US launches WTO action on Indian export subsidies

US launches WTO action on Indian export subsidies

India economy
An Indian worker checks on a machine manufacturing dupattas, a traditional scarf worn by women in South Asia, at a factory in Amritsar on Feb 16, 2018. (NARINDER NANU/AFP)

WASHINGTON: The United States said on Wednesday (Mar 14) it was taking action at the World Trade Organisation against Indian government export subsidies, which officials said unfairly disadvantaged American workers and manufacturers.

"These export subsidy programmes harm American workers by creating an uneven playing field on which they must compete," US Trade Representative Robert Lighthizer said in a statement.

Robert Lighthizer
US Trade Representative Robert Lighthizer takes action at the World Trade Organisation against Indian export subsidies. (AFP/STEPHANIE LECOCQ)

"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 US$7 billion annually to domestic exporters such as duty, tax and fee exemptions - including producers of steel, pharmaceuticals, chemicals, information technology products and textiles.

The action opened a new front in President Donald Trump's intensifying trade offensive, with the White House having already announced import duties on steel and aluminium as well as imports of solar panels and washing machines.

Trump tweeted early on Wednesday that the United States could not "keep a blind eye to the rampant unfair practices against our country!"

The White House is also considering slapping tariffs on billions of dollars in Chinese imports, particularly in the tech and telecommunications sector.

In Wednesday's statement, the office of the US Trade Representative said India had expanded its export subsidy programmes, doubling the number of eligible products in the last three years.

Trump has said he does not favour resorting to dispute resolutions at the WTO, where he claims the United States is at a disadvantage.

The administration has instead focused so far on tariffs and remedies under domestic US law.

The prior administration of President Barack Obama, however, touted US successes in opening foreign markets to US exports by winning favourable WTO decisions.

Source: AFP/de