Fri, Mar 16, 2018 - Page 10 News List

US takes India to WTO over subsidies

ASIAN OFFENSIVE:The White House is also mulling slapping tariffs on billions of US dollars of Chinese imports, notably in the tech and telecommunications sector

AFP, WASHINGTON

The US on Wednesday said it was taking action at the 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 US President Donald Trump’s confrontations with major trading partners and followed his punishing new tariffs, with officials warning that more may come soon.

Documents seen by Agence France-Presse on Wednesday also showed 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 organization.

The White House is also considering slapping tariffs on billions of US dollars of Chinese imports, particularly in the tech and telecommunications sector, in response to allegedly improper practices involving US intellectual property.

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

US Trade Representative (USTR) Robert Lighthizer said in a statement on Wednesday that Indian export subsidy programs “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,” he said.

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 support for producers of pharmaceuticals, steel, chemicals, information technology products and textiles.

In 2016, the US ran a US$30.8 billion trade deficit with India in goods and services, the office said.

The office said India had expanded its export subsidy programs, doubling the number of products eligible under one program to 8,000 in the past three years.

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

Wednesday’s action was the first stand-alone WTO complaint lodged by the new administration. A prior case lodged in September last year over the sale of wine in Canadian grocery stories built on a complaint brought by the administration of former US president Barack Obama.

Under Obama in 2013, the US won a WTO decision against India over local content rules that Washington said disadvantaged US exports of solar panels.

Critics at the time said this undermined Indian efforts to develop local sources of renewable energy.

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