Rubber import can't be stopped

GATT does not allow ban or quantitative restrictions

KOTTAYAM: While demands for a six-month ban on rubber imports rise, experts point out that the General Agreements on Tariffs and Trade (GATT) 1994 does not allow it.

The agreement explicitly maintains that a member country cannot ban or quantitatively restrict imports even for a temporary period except under situations specified under Article XII (severe balance of payment crisis) and Article XX and Article XXI (to protect human, animal and plant life, and on national security grounds).

The surge in imports, piling up stocks or fall in prices do not provide justification for quantitative restrictions. But the anti-dumping duty or safeguard duty can be imposed in certain situations.

"Legally banning the import of rubber is not possible as per the agreements. However, the anti dumping duty can be imposed if a member country dumps the commodity below the market prices. The safeguard duty can be imposed if proved substantial increase in imports causing severe injury to the sector, and there must be a causal link between the two," Rubber Board joint director (planning) Dr Toms Joseph told DC.

The safeguard duty can be imposed on the recommendation of the directorate general of safeguards after he receives a petition on which an investigation can be conducted, and action recommended.

The petition should be either from the industry or the designated authority can take initiative suo moto. In both the cases, the import duty can be raised so as to compensate the injuries.

Rubber Board economist Dr Tharian George said the import cannot be banned owing to the removal of the clause of quantitative restrictions by the Union government on March 31, 2001.

( Source : deccan chronicle )
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