Samachar Manthan: Weekly CA Enforcer + Writing Assessment Program for IAS 2018

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119 nations back move to remove barriers limiting women’s participation in trade

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: Buenos Aires Declaration on Women and Trade, WTO

Mains level: Efforts across world for Women empowerment


News

Buenos Aires Declaration on Women and Trade

  1. Nearly three-fourths of the 164-member World Trade Organisation (WTO) have supported a declaration seeking women’s economic empowerment by expeditiously removing barriers to trade
  2. India stayed away from declaration, opposing the linking of gender and trade and said that such issues should be discussed outside WTO

What will declaration do?

  1. WTO members and observers supporting the Declaration have specifically agreed to explore and find ways to best tackle women’s general lack of access to trade financing and sub-optimal participation of women in public procurement markets
  2. Inclusion of women-led businesses, in particular, small firms in value chains has also been identified as a theme related to trade and the economic empowerment of women

Reasoning behind India’s stand

  1. Agreeing to the proposition to link gender and trade could lead to advanced countries using their high standards in gender-related policies to curb exports from the developing world
  2. This could also indirectly restrict developing countries from incentivizing their women citizens as part of measures to address developmental challenges
  3. Discussing such issues at WTO will set a precedent to bring in other non-trade issues such as labour and environment standards into the WTO’s ambit

No WTO deal without food security: India

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, WTO Ministerial Conference, Doha Round of negotiations, Trade Facilitation in Services (TFS) Agreement

Mains level: Issues related to food security and WTO agreements


News

Issue of public stockholding crucial

  1. India has said it cannot envisage any negotiated outcome, at the ongoing meeting of the World Trade Organisation’s apex decision-making body, which does not include successful resolution of the food security right issue
  2. At the Plenary Session of the WTO Ministerial Conference (MC), India’s commerce and industry minister said the permanent solution for public stockholding for food security purposes is a matter of survival for 800 million hungry and undernourished people in the world

What does India want?

  1. India wants the WTO membership to re-endorse the centrality of development (the agenda to improve the trading prospects of developing nations) in WTO negotiations without creating new sub-categories of countries
  2. This is in the context of attempts by certain rich countries to wreck the broad unity among developing nations on a host of issues
  3. Developed countries such as U.S. have suggested that countries such as India and China are currently emerging economies and reasonably strong in trade — unlike others in the developing world
  4. Therefore, such powerful nations that are still in the ‘developing’ category do not deserve to gain from the favorable treatment meant only for developing nations in WTO Agreements

‘No’ to ‘new issues’

  1. India opposed the endeavor of certain countries to include ‘new issues’ — such as e-commerce, investment facilitation and matters relating to small firms — in the ongoing Doha Round of negotiations
  2. The Minister also pushed India’s proposal for a Trade Facilitation in Services (TFS) Agreement, which, among other things, aims to liberalize rules on movement of professionals and skilled workers across borders for temporary work/projects

[op-ed snap] Crunch time at WTO

Image Source

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Issues related to the WTO(read the attached story)

Mains level: Upcoming challenges in the WTO’s meeting


News

The proposals trade ministers will consider WTO’s 11th biennial Ministerial Conference(in Buenos)

  1. Notable among the proposals trade ministers will consider are those relating to new rules on farm subsidies, the elimination of support for unsustainable fisheries, and the regulation of e-commerce
    Joint Proposals by India and China
  2. With the backing of more than 100 countries, a joint proposal from India and China to eliminate the most trade-distorting farm subsidies worth $160 billion in several industrialised economies
  3. It is arguably the most contentious agenda item at the Ministerial
  4. The two countries see this as a prerequisite to address the prevailing imbalance in the Agreement on Agriculture, which unfairly benefits developed countries

Cautions regarding the joint proposals 

  1. But host Argentina has cautioned that the joint proposal could potentially unravel negotiations

Dispute regarding subsidies and G-33 coalition

  1. The other major dispute centres on finding a so-called permanent solution to the large subsidies that underpin public stock-holding programmes to bolster food security in the developing world
  2. The G-33 coalition, which includes Indonesia, China and India, seeks a complete exemption from commitments to reduce subsidies, such as minimum support prices, from this poverty-alleviation programme
    Support from EU and Brazil
  3. The EU and Brazil have expressed broad support for the G-33 coalition’s position on public stock-holding programmes
  4. But in return they seek agreement on their own proposal to reduce trade-distorting subsidies on a percentage basis, in both advanced and developing economies

A new issue created by the US

  1. The US has been exploring an alternative, unilateral route away from the formal dispute resolution mechanism of the Geneva-based body to settle perceived and real trade conflicts with partners
  2. It has blocked fresh appointments to fill vacancies on the seven-member WTO appellate body
  3. The risk of Mr. Trump’s protectionist rhetoric translating into economic barriers remains real
  4. Trade leaders gathered in Buenos Aires can ill-afford to lose sight of this imperative

WTO: diverse views fuel bleak prospect for outcomes

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Doha Round negotiations, Special Safeguard Mechanism, Aggregate Measurement of Support (AMS), G-33, South Centre

Mains level: WTO mandate and its effect on India’s interests


News

World Trade Organisation’s (WTO) Buenos Aires meeting commenced

  1. Amid concerns on support for anti-globalisation, protectionism and bilateralism, World Trade Organisation’s (WTO) Buenos Aires meeting commenced on 10th December
  2. A vast majority of the 164 WTO member nations — led by India, China and South Africa — are learnt to be demanding that the final declaration of the WTO’s highest decision-making body reaffirms commitment to multilateralism and rules-based trading system

No substantial outcome expected

  1. This might be due to the divergent views of the WTO members on several issues, including the outstanding ones in the ongoing Doha Round negotiations
  2. Countries, mostly from the developed world, want what they call the ‘21st century trade issues’ — such as e-commerce, investment facilitation, matters relating to small firms and gender equality — to be discussed for rule-making to enhance the relevance of the WTO
  3. India, and several countries mainly from the developing world, are against introduction of such ‘new issues’ into the Doha Round

A separate work programme

  1. Owing to persistent differences, it is likely to be decided that issues such as ‘Special Safeguard Mechanism’, ‘limiting harmful fisheries subsidies’, ‘possible negotiations on e-commerce’, as well as ‘services trade facilitation’ will be addressed through separate ‘work programme(s)’ post Buenos Aires
  2. India, China and South Africa have the support of around 120 WTO member nations on the issue of continuation of the ‘development’ mandate of the Doha Round without any dilution
  3. This support also applies to India’s joint proposal with China — asking the developed nations to eliminate the most trade-distorting form of farm subsidies, known in WTO jargon as Aggregate Measurement of Support (AMS)

India’s stand

  1. On agricultural issues including the ‘permanent solution’ and SSM, India is working with G-33 (a group of 47 nations)
  2. India had made it clear that it would not accept a ‘permanent solution’ with onerous conditions that in turn make it tough for the Indian government or other developing countries as well to meet the food security needs of their people
  3. To get wide support on India’s interests, commerce minister also met with the South Centre, an intergovernmental organisation of developing nations

Back2Basics

Know all about WTO here

India opposes e-commerce talks at WTO; submits document

Note4students

Mains Paper 2 : Global groupings and agreements involving India and/or affecting India’s interests
Prelims level: Not much
Mains level: India’s stand on e-commerce in WTO

News

  1. India has for the first time submitted a formal document opposing any negotiations on e-commerce at the World Trade Organisation (WTO).
  2. The submission comes ahead of the key ministerial conference of the WTO next week.

India’s Stand

  1. The country has said that it would “continue the work under the Work Programme on electronic commerce… based on the existing mandate and guidelines.
  2. India has maintained that e-commerce per se may be good for development
  3. But it may not be prudent to begin talks since many countries don’t fully understand the implications of negotiating binding rules.
  4. India also asked the General Council for periodic reviews based on reports made by agencies responsible for implementation of the work programme.
Work Programme on Electronic Commerce
  1. E-commerce entered the WTO in 1998, when member countries agreed not to impose customs duties on electronic transmissions.
  2. the moratorium has been extended periodically.
Stand of Other Countries
  1. The United States last year floated a proposal on e-commerce
  •   prohibiting digital customs duties,
  •   enabling cross-border data flows,
  • promoting a free and open internet and
  •  preventing localisation barriers
  1. China wants easier norms for goods ordered over the internet but physically delivered.
  2. Some countries want to convert this temporary moratorium on customs duty on electronic transmissions into a permanent one.
Adverse effect of Permanent Moratorium
  1. Considerable leakage of revenue as more products and services get delivered through electronic transmissions.
  2. Manufacturing through 3-D printing in absence of customs duty could have severe adverse impact on the domestic manufacturing sector.

Tread carefully on fishery subsidies in WTO: CWS to government 

Note4Students

Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.
The following things are important from UPSC perspective:

Prelims Level: WTO, EEZ, Uruguay Round

Mains level: The news card discusses the working paper by CWS which cautions India to be vigilant while taking obligations on the subsidies it gives
to its fisheries sector.

News

Context

  • Ahead of the key ministerial meeting of the World Trade Organisation (WTO), a government think tank has cautioned India to be vigilant while taking any obligations on the subsidies it gives to its fisheries sector as it may end up curtailing the country flexibility to fish in its own waters.
  • Citing fish and two of its byproducts – fish oil and fish meal – as having high global demand for use in pharmaceuticals and anti-biotics, respectively, New Delhi-based Centre for WTO Studies (CWS) in a working paper has said that the disciplines on fishery subsidies have a market access agenda and a clear commercial interest of selected developed countries.

Background

  • The paper comes at a time when India and some other developing countries are fighting to give fuel subsidies to their small and resource-poor fish workers in the proposed global agreement to prohibit subsidies to vessels engaged in illegal, unreported and unregulated (IUU) fishing in its exclusive economic zone (EEZ).
  • EEZ is the sea zone extending up to 200 nautical miles from the shore and governed by the central government.

Key Highlights from CWS Working Paper

  1. An agreement on fisheries without exempting developing countries will restrict their flexibility to trade in fish and its byproducts.
  2. As per the paper, the global fish meal and fish oil market is projected to reach $14.28 billion by 2022.
  3. Also, the binding rules on fisheries management have been enunciated under the United Nations Convention on the Law of the Sea andthe UN Fish Stocks Agreement.
  4.  Besides, non-binding obligations on fisheries management are entailed under the Food and Agriculture Organization.
  5. The countries need to be vigilant as IUU measures should not be a disguised restriction to international trade.

Concerns regarding Agreement on Fishery Subsidies

  1. An agreement on fishery subsidies will ensure that there is no competition from developing countries.
  2.  Developing countries wouldn't be able to exploit their own resources because they won't have the capacity to do so.
  3.  Therefore, developing countries need to ensure that the history of the imbalance suffered from the disciplines on agriculture subsidies during the Uruguay round is not repeated in fisheries subsidies.

WTO: India sounds warning over food security clause

Note4Students

Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.

The following things are important from UPSC perspective:

Prelims: G33, Peace Clause, WTO

Mains level: Peace Clause has been in the news since Bali ministerial conference, 2013 and is an important topic for the Mains.


News

Context

  • India’s WTO ambassador J.S. Deepak warned of a “spectacular failure” at the forthcoming Buenos Aires trade ministers’ conference if countries fail to deliver a credible “permanent solution” on public stockholding (PSH) programmes.

India’s demands regarding Permanent Solution on PSH

  1. Trade ministers had mandated WTO to conclude the permanent solution for PSH programmes by the 11th ministerial meeting that begins on 10 December.
  2. The permanent solution has to be “an improvement” over the existing perpetual peace clause that was concluded at the World Trade Organization’s (WTO’s) ninth ministerial conference in December 2013 in Bali, which was further clarified by the WTO General Council in November 2014.
  3. India, which is a member of the G33 coalition of more than 45 countries including China, remains concerned about “the excessively stringent transparency requirements and safeguard being proposed” by some opponents.
  4. India said the permanent solution has to provide legal permanence through amendment of WTO rules.
  5. Also, the mandate for a permanent solution on PSH flows from ministerial decisions and has no link whatsoever with the negotiations on domestic support.

Joint Proposal by Norway and Singapore

  1. India is prepared to consider reasonable transparency provisions that are implementable by developing countries, it will not accept onerous conditions for safeguards as proposed in a joint proposal by Norway and Singapore.
  2. The transparency conditions includes-
  • Informing WTO about “exceeding or risk of exceeding” the agreement measurement of support or most trade-distorting farm subsidy limits;
  • Timely notification of domestic subsidies;
  • Information about breaches if any on a post-ante basis; and prompt notification of statistical information.
  1. The proposal listed two “anti-circumvention/transparency” conditions for instance India and other developing countries must ensure that “stocks procured under such (PSH) programmes do not distort trade or adversely affect the food security of other members.
  2. Further, India and other beneficiaries of the permanent solution must ensure that stocks procured for their PSH programmes do not enter “direct or indirect exports”, Norway and Singapore maintained.

Views of various countries regarding Permanent Solution on PSH

  1. Indonesia, on behalf of the G33 coalition, said, the establishment of a permanent solution on PSH for all developing members and accessible, simple and effective SSM remain priority for the Group.
  2. China said the Buenos Aires meeting must deliver a simple and effective permanent solution without onerous conditions.
  3. At the informal meeting, the opponents of an easy and effective permanent solution for PSH programmes such as the European Union, Brazil, Australia and Pakistan among others insisted that there must be strong transparency and safeguard conditions in the final instrument.
  4. Brazil said the permanent solution has to be part of an outcome on domestic support.
  5. The US is willing to support the permanent solution if it does not take the Bali decision backwards, implying that India must accept an outcome without any change/improvement from the December 2013 decision.

Various other issues raised by India

  1. India also issued several red lines for the Buenos Aires meeting, particularly on new issues such as “investment facilitation, disciplines for micro, small and medium enterprises, and gender”, saying they “do not have mandates in place in the WTO”.
  2. Also India cautioned that the ministerial meeting is being held at a particularly difficult time and context for WTO and it is not the opportune time to enter into contentious and divisive debates by seeking ambitious outcomes in e-commerce India cautioned at the meeting.

Back2basics

Peace Clause

  1. No member, can drag any developing country to Dispute settlement mechanism of WTO for violation of De-minimus limits in AoA, provided that the said developing country –
  • is paying subsidies for staple food crops for public stockholding program & food security purpose;
  • And is providing annual information of its food security Program to WTO.

 

 

 

 

Over 100 nations back India-China plan on farm subsidies before WTO meet

Image Source

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

The following things are important from UPSC perspective:

Prelims: AoA

Mains level: Issues related to AoA and PSH.


News

Support to India and China in the WTO

  1.  More than 100 countries have backed a joint proposal by China and India for eliminating the most trade-distorting farm subsidies of $160 billion 
  2. This huge subsidy is given in countries like the US, the European Union, Japan, Canada, Norway, and Switzerland
  3. This proposal was given in the World Trade Organization’s 11th trade ministerial summit
  4. In their proposal, India and China said it is a prerequisite to address “the imbalance in the existing AoA (Agreement on Agriculture)
  5. In AoA only some members (the US, the EU, Japan, Canada, Switzerland, Norway and a few developing countries) have access to bound AMS(Aggregate Measurement of Support)
  6. AMS are entitlements to provide billions of dollars for most trade-distorting subsidies, which allows them much “more policy space”

India’s notice on public stock-holding (PSH)

  1. India has served notice to its the European Union, Australia, Argentina, Brazil, Paraguay and Pakistan
  2. Why: Because India will not offer any further concessions for market access or enter into trade-offs in the negotiations for a permanent solution on PSH programmes 

Back2basics

Agreement on Agriculture

  1. The Agreement on Agriculture (AoA) is an international treaty of the World Trade Organization
  2. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995

Image Source

India is ‘non-committal’ on market economy tag for China II

  1. Solution: To refuse China the ‘MES’, India has taken sides with the U.S. and European Union
  2. Their stand is that in ‘market economies’ where prices of items are market determined (based on demand & supply conditions)
  3. But, there is still a significant government influence in the Chinese market
  4. The intention will be to ensure India’s manufacturing sector is not hit by unfairly priced Chinese goods
  5. Several nations that have a strong manufacturing base are concerned about according MES to China
  6. While nations in Africa and Latin America — dependant on Chinese investments to boost manufacturing — are inclined to grant MES to China

India is ‘non-committal’ on market economy tag for China I

  1. Issue: Beijing has said WTO member countries must fulfil their promise to deem China a ‘market economy’ from Dec 2016
  2. Reason: Provisions in the ‘Protocol on the accession of China to the WTO’ in 2001
  3. But India is not inclined to automatically grant the coveted ‘Market Economy Status’ (MES) to China this Dec under WTO norms
  4. Reason: Granting MES to China will severely curb the ability of nations including India to impose anti-dumping duties on “unfairly priced” Chinese imports
  5. Of the 535 cases where anti-dumping duties were imposed by India during 1994 to 2014, a maximum of 134 has been on goods from China

What is Most Favoured Nation status?

  1. The MFN principle is a part of the WTO’s General Agreement on Tariffs and Trade (GATT), to which India is a signatory
  2. MFN: Each of the WTO member countries should treat all the other members equally as most-favoured trading partners
  3. In the words of WTO, ‘Grant someone a special favour (such as a lower customs duty rate) and you have to do the same for all other WTO members’
  4. Hence, though MFN sounds like special treatment, in effect it means non-discrimination

The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and Peace Clause’ appear in the news frequently in the context of the affairs of the: [Prelims 2015]

a) Food and Agriculture Organization
b) United Nations Framework Conference on Climate Change
c) World Trade Organization
d) United Nations Environment Programme

[op-ed snap] A case for accepting the WTO ruling

  1. Theme: Accepting the WTO solar ruling
  2. Issue: Indian govt. policy utilized Domestic Content Requirements (DCR) to favour domestic companies for purchasing solar equipment. The US contested this policy in WTO and the WTO declared the policy illegal.
  3. Dimensions of this case: legal issues, environmental impact and India-U.S. trade relations.
  4. Legal issues: WTO prohibits discrimination against goods based on origin or destination. India tried to justify policy on 3 exceptions.
  5. First, the rule is inapplicable to govt procurement. WTO using legal precedents said that govt is procuring electricity and not solar panels.
  6. Second, WTO denied India’s contention that domestic supply was limited. WTO said that supply must be seen from all sources, not just domestic.
  7. Third, India failed to show a domestic law or international legal norm which would justify its policy.
  8. Environmental impact: the WTO ruling is not against environment or the Jawaharlal Nehru National Solar Mission (JNNSM). WTO prevents members from using trade policies to discriminate in trade matters.
  9. India-U.S. trade relations: although both countries say that they want to bring down barriers but besides this dispute, there are 4 other disputes between the two in the WTO.
  10. Such policies raise the potential for other countries to discriminate against us similarly. DCR rules would also result in high costs for solar energy. Hence, India should comply with the ruling.

What is Doha Development Agenda

  1. The latest round of trade negotiations among the WTO members started at Doha in 2001.
  2. The negotiation at this round is also known as the Doha Development Agenda.
  3. Aim – To sign a pact to open up world trade by lowering or eliminating trade barriers.
  4. It will help in improving the trade prospects of developing and poor countries, and remove the distortions in world trade.

Indian agenda for Oslo meet

  1. India is preparing to take the lead in WTO-level talks to open up global services trade
  2. Aim: Especially to ensure easier movement of skilled professionals for short-term projects overseas
  3. Services TFA: In this regard, India is working on a formal proposal to be submitted soon before the WTO on a ‘Trade Facilitation Agreement (TFA) in Services’
  4. Why Services TFA? India has a strong services sector and a huge pool of skilled professionals & would be hugely benefitted from such agreement
  5. Background: India had informally pitched for a WTO-level ‘TFA in Services’ at the Organisation for Economic Co-operation and Development ministerial council meeting in Paris in June
  6. The ‘TFA in Services’ proposal, similar to the WTO’s TFA for Goods (aimed at easing customs norms & boosting global merchandise trade), was then welcomed by Azevêdo and several trade ministers

The ‘new issues’ in the world trade

  1. Context: The Oslo meeting of finance ministers is likely to discuss the so-called ‘new issues considered important by the rich nations in today’s global trade
  2. The New Issues include:
  • Clean energy: Efforts to reach an agreement at the WTO-level to eliminate tariffs on environmental & sustainable goods produced using clean & green energy
  • E-commerce
  • GVCs: Global Value Chains & promotion of supply chains
  • Brexit: Its impact on global trade

A background to the trade ministers’ meet

  1. WTO’s Trade Report: The high-level political convergence comes against the backdrop of WTO Director-General Roberto Azevêdo’s statement last month in his ‘Mid-year Report on Trade-related Developments’
  2. The report showed a worrying rise in the rate of new trade-restrictive measures put in place each month (by WTO member countries)- hitting the highest monthly average since 2011
  3. The world trade growth is likely to remain below 3% in 2016, making it the fifth consecutive year of sub 3% expansion
  4. Doha issues: The meet is also being planned at a time when the progress in the WTO’s nearly 15-year-old Doha Round negotiations is seen to be very slow’
  5. Why slow? It especially due to the perceived ‘disengagement’ of the U.S. that is going in for Presidential elections in November

Amid growing protectionism, global trade ministers to meet in Oslo

  1. What? Trade ministers from many WTO members will gather at the Norwegian capital, Oslo, in October
  2. Why? To discuss the need for further liberalisation of global trade amid growing protectionism
  3. It will also deliberate upon the WTO’s future role in the context of ‘new challenges‘ for the global trading system and some ‘troubling’ international political developments

What are Global Value Chains?

  1. In GVCs, the different stages of the production process are located across different countries to optimise production
  2. Globalisation motivates companies to restructure their operations internationally through outsourcing and offshoring of activities
  3. The whole process of producing goods, from raw materials to finished products, is increasingly carried out wherever the necessary skills and materials are available at competitive cost and quality
  4. The past decades have witnessed a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc.
  5. Example: Surat (India) is famous for its diamond cutting and polishing industry and Russia is the highest producer of diamonds
  6. In this case, diamonds will be mined in Russia and then rough diamonds sent to Surat and after polishing here, they’ll be sent for sale worldwide in high value diamond markets like USA

What’s the issue with GVCs?

  1. Multinational firms mostly based in developed countries use GVCs spread across the world for their production network through a chain of contract manufacturers, suppliers and logistics providers
  2. Developing countries fear that in the garb of formulating GVC rules under WTO, developed countries will force them to bring down tariff rates, set new investment and labour standards
  3. These could be detrimental to their interest

India reconsiders opposition to new trade issues at WTO

  1. Reason: Understanding that it can’t keep on opposing such issues for too long
  2. New trade issues: Such as global value chain (GVC) and e-commerce
  3. Background: India has so far maintained that member-countries must conclude the long-pending Doha Development Round of the WTO before taking up any new issues for negotiations

Recent India-US trade disputes – WTO

  1. Ban of poultry imports from US – India lost the case
  2. Solar panel case (Domestic Content Requirements) – India lost the case
  3. Increased visa fees by the US – consultations are going on currently

What is there in the Peace Clause?

  1. No WTO member can drag any developing country to Dispute settlement mechanism of WTO for violation of De-minimus limits in AoA
  2. This is, provided that the said developing country is paying subsidies for staple foodcrops or for public stockholding program or for food security purpose
  3. And also that it is providing annual information of its food security Program to WTO
  4. Permanent solution will be taken no later than 11th ministerial conference int December 2017

What is Bali Package?

  1. In December 2013, 9th WTO ministerial conference was held at Bali, Indonesia
  2. Bali Package is the collection of three prime outcomes of this summit
  3. Trade facilitation agreement: To cut down the red tape in customs clearance
  4. LDC exports: Exporters from Least developing countries, will get Duty free, quota free (DFQF) access to markets in foreign countries
  5. Food stockholding: As per the original Agreement on agriculture (AoA), the developed and developing countries have to keep their Amber box subsidies within De-minimus level i.e. 5% and 10% of their agriculture production in 1986-88 respectively
  6. India opposed this base year and limits, because it would make impossible to implement the food security programs for the poor and MSP for the farmers
  7. Therefore, as a measure of temporary relief, Bali summit enacted a peace clause for the AoA

Other issues at WTO

  1. India also reiterated taking up of the remaining Doha Development Agenda (DDA) issues including agriculture before taking up of new issues at WTO
  2. Aim: To improve the trade prospects of developing and poor nations
  3. Remaining DDA issues: Special Safeguard Mechanism (SSM) & public stockholding of food grains for food security purposes
  4. SSM: For developing countries to counter import surges of farm items
  5. India also emphasised on the need for implementing the WTO’s Bali and Nairobi Ministerial decisions
  6. These issues will lay the foundation for the outcomes of the WTO Ministerial Conference in 2017

TFA in Services- a background

  1. India had proposed the TFA in Services after the December 2015 WTO ministerial conference in Nairobi (Kenya)
  2. The proposed TFA in Services is on the lines of the WTO’s TFA on goods that is aimed at easing customs rules to expedite trade flows
  3. India has already ratified the TFA on goods
  4. Services: Account for over half of India’s GDP

WTO welcomes TFA proposal

  1. WTO has welcomed India’s proposal for a Trade Facilitation Agreement (TFA) in Services
  2. Proposal: Easier temporary movement of skilled workers to boost global services trade
  3. The proposal was reiterated during the informal meeting of trade ministers from 25 WTO member countries on the sidelines of OECD ministerial council meeting in Paris
  4. WTO also emphasised on working on Trade Facilitation in Services including Mode 4
  5. Mode 4: It pertains to temporary movement of natural persons including skilled workers

Need for capacity building in WTO issues

  1. Issue: There are only a few Indian law firms in trade law practice
  2. Therefore, to handle India’s trade disputes with other countries, the govt has been engaging both international and Indian law firms
  3. However is would be desirable to see an increase in the number of Indian experts
  4. Then govt can rely entirely on local firms to deal with such issues
  5. Step: Commerce ministry is trying to build capacity to comprehensively track the trade restrictive measures taken by other countries, especially those that hurt India’s exports

 

Importance of non-issues at WTO and capacity building

  1. India has been advocating that certain issues, including labour and environment, must be kept out of the WTO’s purview
  2. Instead, they should be dealt with by the global bodies concerned such as the International Labour Organisation and the United Nations Framework Convention on Climate Change
  3. However, developed countries want that the WTO should address global trade’s new challenges including labour and environment

Non-trade issues at WTO, lack of legal experts worry India

  1. What? Developing nations, including India, are facing a double disadvantage at WTO’s (WTO) Dispute Settlement Body (DSB)
  2. Disadvantages: Lack of a sufficient pool of trade law experts to represent them effectively and also certain efforts to bring within ambit non-trade issues such as labour and environment
  3. Non-issues: Labour and environment issues would pose a great challenge for developing nations
  4. Why? Because very often these are conditions that add as restrictions in the freedom of trade particularly for developing countries

India-US fight over GATS Mode 4

  1. Context: US opposed India’s proposal named “Mode 4: Assessment of Barriers” at WTO
  2. What? It aimed at a comprehensive discussion on growing regulatory barriers in the movement of natural persons under Mode 4 of GATS
  3. Ground: That India is already pursuing a trade dispute on the same issue against Washington
  4. Many developing countries strongly supported India’s proposal because it is important to address this issue for their growing services sector

What is Mode 4 under GATS?

  1. Under the General Agreement on Trade in Services (GATS), services can be traded internationally in four different ways — known as the four modes
  2. Mode 4: Refers to the presence of persons of one WTO member in the territory of another for the purpose of providing a service
  3. It does not concern persons seeking access to the employment market in the host member
  4. Also, it does not affect measures regarding citizenship, residence or employment on a permanent basis

India takes on U.S. at WTO over visa rules

  1. News: India has filed a complaint to WTO against U.S over its measures raising fees on some applicants for temporary work visas, mostly involving tech sector
  2. India’s notification: The U.S. measures are not consistent with Washington’s commitments to accept services from other countries
  3. Context: Some Indians receive unfair treatment compared with Americans in U.S in providing similar services in sectors like computer services
  4. U.S. response: The U.S. visa program, which was recently updated on a bipartisan basis by Congress, is fully consistent with our WTO obligations
  5. Indian move is unusual at the WTO, where most disputes involve goods, tariffs and restrictions, not services

Learn about Dumping

  1. Dumping is an unfair trade practice which occurs when goods are exported at a price lower than their normal value
  2. Generally, this results in goods being sold in another country for less than their price in the original market or at less than production costs
  3. It seeks to distort international trade and cause injury to the domestic manufacturers of the goods in the importing country
  4. To prevent this, a non-tariff barrier may be implemented, called an anti-dumping duty

India studying impact of market economy status for China

  1. Context: There are chances of China being granted Market Economy Status under WTO norms
  2. Background: The 2001 agreement (Protocol on the accession of China to the WTO), according to which the WTO member nations could ignore selling price and production costs in China for 15 years
  3. Impact: WTO-member countries would have to consider China as a ‘market economy’ while adjudicating anti-dumping cases
  4. Challenge: India has extensively used anti-dumping provisions to offset the losses caused to the local manufacturers due to dumping
  5. It will severely limit India’s ability to resort to anti-dumping
  6. Criticism: There is a significant govt influence in China that in turn causes distortions in international trade

Learn more about Trade Facilitation Agreement (TFA)?

  1. Background: In Dec 2013, WTO members concluded negotiations on a TFA at the Bali Ministerial Conference, as part of a wider “Bali Package”
  2. Aim: A trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries
  3. Deadline: to sign the agreement is July 31 and the deal has to come into force fully by 2015
  4. Expert opinion: Deal could add $1 trillion to global GDP and also can generate 21 million jobs by slashing red tape and streamlining customs
  5. Developing countries’ concern: WTO to discuss and allay concern on food subsidy and stockholding, which is a lifeline for lakhs of BPL people

Cabinet approves Trade Facilitation Agreement (TFA)

  1. Context: Cabinet has approved, Proposal for Notification of Commitments under the TFA of WTO
  2. Relevance: Ratification and acceptance of the Instrument of Acceptance of Protocol of TFA to the WTO Secretariat and constitution of the National Committee on Trade Facilitation (NCTF)
  3. TFA provisions: Expediting the movement, release and clearance of goods, including goods in transit
  4. Measures for: effective cooperation between customs and appropriate authorities on trade facilitation and customs compliance issues
  5. These objectives are in consonance with India’s “Ease of Doing Business” initiative
  6. Condition: TFA shall enter into force for the notified members upon acceptance by two-third WTO Members
  7. Way ahead: A NCTF would be set up under Department of Commerce
PIB

India to pitch for TFA in services

India will pitch for a trade facilitation agreement (TFA) in services at the WTO has huge potential and it contributes significantly to the country’s economy.

  1. TFA in services means liberalised visa regime such as multiple entry visas, visa-free travel for foreign tourists and long term visas for business community.
  2. In RCEP negotiations, India wants a comprehensive agreement in goods, services and investments.
  3. India is very strong in the services area as the sector contributes over 50 per cent in the country’s economic growth.
  4. To boost services exports, the ministry is already working on some reform measures in sectors including education and legal.

India to counter ‘non-issues’ at WTO talks

In Regional Comprehensive Economic Partnership (RCEP) talks, India will state that the focus should be on expeditiously concluding discussions on the goods, services and investment chapters of pact.

  1. The government is firming up a strategy to prevent ‘attempts’ by rich nations to introduce ‘new pro-corporate issues’.
  2. Such as global value chains, digital economy, labour and climate-related trade into the WTO deliberations and negotiations on mega free trade agreements.
  3. The outstanding issues include an effective ‘Special Safeguard Mechanism’ and a permanent solution for the issue of public stockholding for food security purposes.
  4. India will state at the WTO that any country pitching for the introduction the ‘new issues’ will first have to ensure that they meet two criteria.
  • To establish the relevance of these issues in the context of trade.
  • To ensure that there is a consensus among all 162 WTO member countries in taking up such an agenda.

India seeks to lead developing nations at WTO

A “collaborative approach” with African countries would be central to India’s future strategy at the WTO.

  1. India plans to play a leadership role at the WTO negotiations to boost the trade prospects of the developing and poor nations.
  2. To forge strong alliances on the “development agenda” of the WTO’s ongoing Doha Round of talks.
  3. Government will hold a series of “strategy workshops” of stakeholders, inter-ministerial and Centre-state discussions in addition to summits with African countries.
  4. To take a deep dive on the outstanding issues [of the ongoing Doha Development Round talks of the WTO] and come up with an initial game plan.

Lets know about Export competition

  1. According to WTO, it refers to elimination of agricultural export subsidies, new rules for export credits, international food aid and exporting state trading enterprises.
  2. WTO wants to reform programme on export competition.
  3. It will include the commitments to reduce subsidized export quantities, and the amount of money spent subsidizing exports.

WTO discussions deadlocked

  1. India has said that an instrument similar to SSM is already available to mostly the developed countries for over 2 decades.
  2. The draft text says that work on a SSM shall be pursued taking account of proposals by the WTO Member countries.
  3. It shall be in the broader context of agricultural market access.
  4. The text also says that the WTO’s General Council shall regularly review progress on SSM negotiations.
  5. The text mentions that the negotiations on the issue of public stockholding for food security purposes shall continue to be pursued as a priority.

India opposes rich nations’ attempts to cherry-pick farm issues

Against bid to link deal on farm export subsidies to Special Safeguard Mechanism.

  1. India has called for a balanced outcome in negotiations on agriculture including an agreement on Special Safeguard Mechanism (SSM).
  2. A simplified proposal on SSM had been submitted and asked WTO Chair on Agriculture negotiations to speedily work on this.
  3. India has already rejected claims by rich countries that there is a broad consensus for a deal during the WTO’s meet on getting rid of farm export subsidies.
  4. India had sought additional flexibility for developing countries so that they can provide such more subsidies on some products, while reducing subsidies on other products.

Let’s know about Special Safeguard Mechanism (SSM)?

  1. It’s a trade remedy that allow the developing countries to temporarily hike duties to counter the import surge and price falls in farm products.
  2. Higher safeguards duties can be triggered automatically when import volumes rise above a certain level, or if prices fall below a certain level.
  3. It is not necessary to demonstrate that serious injury is being caused to the domestic industry.

No bargain on protection of poor farmers’ interests: India

India has made it clear that protection of poor farmers’ interests and its food security programmes are not up for any bargain at the negotiations.

  1. India will not compromise on the need for a permanent solution, for the issue of public stockholding for food security purposes.
  2. India wants the WTO members to take up on a priority basis the issue of a Special Safeguard Mechanism (SSM).
  3. Brazil, being a leading agricultural exporter, wanted more market access for its farm items in return for supporting the SSM proposal, a demand that did not go down well with India.
  4. The developed countries, citing the slow progress in Doha Round negotiations.
  5. They want the Round to be brought to close or expand the ambit of the negotiations by including ‘new’ issues of their interest.

What are the benefits of being classified as ‘developing country’ at WTO?

  1. The WTO mandates special and differential treatment (S&DT) to developing countries.
  2. It includes giving longer time periods for implementing WTO agreements and commitments in addition to provisions safeguarding their trade interests.
  3. WTO does not define what constitutes a ‘developing’ or ‘developed’ country, and allows its members to decide for themselves.
  4. However, WTO recognises least developed countries as designated by the UN.

India rejects rich world’s attempt to create divisions

  1. India will oppose the developed world’s attempts to ask developing countries with relatively higher growth to commit to greater and faster market access.
  2. The world’s rich countries wants ‘differentiated’ treatment of developing countries.
  3. The countries with higher growth such as India and China can be categorised differently from the other developing countries.
  4. India’s WTO agenda also includes that the developed countries substantially reduce their trade distorting subsidies.

India rejects ‘artificial deadlines’ for WTO deal

Opposes rich nations’ attempts to introduce ‘new’ issues.

  1. India has said it will neither agree to ‘artificial deadlines’ to conclude the WTO’s Doha Round negotiations.
  2. Aimed at liberalising global trade, nor concur with rich nations’ attempts to expand the ambit of the talks by introducing “new” issues without completely fulfilling the Round’s ‘development’ dimension.
  3. The Doha Round talks had begun in 2001 and has since missed several deadlines for concluding it.
  4. Due to persisting differences between the developed and developing world on a host of issues related to trade liberalisation and granting market opening commitments.

The ‘new’ issues pertain to labour practices, environmental standards, global value chains, e-commerce, competition and investment provisions, transparency in government procurement.

What is Trade Facilitation Agreement?

  1. It is a trade protocol aiming for expeditiously moving goods across borders inspired by the best practices from around the world.
  2. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation.
  3. The Agreement is expected to reduce total trade costs by more than 14% for low-income countries and more than 13% for upper middle-income countries by streamlining the flow of trade across borders.
  4. The TFA will enter into force once two-thirds of members have completed their domestic ratification process.

India may ratify WTO trade facilitation pact

India is likely to ratify the WTO’s Trade Facilitation Agreement(TFA), aimed at easing customs rules to expedite trade flows.

  1. But, India might not not use all available flexibilities in the TFA to determine the timing of implementation of various commitments.
  2. It is part of the govt’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report,
  3. The items which are still unresolved include finding a permanent solution to the issue of public stockholding for food security purposes as well as measures to protect poor farmers from sudden import surges of farm products.

At WTO talks, India to oppose bid at dilution

At Nairobi meet, New Delhi will resist efforts to create divisions among developing nations.

  1. India is likely to oppose efforts by rich countries to dilute ‘development’ dimension of the Doha Round negotiations, which are aimed at reaching an agreement to liberalise global trade.
  2. Some developed countries attempted to categorise nations such as India (now ‘developing’) as ‘emerging economies’.
  3. By making “unsubstantiated” allegations that such ‘emerging economies’ were cornering the benefits meant for developing countries.
  4. Members can apply the principle of ‘self-election’ and themselves decide if they are to be labelled as ‘developing’ countries.
  5. Significantly, there are attempts by the rich countries to “redefine developmental aspects” of the Doha Development Agenda negotiations.

Let’s know more about WTO?

  1. The World Trade Organization is the only global international organization dealing with the rules of trade between nations.
  2. It was signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade.
  3. The goal is to help producers of goods and services, exporters, and importers conduct their business.
  4. It deals with regulation of trade by providing a framework for negotiating trade agreements and a dispute resolution process.

WTO lowers world trade growth estimate

World Trade Organisation (WTO) revising its projections for growth in world trade downwards.


 

  1. Earlier, WTO had predicted a subdued recovery in world trade growth was estimated to improve from 2.8 per cent in 2014 to 3.3 per cent in 2015.
  2. Commerce Ministry had an ambitious target of double India’s exports in goods and services from $465 billion to $900 billion over five years.
  3. There certainly can be a case for short-term ameliorative measures.
  4. Some of the major export sectors are employment-intensive and if they suffer, this will have a bit of a domino effect.
  5. Trade policy says, need to move away from subsidies and addressing challenges relating to procedural hurdles, transaction costs and infrastructure deficits.

India wants answers on EU Ban of GVK Drugs

  1. Nirmala Sitaraman said it was improper for EU to take a unilateral step in banning the drugs from India.
  2. Our trader talks on EU-India FTA are in limbo because of this impasse.
  3. But EU has maintained that the issue stems from Hyderabad-based GVK providing them inaccurate data.
  4. India might also roll out the National Intellectual Property Rights (IPR) law. Cabinet talks going on.

WTO strikes ‘landmark’ IT trade deal


 

  1. The deal will update the 18-year-old IT Agreement and add 200 products to the zero tariff list.
  2. The deal will cut tariffs on $1.3 trillion worth of technology products besides creating jobs and adding to the global GDP.
  3. The benefitting products range from advanced computer chips to GPS devices, medical equipment, printer cartridges and video-game consoles
  4. This deal alongwith the Trade Facilitation Agreement from Doha Round will boost the global liberalized trade system.
BBC

US may force India to slash farm subsidies

US has declared special and differential treatment (S&DT) a “threshold” issue, implying that all developing countries will not be treated on a par with regard to farm and fisheries subsidy programmes.

What this means is that Washington wants China and India to be treated separate from other developing countries—regardless of their hundreds of millions of poor farmers and fishermen—with regard to commitments on farm and fisheries subsidies in the Doha Development Agenda (DDA) trade negotiations.


[op-ed snap] India’s upcoming WTO challenges

  1. India and the US are on the cusp of cementing relations on several fronts but not on the ground of trade agreements @ WTO.
  2. Washington has pointed a finger at the continued barriers, largely in 2 sectors – agriculture and intellectual property protection – in India.
  3. US raised 3 sets of concerns about Indian agriculture policies – India’s “unpredictable” tariff policies, India’s unscientific and unjustifiable import barriers on agricultural products & India’s farm subsidies.
  4. US has been on the path of projecting China and India as the untold-subsidy-villains.
  5. Will the Modi government stand up for its poor farmers? That is the test it would face at Nairobi.

India loses poultry case against United States at WTO

  1. WTO’s Dispute Settlement Board (DSB) ruled that India’s ban on import of poultry meat, eggs and live pigs from US is inconsistent with the international norms.
  2. These poultry products were banned as a precautionary measure to prevent outbreaks of Avian Influenza and bird flu fears.
  3. With this WTO ruling, US which is one of the world’s largest exporters of chicken meat will be able to export their poultry products to Indian market without any trade barriers.

India challenges WTO’s reversal on Poultry ban from US

  1. Back in 2007, India had invoked the SPS (Sanitary and Phytosanitary Measures) agreement clause of WTO and banned US poultry import.
  2. SPS is a treaty under WTO relating to food safety, animal and plant health (phytosanitation) wrt imported pests and diseases.
  3. US challenged that and won against India. India will now move to the DSB (Dispute Settlement Board) of the WTO.


:( We are working on most probable questions. Do check back this section.







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