US asked to drop WTO case against India

As per reports, USA has been requested by many environmentalists to drop plans to take India to WTO in a dispute that is related to opening of India’s huge solar market.

Environmentalists feel that the case will dampen the fight against climate change.

WTO will hear the case on Friday. US trade representative Michael Froman, announcing the move in February, said President Barack Obama’s administration would “stand up for US workers and businesses” to break barriers to the Indian market.

India has a local requirement clause that is perceived as anti trade by developed market economies. that only locally made products be used in its solar industry had impeded cooperation. The two parties to the dispute are allotted 30 days to settle the dispute before a panel is appointed.

As per the US claim, the country says that India has violated the following provision of WTO by making local sourcing mandatory,

• Article III.4 of General Agreement on Trade and Tariffs (GATT) 1994,
• Article 2.1 of the Agreement on Trade-Related Investment Measures (TRIMS) and
• Articles 3.1(b) and 3.2 of the Subsidies and Countervailing Measures (SCM) Agreement.

However, environmentalists feel that the move will only hurt climate change efforts and is detrimental towards the measures being taken to fight climate change. “To avert climate disaster, countries must significantly scale up renewable energy development and deployment, just as India is currently doing,” the letter said.

“The US should not compromise the long-term growth of the solar market just so that it can achieve limited near-term gain,” said the letter, signed by 15 groups including the Sierra Club, 350.org and the US branches of Greenpeace and Friends of the Earth.

India has defended the move and points out that many US states also have similar requirements.