Bangladesh seeks WTO action against India next week

The government will appeal to the World Trade Organization (WTO) next week to get redress against Indian anti-dumping duties on imports of Bangladeshi jute products. 

The Indian government imposed the anti-dumping duties, ranging from $97.19 to $351.71 per tonne, on all jute companies in Bangladesh for five years from January 2017. 

Officials of the Ministry of Commerce and the Bangladesh Trade and Tariff Commission on Monday held a meeting to finalise a draft to be sent to the WTO.  

Sources at the meeting said the government has decided to seek legal advice from the Advisory Centre on WTO Law (ACWL), an international legal service organisation.

Commerce ministry officials firmly believe that there has been some inconsistency on the part of India in imposing the anti-dumping duties according to the terms of the WTO law.  

"Hopefully, we will send a copy of the application to the ACWL by next week," said a high official of the commerce ministry seeking anonymity. 

Established by the WTO in 2001, the ACWL provides legal advice on laws and dispute settlements for its members.

The ACWL will give its feedback within 30 days, according to the commerce ministry officials. 

Bangladesh will then file an appeal to begin the consultation process at the WTO, they added. 

Tariff Commission officials said Bangladesh has a success case against India at the Dispute Settlement Body (DSB) of the WTO.

That case is also related to anti-dumping duty against Bangladeshi batteries exported by Rahimafrooz.

After filling an appeal at DSB for consultation, India had agreed to remove the duty.

Meanwhile, Bangladesh's jute product exporters welcomed the government effort to resolve the crisis. 

"It is the only way for us to survive. Otherwise the Indian government will extend the timeline after the expiry of the current five-year period," said Mahmudul Huq, deputy managing director of Janata Jute Mills Ltd.

"Indian has violated some legislative procedures. If we appeal to the World Trade Organisation, the Indian government may remove the barrier," said Shahidul Karim, secretary general of the Bangladesh Jute Spinners Association.

"Jute spinners have lost almost all of their business in the Indian market. They used to export about 1.20 lakh tonnes of yarn annually before the anti-dumping duty was imposed, but now exports have dropped to below 65,000 tonnes," he added.

"We are very confident about getting a favourable judgment from the WTO," he added.

In 2017, 30 Bangladeshi companies were exporting jute products to India and 12 of them appealed to the Indian government to review the duty imposition. 

During the appeals, four companies managed to bring down the anti-dumping duties to zero or $20.68 per tonne, while eight others lost their appeals. 

In the latest round, on November 11, 2019, India's Central Board of Indirect Taxes and Customs rejected the review appeals of three Bangladeshi companies.

An anti-dumping duty is a tariff imposed by a country on imports that it thinks are priced below the fair market value of similar goods. A government can impose anti-dumping duty when it believes that goods are being dumped in the domestic market to protect local businesses.

Bangladeshi exporters say that the country's jute mills and jute-spinning mills have been badly affected by India's action as the neighbouring country is a major export destination for their products.

The situation has not improved over the years despite repeated appeals by Bangladeshi exporters to India to remove the protectionist tariffs.

From 2011 to 2015, the office of the Directorate General of Anti-Dumping and Allied Duties of India asked for information from 158 Bangladeshi exporters to verify if they were dumping jute products in the country. But only 26 companies from Bangladesh provided their information. At the same time, the Indian directorate collected information from 99 Indian companies and users' associations that imported Bangladeshi jute products.

The Bangladeshi companies were asked whether the products being exported to India were also exported to other countries, what the local market prices for the product were, and the costs of production.

"As a new exporter, we submitted a review application to the Indian authorities and provided documents relating to six export consignments. Of them, five consignments were in 2016 and one was in 2017.

Unfortunately, they took the last one only in consideration and refused our appeal," said Mahmudul Huq of Janata Jute Mills Ltd.

"They didn't do justice to us. We were deprived even before the judgment process was initiated," he added.

"We spent around $25,000 to appoint an Indian lawyer but that didn't change anything," Mahmudul said.

Meanwhile, the companies that won in the appeal are unlikely to get any benefit from the removal of duties. 

According to Bangladesh's Export Promotion Bureau (EPB), exports of jute goods during the last fiscal year amounted to $816.20 million.

In the first seven months of the current fiscal year, exports of jute goods reached a figure of $602.49million.