USTR Begins Formal Dispute With India Over Solar Trade Barriers
U.S. Trade Representation (USTR) Michael Froman announced on Feb. 10 the U.S. is asking for World Trade Organization consultations (WTO) with India over alleged discrimination against U.S.-manufactured solar cells, modules and related equipment. Through the WTO dispute settlement consultations, the U.S. will try to dismantle Indian forced localization barriers that violate WTO trade agreements, said Froman, speaking at USTR headquarters in Washington D.C.
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“We also take this action in support of the rapid global deployment of renewable energy,” said Froman, appearing with general counsel Timothy Reif and other USTR attorneys. “These types of ‘localization’ measures not only are an unfair barrier to U.S. exports, but also raise the cost of solar energy, hindering deployment of solar energy around the world, including in India.” The localization barriers are part of the Indian Jawaharlal Nehru National Solar Mission, a domestic program designed to promote solar power generation development, said USTR in a release. The U.S. also initiated (here) consultations with India over solar localization requirements in February 2013, but there have been no additional actions at the WTO since that point (here).
The U.S. may request the establishment of a dispute settlement panel if the matter is not resolved in 60 days, according to WTO protocol. India in recent years has repeatedly declined to address U.S. complaints over the solar localization barriers, said Solar Energy Industries Association President Rhone Resch in a Feb. 10 statement (here), expressing support for the USTR request for consultations. "Localization barriers are a growing threat to U.S. solar exports and clearly violate WTO rules," said Resch. "Over the past three years, the U.S. government has provided India every opportunity to remove restrictive and unfair marketplace requirements. In the absence of any meaningful effort by India to find common ground, it's now time for the WTO to finally resolve these long-festering issues." A USTR spokesman did not respond for comment on specific market access terms the U.S. would accept.
The solar localization barriers are emblematic of broader Indian discrimination against foreign products, said National Association of Manufacturers Vice President of International Economic Affairs Linda Dempsey. “India’s forced localization policies unfairly discriminate against manufacturers of a wide array of products, including solar cells and modules,” said Dempsey on Feb. 10 (here). “We look forward to similar concrete action to address Indian government policies that are discriminating against other products and sectors.”
The solar dispute may, however, be another example of U.S. corporate resistance to strengthening Indian manufacturing across a number of sectors, argued a column in the Times of India that preceded the USTR announcement. “At the heart of the latest ongoing dispute is the perception in US quarters, particularly among its business and industry in sectors like pharma, that India's poor intellectual property rights protection is undermining them (and according to Indian critics, undercutting their avaricious profit taking). The two countries are also sparring over everything from export of shrimps that pit the fishermen of Kerala versus fisherman of Louisiana, to the import of steel pipes,” said the column (here). “Organizations such as Doctors Without Borders have supported India in its effort to produce cheap medicines for the world's poor with modest improvements in IPR, but Big Pharma isn't impressed by the rapid strides made by India's generic drug industry, which they feel threatens western advances.” -- Brian Dabbs