There are Various Ways for India to Take Trade Action Against China

Context: Chinese membership of the World Trade Organisation (WTO) should not deter India from taking trade action directed towards China.

Possible areas of trade actions against China:

• Anti-Dumping and Anti Subsidy Investigations:  

• Under the WTO, dumping has a specific definition and is determined by:

• • • • The domestic cost of production in China plus a markup.
      • The product’s price in China’s domestic market.
      • Export price in a third country.
    • China’s is on the backfoot: as it recently withdrew complain challenging the European Union’s allegation of anti-dumping on the basis of export price in the third country.
    • This has destroyed the hopes of China in getting “market economy” status as this was contingent upon China’s compliance with the disciplines of the WTO. 

• Safeguards Agreements:

• • • Safeguard measures are quantitative restrictions or tariff-rate quotas, not hikes in basic customs duties, which China has been imposing.
    • Safeguard measures must be applied on a Most Favoured Nation (MFN) basis, that is, “irrespective of the source”.

• Rules of Origin: China uses Regional Trade Agreements to bypass rules of origin, even routing its exports through agreements of which it is not apart. 

• India can walk out of the Asia Pacific Trade Agreement (APTA): as China gains more in comparison to India by being a part of it.
•  Any market access India obtains, or concessions it grants, can be pushed through the South Asian Free Trade Area and agreements with the Association of Southeast Asian Nations

Way Forward: 

• Renegotiate rules of origin: Since under WTO, not much has been done on harmonis=zing the rules of origin.
• Trade action can be directed against China: without mentioning standards despite it being WTO member.