsequently be adopted by the board as a ruling, provided that there is no appeal at that stage.
Meanwhile, the Bangladeshi company, Rahimafrooz, the principal party allegedly affected by the Indian safeguard measure, say that they had exported about 54,000 units of lead-acid battery worth $789,745 between January 1 and September 30 of 2000, while the domestic demand for comparable batteries in India is about 10 million units.
Anti-dumping regulations stipulate there cannot be sufficient injury to the domestic industry if the volume of imports of a certain product is less than three per cent of the domestic market.
In fact, the relevant authorities under Indian commerce ministry reportedly found on March 21, 2001 that the volume of Bangladeshi exports in terms of batteries were negligible.
The same view was reiterated by the Department of Revenue, Ministry of Finance of India in a notification on April 9, 2001 and by the Indian Customs in a similar notification dated January 2, 2002.
Besides, the legal text of the WTO stipulates that dumping occurs when a product is sold below its cost price. But Bangladesh asserts that in the case of Rahimafrooz's batteries, the price calculation made by the Indian authorities had been deemed inaccurate.
