The scheme of Generalised
System of Preference (GSP) of the European Union (EU) for the
period 1st January 2002to 31st December
2004 inter-alia provides for suspension by the EU of customs
duties for all products which have not graduated under special
tariff arrangements to combat drug production and trafficking.
Pakistan is one of the beneficiary countries under this special
arrangement. As this may adversely affect India’s exports to
EU, India had taken up this issue with EU through bilateral
consultations held in February 2002 and July 2002 and consultations
under the Dispute Settlement Mechanism of the World Trade Organisation
(WTO) on 25th March 2002. During these consultations,
it was highlighted that India would stand to lose substantial
trade on account of duty concessions given to Pakistan. The
EU was requested to rectify the adverse trade impact due to
such concessions. As the EU did not address our concerns in
this regard, the Dispute Settlement Body (DSB) was requested
to establish a panel in this dispute. During its meeting held
on 27th January, 2003 the DSB has establish a panel
to examine India’s claims in this dispute. This was indicated
by Shri Arun Jaitley, Minister of Commerce & Industry, in
a written reply in the Lok Sabha today.
