India blocked a request from the United States on Monday to establish a World Trade Organization (WTO) dispute settlement panel to rule against “an additional duty and an extra additional duty” that New Delhi imposes on American wines and distilled spirits.
New Delhi argued at the World Trade Organization’s dispute settlement body meeting that it is considering bringing appropriate changes in its tax regime. India said it is “premature” to raise a dispute at a time when it is actively considering taking required step.
Earlier, the United States told the DSB that it is compelled to ask for establishment of a panel due to failure of consultations between Washington and New Delhi to amicably resolve the dispute. It pointed that the duties levied on foreign wines and spirits  in India is “inconsistent with Article II:1(a) and (b) of the GATT 1994.”  Though India could block a first-time request from the US, it would not be able to prevent the establishment of a panel if Washington persists with a second-time request in the next 10 or 12 days. Already, a panel is established at the request of the European Union to adjudicate over Brussels’ complaint against New Delhi on the same issue.
Bank guarantees
Meanwhile, the US and India are currently undergoing dispute settlement proceedings over New Delhi’s dispute against Washington's imposition of huge bank guarantees on India's shrimp exporters. Among several cases on the US’ anti-dumping duties on shrimp products, India’s case targets the allegedly unlawful bank guarantee, trade diplomats said.
The US also came under pressure from the European Union which secured the approval from World Trade Organization’s dispute settlement body to establish a panel against Washington’s continued use of zeroing methodology in calculating anti-dumping margins, a move the US described as “premature.”
The EU persisted with its second-time request for establishing a panel against the continued use of zeroing methodology by the US Commerce Department. The EU said it would have preferred to “avoid a further dispute” but there was no alternative.
The US maintained it is considering the issue of zeroing in assessment reviews in the context of its dispute with Japan hinting a major overhaul by the end of this year. The US complained that the EU’s panel request includes issues relating to assessment reviews and sunset reviews that were not raised during the consultations.