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US challenges India’s ‘unfair’ export subsidy programmes at WTO

The US trade representative claims these programmes harm American workers by creating an uneven playing field

business Updated: Mar 15, 2018 10:33 IST
Yashwant Raj
Yashwant Raj
Hindustan Times, Washington
World Trade Organisation,WTO,Export subsidy
The United States challenged a number of India’s export subsidy programmes at the WTO saying they harm American workers by creating an uneven playing field.

The United States on Wednesday challenged a number of Indian government’s subsidy programmes, calling them “unfair” and sought dispute settlement consultations at the WTO.

The office of the US trade representative identified these programmes as Merchandise Exports from India Scheme; Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme; Special Economic Zones; Export Promotion Capital Goods Scheme; and a duty free imports for exporters program.

Consultations are the first step in dispute trade dispute resolution between WTO member nations, and if it doesn’t work, parties can seek a dispute settlement panel.

“These export subsidy programs harm American workers by creating an uneven playing field on which they must compete,” said US trade representative Robert Lighthizer in a statement. “USTR will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO.”

These challenges come amid a stepping up of pressure by the Trump administration on trading partners around the world, including allies in an overarching attempt to bring down America’s trade deficit from around $800 billion annually.

Last week the Trump administration announced tariffs of 25% and 10% on all steel and aluminum imports.

These export subsidies extended by the Indian government, the USTR’s office said provide “subsidies provide an unfair competitive advantage to recipients, and WTO rules expressly prohibit them

“In fact, India has increased the size and scope of these programs,” the statement said, adding, “For example, India introduced the Merchandise Exports from India Scheme in 2015, which has rapidly expanded to include more than 8,000 eligible products, nearly double the number of products covered at its inception.”

According to the American trade office these subsidies apply apply to a range of products including steel, pharmaceuticals, chemicals, information technology products, textiles, and apparel.

And it added, citing Indian government documents, “thousands of Indian companies are receiving benefits totaling over $7 billion annually from these programmes”.

First Published: Mar 15, 2018 10:33 IST