US LOCKS HORN WITH INDIA ON SUBSIDIES
Calls programmes unfair, seeks dispute settlement consultations
The United States has 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, sector specific schemes and a duty free imports for exporters programme. These challenges come amid a stepping up of pressure by the Trump administration on trading partners in an overarching attempt to bring down America’s trade deficit from around $800 billion annually.
WASHINGTON: The United States on Wednesday challenged a number of Indian government subsidy programmes calling them “unfair” and sought dispute settlement consultations at the WTO.
The office of the US trade representative (USTR) 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 programmes 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 in an overarching attempt to bring down America’s trade deficit from around $800 billion annually. And its follows a a decision to levy tariffs of 25% and 10% on all steel and aluminium imports.
These export subsidies, the USTR’s office said provide an unfair advantage to recipients, local Indian entities, which is prohibited under the rules of the WTO. “In fact, India has increased the size and scope of these programmes,” 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 to a range of products including steel, pharmaceuticals, chemicals, information technology products, textiles, and apparel.
Citing Indian government documents, it added, “thousands of Indian companies are receiving benefits totaling over $7 billion annually from these programmes”.