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India takes US steel tariff issue to WTO’s safeguards committee

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, committee of safeguards, dispute settlement mechanism

Mains level: India-US trade war and its implications


News

Seeking consultation on higher tariffs

  1. India has raised the issue of US imposing higher tariffs on certain steel items at the committee of safeguards of the World Trade Organisation (WTO) seeking consultation
  2. The move came after failing to get an exemption on tariff hikes by the Donald Trump administration

Background

  1. On 8 March, the United States issued a presidential proclamation indicating that steel articles are being imported into US in such quantities as to threaten to impair its national security
  2. To address this situation, the US imposed a 25% tariff on certain steel articles with effect from 23 March

Effect of taking the issue to safeguards committee

  1. India can only “name and shame” the US by raising the matter in the safeguards committee as the panel does not have any adjudicating power
  2. The US may also claim that its move is not a safeguard measure as it has imposed the higher tariffs on steel and aluminum invoking national security provision
  3. For seeking compensation of business loss, India needs to drag the US to the dispute settlement mechanism

Back2Basics

WTO dispute settlement mechanism

  1. Dispute settlement is regarded by the World Trade Organization (WTO) as the central pillar of the multilateral trading system, and as the organization’s “unique contribution to the stability of the global economy
  2. A dispute arises when one member country adopts a trade policy measure or takes some action that one or more fellow members considers to a breach of WTO agreements or to be a failure to live up to obligations
  3. The operation of the WTO dispute settlement process involves the parties and third parties to a case and may also involve the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts, and several specialized institutions
  4. The General Council discharges its responsibilities under the DSU through the Dispute Settlement Body (DSB)
  5. Like the General Council, the DSB is composed of representatives of all WTO Members
  6. By joining the WTO, member countries have agreed that if they believe fellow members are in violation of trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally
  7. This entails abiding by agreed procedures (Dispute Settlement Understanding) and respecting judgments, primarily of the Dispute Settlement Body (DSB), the WTO organ responsible for the adjudication of disputes

U.S. pulls out of UN’s pact on migration

Note4Students

Mains Paper2 | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

The following things are important from UPSC perspective:

Mains level: The USA has withdrawn from United Nations Global Compact on Migration. Migration has become an important topic for Mains.


News

Context

  1. The USA has withdrawn itself from a United Nations pact that is, Global Compact on Migration to improve the handling of migrant and refugee situations, deeming it “inconsistent” with its policies.
  2. But USA would continue its “generosity” in supporting migrants and refugees around the world.

New York Declaration for Refugees and Migrants

  1. In September 2016, the UN General Assembly adopted a non-binding political declaration, the New York Declaration for Refugees and Migrants, pledging to uphold the rights of refugees, help them resettle and ensure they have access to education.

U.S. visa fee increase discriminatory: FM

  1. Context: Finance Minister Jailtey’s meeting with US Trade Representative
  2. News: India has expressed concern over the hike in visa fee by the US, which is discriminatory and in effect is largely targeted at Indian information technology companies
  3. Background: Last year, the US Congress imposed a special fee of up to $4,500 on H-1B and L-1 visas to fund the healthcare Act and biometric tracking system
  4. Future: He also underlined the need for early conclusion of Totalisation Agreement which would benefit Indians working in America

H1B visa: Caps met, lottery to decide 85,000 new skilled immigrants

  1. News: The applications for H1B visa category exceeded the cap of 85,000 fixed for the fiscal year 2017
  2. Of the total cap of 85,000 visas, 20,000 are under a special category called advanced degree exemption
  3. Major Players: Indian IT companies such as TCS, Wipro, Infosys and Cognizant along with Microsoft and Google that recruit resources from India
  4. Fact: In 2014, 86% of the new H1B visas issued were to Indians

India invokes dispute with US at WTO over visa fees

  1. Context: India has set off a major trade dispute with the US at WTO
  2. Why? Escalation of visa fees for L-1 and H-1B of short-term service providers & limits on their numbers
  3. Argument: Treatment accorded to juridical persons of India with a commercial presence in the US under Mode 3 of GATS are against US’ scheduled specific commitments
  4. Mode 3 of GATS: WTO members are allowed to have a commercial presence in member countries, depending on the specific binding commitments made in their schedules

India takes on U.S. at WTO over visa rules

  1. Context: Increase in fees for temporary work visas, affecting Indian workers
  2. News: India has filed a complaint to the WTO against the US over its measures raising fees on some applicants for temporary work visas, mostly involving the tech sector
  3. Reason: Indians receive unfair treatment compared with Americans in the US in providing similar services in sectors like computer services
  4. Criticism: US measures are not consistent with its commitments to accept services from other countries

Learn more about World Trade Organisation and H1B Visa.

IT sector worried; India to take up visa fee with U.S.

Industry could take a $400-mn hit a year because of the hike.

  1. India will schedule discussions with the U.S. to raise its concerns over the Obama administration’s recent decision to hike visa fees.
  2. India will consider retaliatory measures and even explore the possibility of dragging the U.S. to the WTO’s dispute settlement body.
  3. India is the largest user of H1B visas (67.4 per cent) and is also among the largest users of L1 visas (28.2 per cent).
  4. India’s export of computer services and ITES/BPO services was around $82 billion, of which exports to the U.S. and Canada accounted for nearly 60 per cent.

Special fee for H1B and L1 visas

  1. In 2010, the US had started a $2,000 fee for H1 B visas but the number of people taking it has only been on the rise, the 2010 Bill lapsed on October 1.
  2. The new Bill makes it valid until September 2025, for 10 years, though terms the fee temporary.
  3. According to NASSCOM, the $2,000 fee is used to raise $70-80 million annually.
  4. A part of money raised will fund health care and implementation of a biometric entry and exit data system.

Modi talks to Obama over H1B, L1 visa concerns

PM Modi shared with U.S. President, the concerns of Indian IT industry on the proposed legislation in the U.S. Congress relating to popular H1B and L1 visas.

  1. Indian IT companies in the U.S. may end up paying a special $2,000 fee again on the popular H1B and L1 visas to fund a 9/11 health care act.
  2. According to the NASSCOM, Indian companies had paid between USD 70 to 80 million per annum between 2010 and 2015.
  3. The extra fee applies to companies with at least 50 per cent of their employees on H-1B visa or L-1 visas, and is in addition to the other fees paid by employers.
  4. Because of its 50 per cent threshold, it mostly hits the large Indian IT services firms, the leading users of the H-1B visa.

Milestone for H-1B, a passport to the American dream

A large number of Indian IT professionals have been issued the visa over the years.

  1. A digital arts exhibition on the H-1B visa has opened at the world’s largest museum in the U.S. to mark the 25th anniversary of the popular work permit falling on November 29.
  2. South Asian and Asian American artists explore America’s immigration story through this visa.
  3. Our H-1B visa exhibition explores a historic part of the American story from the perspective of South Asian Indians.
  4. Several generations of young scientists and engineers from all over Asia had come to be part of a “New America” and shape the United States’ culture of innovation and entrepreneurship.


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