How a WTO provision became a tool for nations to curb imports

Source: The post is based on the article “How a WTO provision became a tool for nations to curb imports”  published in Business Standard on 9th August 2023.

What is the News?

The Government of India has recently imposed restrictions on the import of laptops, tablets, and personal computers. 

The new regulations mandate Companies to obtain licences from the Directorate General of Foreign Trade to import these items.

India has imposed these restrictions in accordance with the Agreement on Import Licensing Procedures under the World Trade Organization(WTO).

Note: In 2020 also, India had imposed restrictions on imports of pneumatic tyres used for cars, buses, lorries, scooters, and motorcycles,

What is Agreement on Import Licensing Procedures?

The WTO Agreement on Import Licensing Procedures says import licensing should be simple, transparent and predictable so as not to become an obstacle to trade.

For example, the agreement requires governments to publish sufficient information for traders to know how and why the licences are granted. 

It also describes how countries should notify the WTO when they introduce new import licensing procedures or change existing procedures.

What does the WTO reports say on Import Licensing?

As per Agreement on Import Licensing Procedures, all WTO members are required to notify their laws, rules and procedures on import licensing as well as changes to these regulations

But the WTO trade-monitoring reports have identified import licensing as one of the main trade- restricting measures introduced by governments with 13 WTO members not submitting any notification on this as of end-2022.

In 2022, the WTO members raised several new and recurring specific trade concerns regarding import curbs. 

The European Union(EU) and the United States questioned Angola’s import-licensing requirements, Egypt’s import licensing for certain agricultural products and Indonesia’s commodity-balancing mechanism.

During India’s latest Trade Policy Review in 2020, South Korea complained the import a licensing requirement by India for pneumatic tyres was causing “serious damage” to some firms doing business in India.