The WTO and Development Policy Space in India
51 Pages Posted: 8 Apr 2019 Last revised: 17 Sep 2020
Date Written: March 30, 2019
International trade law scholarship has offered different approaches for assessing how international trade law impacts domestic policy space for developing nations. However, much of this scholarship has failed to address the realities of how domestic policy implementation affects development policy space. This article argues for a policy implementation-based approach to assessing development policy space by analyzing India’s response to two recent WTO disputes: India-Solar Cells (2013), and India-Export Related Measures (2018). In the India-Solar Cells dispute, the U.S. challenged India’s inclusion of local content requirements in its National Solar Mission program. In India-Export Related Measures, the U.S. challenged India’s export subsidies programs, including its Special Economic Zones (SEZs) policy. The WTO Appellate Body found that India’s local content requirements in India-Solar Cells violated international trade law norms, while the WTO panel in India-Export Measures will adjudicate on the request for consultations in India-Export Related Measures in 2019.
In examining how domestic policy implementation impact policy space, this article fills an important gap in the existing literature, which has paid insufficient attention to the domestic policy context of industrial policy in the context of international trade disputes. I argue that key dimensions of industrial policy regimes shape how nations respond to WTO decisions by implementing alternate WTO-compliant policies: the policy goals, tradeoffs and viability of policy alternatives; the nature and size of industrial sectors; and the existence of broader policy transitions. The article analyzes aspects of policy regimes governing India’s solar industrial policy and Special Economic Zones policy, and explores the nature of policy implementation and adaption in response to WTO adjudication in order to fully assess policy space in these sectors. The article concludes by suggesting the need to look beyond international law norms and WTO dispute resolution to the realities of the domestic policy landscape in order to provide a more complete account of how international trade law impacts development policy space.
Keywords: World Trade Organization, WTO, International Law, Trade, International Trade Law, Development, Policy Space, India, Renewable Energy, Solar, Special Economic Zones
JEL Classification: F14, F18, K32, K33, O24, O25, Q27
Suggested Citation: Suggested Citation