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Leveling the playing field: industrial policy and export-contingent subsidies in India-export related measures

Dhingra, Swati and Meyer, Timothy (2021) Leveling the playing field: industrial policy and export-contingent subsidies in India-export related measures. World Trade Review, 20 (4). pp. 606-622. ISSN 1474-7456

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Identification Number: 10.1017/S147474562100032X

Abstract

In India–Export Related Measures, the United States challenged a range of Indian measures as prohibited export-contingent subsidies, and a WTO panel largely agreed. This article examines the factors at play in the United States’ decision to bring the challenge. At the level of policy, the United States case reflects India's graduation from the protections afforded developing nations’ export-contingent subsidies under the Agreement on Subsidies and Countervailing Measures. A closer examination, however, shows that India ramped up its export-contingent subsidies just as the SCM Agreement required it to wind those subsidies down. Moreover, the expanded Indian subsidies led to increased import competition with the politically influential metals and pharmaceutical sectors in the United States, which pushed the US challenge. We reflect on the larger implications of the challenge for the future of trade rules on industrial policy. In particular, we note that the United States pursued a trade enforcement policy that would have the effect of increasing pharmaceutical prices in the United States, by reducing subsidies for imported generic drugs, at a time when the Trump administration allegedly was trying to reduce the price of prescription drugs. This disconnect suggests the need for both greater transparency in trade policy and greater governmental coordination on the connection between trade policy and other policy priorities.

Item Type: Article
Official URL: https://www.cambridge.org/core/journals/world-trad...
Additional Information: © 2021 The Authors
Divisions: Economics
Subjects: H Social Sciences > HD Industries. Land use. Labor
J Political Science > JZ International relations
Date Deposited: 21 May 2021 10:51
Last Modified: 20 Sep 2021 11:27
URI: http://eprints.lse.ac.uk/id/eprint/110522

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