India, South Africa and China have protested against a joint US-EU proposal to punish countries that have not followed notification requirements under various World Trade Organization (WTO) agreements. The countries feel it is unfair to impose harsh requirements on developing countries facing deep capacity constraints, and are reminiscent of colonial era rules. As a part of proposed reforms to the global trade body, the US and EU, along with Japan, Canada, Australia, Costa Rica, Argentina and Taiwan, on April 11, sought to impose stringent notification requirements, including financial penalties, on countries for failure to comply.

At the meeting of WTO’s Council on Trade in Goods (CTG), the US justified the proposal on grounds of “chronic low level compliance with existing notification requirements under many WTO agreements (by members)". It seeks to allow “a counter-notification of another member concerning notification obligations". Under this practice, deemed controversial by many countries, a WTO member can issue a counter-notification against a member, claiming the latter had breached its commitments under that specific WTO-agreement.

Recently, the US had filed counter notifications claiming New Delhi’s subsidy schemes, especially minimum support prices for rice, wheat and cotton, breached India’s scheduled subsidy commitments to the WTO.

India, however, rejected the US stand saying it was based on flawed assumptions and erroneous practices. The counter-notification by the US on Indian grains and cotton was based on data from American farm lobbies, which reckon India as a major threat to its subsidised-exports to countries.