India appeals to WTO on Turkey’s cotton pricing

GENOVA - Reuters

Farmers pick cotton in a field in the southeastern province of Şanlıurfa. India is unhappy about Turkey’s policies to protect the domestic cotton industry. Hürriyet photo

India has filed a complaint at the World Trade Organization (WTO) about Turkey’s internal policies to protect its cotton industry, saying these policies can negatively affect India’s exports and cause the country to lose as much as $600 million dollars per year.

According to an Indian official, Turkey has been implementing protectionist policies for three years, starting in 2008, and has said it could extend these policies beyond the deadline that expired in July 2011. The official claims that Turkey has no right to do this at this juncture.

Protection started in 2005
Turkey began implementing extra taxes on cotton as long ago as 2005, in order to protect its cotton sector after a period of heavy importation. The issue stems from the fact that these taxes have since exceeded the five percent maximum tax stipulated by the WTO, reaching as much 15-20 percent on imported cotton, according to the source.

India claims Turkey does not apply these high taxes across the board to all developing countries if they are not major cotton exporters, but chooses to do so in an ad hoc fashion when it comes to India.

India launched the complaint at the WTO Feb. 12, and hopes to resolve the matter via a “consultation meeting” between the parties before launching a formal law suit.