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July, 2014

  • image (1)In the first meeting between the new leaders of the world’s most populous countries, Chinese Premier Xi Jinping and Indian Prime Minister Narendra Modi set the stage for healthy bilateral ties. Meeting on the sidelines of the sixth BRICS  summit in Brazil, just days after the Football World Cup finals, both leaders agreed to boost bilateral trade and smoothly resolve the border issue. China claims more than 90,000 sq km (35,000 sq miles) in the eastern sector of the Himalayas. India says China occupies 38,000 sq km of its territory on the Aksai Chin plateau in the west.

    During the 80 minute meeting, the neighbours agreed they would rather be long-term strategic partners, rather than competitors. A statement in local Chinese media – Xinhua said that China and India aim to work together to achieve peaceful development and cooperation so that the 2.5 billion people between our nations can live a better life and regional ties can be strengthened.

    In extending a hand, President Xi Jinping will also visit India is September, and has invited Modi to attend the 21 member Asia-Pacific Economic Cooperation meeting, or APEC in China two months later. India has never attended an APEC summit, and has long sought to become a member to help boost its economy. APEC includes Canada, Mexico, Russia and the United States and accounts for about 40 percent of the world’s population, 55 percent of global gross domestic product and 44 percent of world trade.

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  • china-steel-factoryIn an usual move, the World Trade Organisation said punitive tariffs imposed by the U.S. between 2007 and 2012 on the import of steel products, solar panels and certain other goods from India and China were improperly levied. Trade diplomats said the two cases, both under scrutiny for nearly two years by the separate panels, reflected a widespread concern in the 160-member WTO over what many see as illegal U.S. protection of its own producers.

    Welcomed by China’s Ministry of Commerce, the WTO panel found the US has insufficient evidence to prove hefty tariffs on Chinese firms producing items like kitchen shelving, grass cutters and even citric acid. In the US$7.2 billion Chinese case, the US claims it levied tariffs on the goods due to subsidies imposed by public Chinese companies. According to Reuters, a statement from China’s Ministry of Commerce said  “China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises”.

    In the April 2012 Indian case, a separate panel of judges also rejected the U.S. argument that supply from state-owned National Mineral Development Corporation allowed Indian steel exporters to be treated as public bodies. Large steel makers such as Tata, Jindal and Essar are supplied by the state-run iron-ore mining firm, NMDC. While the case wasn’t as clear cut as the Chinese, India claimed, the United States had “acted inconsistently” in terms of some provisions of the SCM agreement and had unfairly reduced Indian trade revenue.

    The WTO’s agreement on subsidies and countervailing measures, dubbed the SCM in trade jargon, as per the 1964 Marrakesh Agreement, states that duties can only be levied when the exporters are “public bodies.”

    The US – which has argued it imposed the tariffs to combat artificially low prices on products from India and China’s state-subsidised industries – has the right to appeal the ruling within 60 days.

     

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