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GENEVA — The World Trade Organization established a dispute panel Monday to examine a complaint by India that alleges U.S. rules of origin for textiles and apparel products break global trade rules.

This story first appeared in the June 28, 2002 issue of WWD.  Subscribe Today.

The Indian request, approved at a session of the WTO’s Dispute Settlement Body, asserts that U.S. rules of origin for textiles and apparel products set out during the Uruguay Round and updated in the Trade and Development Act of 2000, break WTO rules.

The Indian delegation claims U.S. requirements have resulted “in extraordinary complex rules of origin for textiles and apparel products…under which the criteria that confer origin vary between similar products and processing operations.”

It also leveled the charge that U.S. rules of origin “are used as instruments to pursue trade objectives and have created restrictive, distorting and disruptive effects on international trade.”

India’s complaint charges that U.S. rules of origin treat textiles and apparel differently than other industrial products, and that within the textile and apparel area, different varieties of goods that are produced by similar means are treated differently.

However, Linnet F. Deily, Deputy U.S. Trade Representative, told delegates from 144 countries that, contrary to the claims by India, the rules “are fully consistent with our obligations under the Agreement on Rules of Origin, and we are confident that a panel will agree with us.”

In recent years, U.S. and industry officials have complained that India itself has in place onerous tariff and non-tariff restrictions on trade that make it difficult for U.S. firms to sell goods to Indian customers.