Daily News - Back

United States Trade Representative

Prelims – Economy, Mains -GS2- International Relations

1. The Office of the United States Trade Representative (USTR) has amended lists of developing and least-developed countries that are eligible for preferential treatment with respect to countervailing duties (CVD) investigations.

2. This makes it easier to impose countervailing duties (CVDs) on goods from India and certain other countries.

Country Classification

1. To harmonize U.S. law with the World Trade Organization’s (WTO) Subsidies and Countervailing Measures (SCM) Agreement, the USTR in 1998 came up with lists of countries classified as per their level of development.

2. The list determined the countries that will be subjected to U.S. countervailing duties.

3. Countries not given special consideration have lower levels of protection against a CVD investigation.

4. A CVD investigation must be terminated if the offending subsidy is de minimis (too small to warrant concern) or if import volumes are negligible.

5. The de minimis thresholds and import volume allowance are more relaxed for developing and least-developed countries.

New List

1. India was previously on the developing country list making it eligible for more relaxed standards. But the new changes took India off of that list.

2. The new lists consist of 36 developing countries and 44 least developed countries.

3. Following criteria were used by the USTR to determine the eligibility of a country for the de minimis standard:

a.  Per capita Gross National Income or GNI,

b. Share of world trade,

c. 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.

4. India, Brazil, Indonesia, Malaysia, Thailand and Vietnam were taken off the list as 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).

5. Also as India like Argentina, Brazil, Indonesia and South Africa is a part of the G20 it was taken off the list.

6. As per the USTR, G20 membership indicates that a country is developed due to the global economic significance of the G20, and the collective economic weight of its membership.

Source: The Hindu