INDIAN UPDATES
Union Budget of 2024-25
The Union Budget for 2024-25 was announced on 23rd July 2024, which proposed various changes to the direct and indirect tax regime of the country. With respect to trade remedial laws, the Government has amended the Countervailing Duty Rules, 1995 to insert the provision for New Shipper Review. By virtue of Notification No. 51/2024-Customs (N.T.), dated 23rd July 2024, Rule 23A was inserted whereby any exporter or producer which was not subject to individual duties in an anti-subsidy investigation, can be granted individual margins. Such provision is akin to the new shipper review provision under the Anti-Dumping Rules, 1995.
In addition to the above, the Government has proposed changes in the customs duties for multiple tariff lines. These include reduction in duty on Mobile Phones, Mobile Printed Circuit Board Assembly, and Mobile Charger to 15%; on Gold and Silver to 6%; on Copper Scrap to 2.5% and on Methylene Diphenyl Diisocyanate for manufacture of Spandex Yarn to 5%. Further, duties have been removed on imports of Ferro Nickel and Blister Copper, Ferrous Scrap, Nickel Cathode, certain critical minerals and capital goods used for manufacturing of Solar Cells and Panels. However, the Government has proposed to increase duty on imports of Ammonium Nitrate from 7.5% to 10% and PVC Flex Banner from 10% to 25%.
GLOBAL UPDATES
WTO Committee reviews Regional Trade Agreements (02 Jul)
The WTO Committee on Regional Trade Agreements reviewed four Regional Trade Agreements involving Cambodia, Iceland, India, Indonesia, the Republic of Korea, Liechtenstein, Norway, the United Arab Emirates, and the United Kingdom including the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates (UAE) which came into force on 1st May 2022.
US Department of Commerce proposes regulations to enhance administration of Anti-dumping Duty and Countervailing Duty laws (12 Jul)
The USDOC has proposed revisions to its trade remedy regulations in order to enhance the administration of the Anti-Dumping Duty and Countervailing Duty laws, streamline procedures, and provide clarity regarding the practice of the Department. The proposed rule includes revision of the existing procedures and methodologies and addition of certain regulatory provisions relating to collection of cash deposits, application of anti-dumping rates in non-market economy proceedings, calculation of all-others rate, selection of respondents and attribution of subsidies received by cross-owned entities to producers of a subject merchandise. The Department has sought comments from interested parties on the proposed Rule by 10th September 2024.
WTO concludes the ninth Trade Policy Review for China (17 Jul)
The WTO Secretariat issued its Report in the ninth Trade Policy Review of China. The last review for China was conducted in 2020. The Report highlights China's major role in the growth of the global economy. It was observed that China recovered successfully from the pandemic and its export-import continued to increase. However, China's trade in intermediate goods increased at a faster rate than trade in merchandise, indicating China's pivotal role in global supply chains. The report observed that while China has made certain market-oriented reforms and has attempted economic liberalization, it continued to maintain its managed floating exchange rate regime.
Since the last review, China has continued to support the WTO and the smooth functioning of the multilateral trading system. By the end of 2023, China signed 22 Regional Trade Agreements involving 29 trading partners, while also offering unilateral tariff preferences to least developed countries. With respect to trade remedial measures, China initiated only 3 anti-dumping investigations. However, 120 anti-dumping measures continued to be in place. China did not initiate any new safeguard measures since 2021.
The report noted that China has a total of 21 Pilot Free Trade Zones (PFTZs) wherein entities are eligible for preferential treatment in the form of reduced corporate income tax rate and streamlined customs handling of merchandise. It was also noted that China has continued to provide financial support and incentives to different sectors and industries including manufacturing sectors, which have been estimated to range from CNY 1.89 trillion to CNY 6.51 trillion. The Secretariat also noted that China's state trading enterprises (STEs) continue to have exclusive rights to import or export certain products including Refined Coal, Chemical Fertilizers, Tungsten, and Tungstate products. It was noted that state ownership remained very important in the economy, with state-owned enterprises still having substantial market shares in many commercially oriented sectors. No major privatization took place during the review period.
Iraq resumes its accession to WTO after 16-year hiatus (18 Jul)
Iraq steps towards becoming a full-fledged member of the WTO, after the third meeting of the Working Party on the Accession of Iraq after a 16-year hiatus. The accession intensifies Iraq's efforts in aligning its trade policies and regulatory framework with international rules and standards as well as strengthening institutional capacities to meet WTO requirements.
WTO issues the new edition of World Tariff Profiles (25 Jul)
The WTO issued the 2024 edition of World Tariff Profiles with comprehensive information on tariffs and non-tariff measures. The tariff measures are listed for both agricultural and non-agricultural sectors and includes one-pager profiles with detailed data for each economy and the tariffs imposed on the economy's exports.
The European Commission issues initial clarification regarding application of the Foreign Subsidies Regulation (26 Jul)
The European Commission has issued initial clarifications regarding the application of the Regulations on Distortions in Internal Market due to Foreign Subsidies. Among other things, the Commission has clarified that the Regulations do not prohibit all foreign subsidies, but once the existence of a foreign subsidy is established, the Commission would assess on a case-by-case basis whether it distorts the internal market. Further, the Commission has stated that a relationship has to be established between the foreign subsidy and the activities of a company in the internal market. Finally, it is clarified that the indicators provided under the Regulations which establish whether a foreign subsidy distorts the internal market, are non-exhaustive.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.