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

Swati Dhingra and Timothy Meyer

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2021-10-02
New Economics Papers: this item is included in nep-int and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in World Trade Review, 2, October, 2021, 20(4), pp. 606 - 622. ISSN: 1474-7456

Downloads: (external link)
http://eprints.lse.ac.uk/110522/ Open access version. (application/pdf)

Related works:
Journal Article: Leveling the Playing Field: Industrial Policy and Export-Contingent Subsidies in India–Export Related Measures (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:110522

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().