Trump’s WTO action against India export subsidies

Robert Lighthizer
TRADE WARS: Robert Lighthizer

THE United States said last Wednesday (14) it was taking action at the World Trade Organisation (WTO) against Indi­an export subsidies as Washington’s in­tensifying trade offensive moved to en­compass two of Asia’s largest economies.

The action opened a new front in pres­ident Donald Trump’s confrontations with major trading partners and followed his punishing new import tariffs, with of­ficials warning that more may come soon.

In advance of the announcement on Indian exports, Trump tweeted early last Wednesday that the United States could not “keep a blind eye to the rampant unfair practices against our country!”

Documents seen also revealed the US has proposed WTO reforms that would punish members for violating basic rules, a move that appeared aimed squarely at China – a country the Trump administration has said is not a market economy and does not deserve member­ship in the multilateral organisation.

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

According to Lighthizer’s office, India offers benefits valued at $7 billion annu­ally to domestic exporters such as duty, tax and fee exemptions – including sup­port for producers of steel, pharmaceuti­cals, chemicals, information technology products and textiles.

In 2016, the US ran a $30.8 billion trade deficit with India in goods and ser­vices, according to Lighthizer’s office.

In last Wednesday’s statement, the of­fice said India had expanded its export subsidy programmes, doubling the num­ber of products eligible under one pro­gram to 8,000 in the last three years.

Trump has said publicly he does not favor resorting to dispute resolutions at the WTO, where he claims the United States is at a disadvantage. And the administra­tion has instead focused so far on tariffs and remedies under domestic US law.