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GS Paper: GS2-20.Important International institutions, agencies and fora- their structure, mandate.

  • China’s disputed ‘Developing’ Country Status at WTO

    China’s status as a ‘developing country’ at the World Trade Organization (WTO) has become a contentious issue with a number of countries raising concerns.

    Defining a country’s ‘Development’

    • There are no WTO definitions of “developed” or “developing” countries.
    • Developing countries in the WTO are designated on the basis of self-selection although this is not necessarily automatically accepted in all WTO bodies.
    • The WTO however recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations.

    Benefits of ‘Developing Country’ tag

    • Special and differential treatment: Certain WTO agreements give developing countries special rights through ‘special and differential treatment’ (S&DT) provisions.
    • Preferential treatment: The classification also allows other countries to offer preferential treatment.
    • Longer timeframe for pacts: WTO can grant developing countries longer timeframes to implement the agreements and even commitments to raise trading opportunities for such countries.

    Issues with Chinese ‘Developing Country’ status

    • China has become an upper-middle-income country according to the World Bank.
    • It involves in unfair trade practices such as preferential treatment for state enterprises, data restrictions and inadequate enforcement of intellectual property rights.

    How has China responded?

    • China has consistently maintained that it is the “world’s largest developing economy”.
    • It has recently indicated that it may be willing to forego many benefits of being a developing country.

    What are the benefits of LDC classification?

    • The WTO recognizes LDCs relying on a classification by the UN based on criteria that is reviewed every three years. LDCs are often exempted from certain provisions of WTO pacts.
    • Bangladesh, currently classified as an LDC, receives zero duty, zero quota access for almost all exports to the EU.
    • It is, however, set to graduate from the LDC status in 2026 as its per capita GDP has risen sharply surpassing that of India in FY21.

    Try this question from CS Mains 2018:

     

    Q.What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India?

     

    Reference: https://www.civilsdaily.com/sansad-tv-perspective-wto-reforms/

    (Aspirants need not write whole answers. Just a quick summary with keywords would suffice.)

     

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  • What is the Iran Nuclear Deal?

    As Iran has refused to hold direct talks with the U.S., European officials will shuttle between the Iranian and American delegations, exchanging talking points and seeking common ground over the nuclear deal.

    Do you know how the enmity between Iran and the US came into reality?  We hope you have watched the Argo (2012) movie for sure!

    Context

    • After a gap of five months, Iran, Russia, China and the European countries resumed negotiations in Vienna to revive the 2015 nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA).
    • The 2015 JCPOA agreement sought to cut Iran off a possible path to a nuclear bomb in return for lifting of economic sanctions.

    What is JCPOA?

    • The Iran nuclear agreement, formally known as the JCPOA is a landmark accord reached between Iran and several world powers, including the United States, in July 2015.
    • Under its terms, Iran agreed to dismantle much of its nuclear program and open its facilities to more extensive international inspections in exchange for billions of dollars’ worth of sanctions relief.

    Expected outcomes of the deal

    • Curb on nuclear program: Proponents of the deal said that it would help prevent a revival of Iran’s nuclear weapons program.
    • Increasing regional engagement: It would thereby reduce the prospects for conflict between Iran and its regional rivals, including Israel and Saudi Arabia.

    Background of the JCPOA

    • Iran had previously agreed to forgo the development of nuclear weapons as a signatory to the Nuclear Nonproliferation Treaty, which has been in force since 1970.
    • However, after the overthrow of the Pahlavi dynasty in 1979, Iranian leaders secretly pursued this technology.
    • In 2007, U.S. intelligence analysts concluded that Iran halted its work on nuclear weapons in 2003 but continued to acquire nuclear technology and expertise.
    • Prior to the JCPOA, the P5+1 had been negotiating with Iran for years, offering its government various incentives to halt uranium enrichment.

    Issues with the deal

    (1) US withdrawal

    • The deal has been in jeopardy since President Donald Trump withdrew the US from it in 2018.
    • In retaliation for the US, Iran resumed some of its nuclear activities.

    (2) Iran’s insistence over sanctions removal

    • In 2021, President Joe Biden said the US will return to the deal if Iran comes back into compliance, though Iran’s leaders have insisted that Washington lift sanctions first.
    • Iran now has indicated that he will take a harder line than his predecessor in nuclear negotiations.

    Who are the participants?

    • The JCPOA, which went into effect in January 2016, imposes restrictions on Iran’s civilian nuclear enrichment program.
    • At the heart of negotiations with Iran were the five permanent members of the UN Security Council (China, France, Russia, the United Kingdom, and the United States) and Germany—collectively known as the P5+1.
    • The European Union also took part. Israel explicitly opposed the agreement, calling it too lenient.
    • Some Middle Eastern powers, such as Saudi Arabia, said they should have been consulted or included in the talks because they would be most affected by a nuclear-armed Iran.

    What did Iran agree to?

    • Nuclear restrictions: Iran agreed not to produce either the highly enriched uranium or the plutonium that could be used in a nuclear weapon.
    • Monitoring and verification:  Iran agreed to eventually implement a protocol that would allow inspectors from the International Atomic Energy Agency (IAEA), the United Nations’ nuclear watchdog.

    What did the other signatories agree to?

    • Sanctions relief: The EU, United Nations, and United States all committed to lifting their nuclear-related sanctions on Iran. However, many other U.S. sanctions on Iran, some dating back to the 1979 hostage crisis, remained in effect.
    • Weapons embargo: The parties agreed to lift an existing UN ban on Iran’s transfer of conventional weapons and ballistic missiles after five years if the IAEA certifies that Iran is only engaged in civilian nuclear activity.

    How has the deal affected Iran’s economy?

    • Prior to the JCPOA, Iran’s economy suffered years of recession, currency depreciation, and inflation, largely because of sanctions on its energy sector.
    • With the sanctions lifted, inflation slowed, exchange rates stabilized, and exports—especially of oil, agricultural goods, and luxury items­—skyrocketed as Iran regained trading partners, particularly in the EU.
    • After the JCPOA took effect, Iran began exporting more than 2.1 million barrels per day (approaching pre-2012 levels, when the oil sanctions were originally put in place).

     

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  • Iran invites UN nuclear body chief to Tehran for talks

    Iran has invited the head of the International Atomic Energy Agency (IAEA) for talks after the UN official expressed concern over a lack of contact with Iranian authorities.

    What is IAEA?

    • The IAEA is an international organization that seeks to promote the peaceful use of nuclear energy and to inhibit its use for any military purpose, including nuclear weapons.
    • As the preeminent nuclear watchdog under the UN, the IAEA is entrusted with the task of upholding the principles of the Nuclear Non-Proliferation Treaty (NPT) of 1970.
    • It was established as an autonomous organization on July 29, 1957, at the height of the Cold War between the U.S. and the Soviet Union.
    • Though established independently of the UN through its own international treaty, the agency reports to both the UN General Assembly and the UNSC.

    IAEA Missions

    The IAEA is generally described as having three main missions:

    • Peaceful uses: Promoting the peaceful uses of nuclear energy by its member states,
    • Safeguards: Implementing safeguards to verify that nuclear energy is not used for military purposes, and
    • Nuclear safety: Promoting high standards for nuclear safety

    What are its safeguards?

    • Safeguards are activities by which the IAEA can verify that a State is living up to its international commitments not to use nuclear programs for nuclear weapons purposes.
    • Safeguards are based on assessments of the correctness and completeness of a State’s declared nuclear material and nuclear-related activities.
    • Verification measures include on-site inspections, visits, and ongoing monitoring and evaluation.

    Basically, two sets of measures are carried out in accordance with the type of safeguards agreements in force with a State.

    1. Verifying state reports of declared nuclear material and activities.
    2. Verifying the non-diversion of declared nuclear material and providing assurances as to the absence of undeclared nuclear material and activities in a State.

    Try this question from CSP 2020:

    Q.In India, why are some nuclear reactors kept under “IAEA Safeguards” while others are not?

    (a) Some use Uranium and others use thorium.

    (b) Some use imported uranium and others use domestic supplies.

    (c) Some are operated by foreign enterprises and others are operated by domestic enterprises.

    (d) Some are State- owned and others are privately-owned.

     

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    Back2Basics: Nuclear Non-Proliferation Treaty (NPT)

    • The NPT is a landmark international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy.
    • The Treaty represents the only binding commitment in a multilateral treaty to the goal of disarmament by the nuclear-weapon States.
    • Opened for signature in 1968, the Treaty entered into force in 1970.
    • India is one of the only five countries that either did not sign the NPT or signed but withdrew, thus becoming part of a list that includes Pakistan, Israel, North Korea, and South Sudan.
    • India always considered the NPT as discriminatory and had refused to sign it.

     

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  • Russia breaks diplomatic ties with NATO

    Russia has decided that it would halt the activities of its diplomatic mission to NATO after it expelled eight Russian diplomats in a row over spying.

    Why such move?

    • NATO had set up a prohibitive regime for Russian diplomats in Brussels by banning them from its headquarters building.
    • Relations between Moscow and the West have been strained for years, but the immediate impetus for the Russian move was a spy scandal.
    • Military tensions have also escalated in recent years, including last spring when Russian troops massed along Ukraine’s border (probably for invasion).

    Significance of the move

    • The decision will end a post-Cold War experiment, never very successful, in building trust between Russia and the Western alliance.
    • It was established decades ago to contain the Soviet Union, which officials in Moscow accused of later encroaching on former Soviet territory.

    About North Atlantic Treaty Organization (NATO)

    • NATO is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949.
    • It sought to create a counterweight to Soviet armies stationed in Central and Eastern Europe after World War II.
    • Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
    • NATO has spread a web of partners, namely Egypt, Israel, Sweden, Austria, Switzerland and Finland.

    Why was it founded?

    Ans. Communist sweep in Europe post-WWII and rise of Soviet dominance

    • After World War II in 1945, Western Europe was economically exhausted and militarily weak, and newly powerful communist parties had arisen in France and Italy.
    • By contrast, the Soviet Union had emerged from the war with its armies dominating all the states of central and Eastern Europe.
    • By 1948 communists under Moscow’s sponsorship had consolidated their control of the governments of those countries and suppressed all non-communist political activity.
    • What became known as the Iron Curtain, a term popularized by Winston Churchill, had descended over central and Eastern Europe.

    Ideology of NATO

    • NATO ensures that the security of its European member countries is inseparably linked to that of its North American member countries.
    • It commits the Allies to democracy, individual liberty and the rule of law, as well as to the peaceful resolution of disputes.
    • It also provides a unique forum for dialogue and cooperation across the Atlantic.

    The Article 5

    • The heart of NATO is expressed in Article 5, in which the signatory members agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.

    Why in news now?

    • The relationship between NATO and Russia is at its lowest point since the end of the Cold War.
    • The NATO (rather US) sees their aggressive actions, not least against Ukraine, but also the significant military buildup and violations of important arms control agreements.
    • NATO suspended practical cooperation with Russia in 2014 after it annexed Ukraine’s Crimean Peninsula.

     

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  • India invited to become full-time IEA member

    International Energy Agency (IEA) has invited India, the world’s third-largest energy consumer, to become its full-time member.

    International Energy Agency (IEA)

    • The IEA is an autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.
    • Based in Paris, IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market.
    • In the decades since, its role has expanded to cover the entire global energy system, encompassing traditional energy sources such as oil, gas, and coal as well as cleaner and faster growing ones such as solar PV, wind power and biofuels.
    • It is best known for the publication of its annual World Energy Outlook.

    Role and responsibility

    • The Agency’s mandate has broadened to focus on providing analysis, data, policy recommendations and solutions to help countries ensure secure, affordable and sustainable energy for all.
    • In particular, it has focused on supporting global efforts to accelerate the clean energy transition and mitigate climate change.
    • The IEA has a broad role in promoting rational energy policies and multinational energy technology co-operation with a view to reaching net zero emissions.

    India and IEA

    • India, in March 2017, became an associate member of the Paris-based body which advises industrialised nations on energy policies.
    • Today the IEA acts as a policy adviser to its member states, as well as major emerging economies such as Brazil, China, India, Indonesia and South Africa to support energy security and advance the clean energy transition worldwide.

    Significance of the invitation

    • This proposal if accepted will require New Delhi to raise strategic oil reserves to 90 days requirement.
    • India is becoming increasingly influential in global energy trends.

    Try this MCQ:

    Q.The Global Energy Transition Index recently seen in news is released by:

    a) International Energy Agency (IEA)

    b) World Economic Forum (WEF)

    c) International Renewable Energy Agency (IRENA)

    d) International Solar Alliance

     

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  • NATO fires Russian Diplomats

    NATO has withdrew the accreditation of eight Russian officials to the military alliance in response to a rise in malign activities by Moscow.

    NATO

    • NATO is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949.
    • It sought to create a counterweight to Soviet armies stationed in Central and Eastern Europe after World War II.
    • Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
    • NATO has spread a web of partners, namely Egypt, Israel, Sweden, Austria, Switzerland and Finland.

    Why was it founded?

    Ans. Communist sweep in Europe post-WWII and rise of Soviet dominance

    • After World War II in 1945, Western Europe was economically exhausted and militarily weak, and newly powerful communist parties had arisen in France and Italy.
    • By contrast, the Soviet Union had emerged from the war with its armies dominating all the states of central and Eastern Europe.
    • By 1948 communists under Moscow’s sponsorship had consolidated their control of the governments of those countries and suppressed all non-communist political activity.
    • What became known as the Iron Curtain, a term popularized by Winston Churchill, had descended over central and Eastern Europe.

    Ideology of NATO

    • The NATO ensures that the security of its European member countries is inseparably linked to that of its North American member countries.
    • It commits the Allies to democracy, individual liberty and the rule of law, as well as to peaceful resolution of disputes.
    • It also provides a unique forum for dialogue and cooperation across the Atlantic.

    The Article 5

    • The heart of NATO is expressed in Article 5, in which the signatory members agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.

    Why in news now?

    • The relationship between NATO and Russia is at its lowest point since the end of the Cold War.
    • The NATO (rather US) sees their aggressive actions, not least against Ukraine, but also the significant military buildup and violations of important arms control agreements.
    • NATO suspended practical cooperation with Russia in 2014 after it annexed Ukraine’s Crimean Peninsula.

     

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  • What is Agreement on Agriculture (AoA)?

    The Agreement on Agriculture at the WTO is riddled with deep imbalances, which favour the developed countries and have tilted the rules against many developing countries, a Union Minister has said.

    Agreement on Agriculture

    • The AoA is an international treaty of the World Trade Organization.
    • 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.

    Three pillars of AoA

    The Agreement on Agriculture consists of three pillars—domestic support, market access, and export subsidies.

    (1) Domestic support

    • AoA divides domestic support into two categories: trade-distorting and non-trade-distorting (or minimally trade-distorting).
    • It the classification of subsidies by “boxes” depending on consequences of production and trade:
    1. Amber (most directly linked to production levels)
    2. Blue (production-limiting programs that still distort trade)
    3. Green (minimal distortion)

    (2) Market access

    • Market access refers to the reduction of tariff (or non-tariff) barriers to trade by WTO members.
    • The 1995 AoA consists of tariff reductions of:
    1. 36% average reduction – developed countries – with a minimum of 15% per-tariff line reduction in next six years.
    2. 24% average reduction – developing countries – with a minimum of 10% per-tariff line reduction in next ten years.
    • Least developed countries (LDCs) were exempt from tariff reductions, but they either had to convert non-tariff barriers to tariffs—a process called tariffication—or “bind” their tariffs, creating a ceiling that could not be increased in future.

    (3) Export subsidies

    • The AoA required developed countries to reduce export subsidies by at least 36% (by value) or by 21% (by volume) over six years.
    • For developing countries, the agreement required cuts were 24% (by value) and 14% (by volume) over ten years.

    Criticism of AoA

    • AoA has been criticized for reducing tariff protections for small farmers, a key source of income in developing countries, while simultaneously allowing rich countries to continue subsidizing agriculture at home.
    • In 2017 India and China jointly submitted a proposal to the WTO calling for the elimination – by developed countries – of the most trade-distorting form of farm subsidies,
    • They are known in WTO parlance as Aggregate Measurement of Support (AMS) or ‘Amber Box’ support as a prerequisite for consideration of other reforms in domestic support negotiations.

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  • AUKUS Partnership for Indo-Pacific

    The Biden administration has announced a new trilateral security partnership for the Indo-Pacific, between Australia, the U.K., and the U.S. (AUKUS).

    What is AUKUS?

    • AUKUS, as the partnership is being called, will strive over the next 18 months to equip Australia with nuclear propulsion technology.
    • As part of this, Australia will acquire nuclear-powered submarines with help from the UK and the US.
    • It will also involve a new architecture of meetings and engagements between the three countries, as well as cooperation across emerging technologies (applied AI, quantum technologies and undersea capabilities).
    • Australia’s nuclear-powered submarines, when they deploy, will be armed with conventional weapons only and not nuclear weapons.

    Why such an alliance?

    • Tensions have been high between Australia and an increasingly assertive China, its largest trade partner.
    • Australia banned Chinese telecom giant Huawei in 2108 and its PM called for an investigation into the origins of COVID-19 last year.
    • China retaliated by imposing tariffs on or capping Australian exports.

    Not to substitute Quad or others

    • This alliance does not and will not supersede or outrank existing arrangements in the Indo-Pacific region such as the Quad, which the US and Australia form with India and Japan, and ASEAN.
    • AUKUS will complement these groups and others.

    Significance

    • There has been only one other time that the US has shared as “extremely sensitive” submarine propulsion technology — more than 60 years ago, back in 1958, with Great Britain.
    • The US is working to move past the 20-year war in Afghanistan and the chaotic U.S. exit from Kabul.
    • The Biden Administration has put countering China at the center of his economic and national security efforts, describing it as the biggest challenge of this era.

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  • India set to take over as President of the UNSC

    India will take over the Presidency of the UN Security Council on August 1 and is set to host signature events in three major areas of maritime security, peacekeeping, and counterterrorism during the month.

    Key agendas on the table

    During its Presidency, India will be organizing high-level signature events in three major areas:

    • Maritime security
    • Peacekeeping and
    • Counterterrorism

    About United Nations Security Council

    • The UNSC is one of the six principal organs of the United Nations and is charged with the maintenance of international peace and security.
    • Its powers include the establishment of peacekeeping operations, the establishment of international sanctions, and the authorization of military action through Security Council resolutions.
    • It is the only UN body with the authority to issue binding resolutions to member states.
    • The Security Council consists of fifteen members. Russia, the United Kingdom, France, China, and the United States—serve as the body’s five permanent members (P5).
    • These permanent members can veto any substantive Security Council resolution, including those on the admission of new member states or candidates for Secretary-General.
    • The Security Council also has 10 non-permanent members, elected on a regional basis to serve two-year terms. The body’s presidency rotates monthly among its members.

    Issues with UNSC

    (1) Non-representative

    • UNSC in its current form is not representative of the developing world and global needs — with the primacy of policy being a political tool in hands of P5.
    • By 1992, India, Brazil, Germany, and Japan (referred as G4) had put up their claims and logic for demanding inclusion as permanent members.
    • India has been part of UN since its inception and has contributed maximum peacekeepers to UN so far, has a strong case.
    • Brazil is the largest country in Latin America (unrepresented continent) and fifth-largest in the world. Japan and Germany are one of the largest financial donors to UN.

    (2) Rivalry with G4

    • The pitch for reforms of G4 was lowered by their regional rivals like Italy, Pakistan, Mexico and Egypt.
    • They started formulation of another interest group, known to be “Uniting for Consensus” opposing G4 becoming permanent members with veto power.

    (3) Rigid framework

    • Reforms in the UNSC also require an amendment to the UN charter, in accordance with Article 108.
    • This highlights that any reform of the Security Council not only requires the support of at least two-thirds of UN member states but also all the permanent members.

    (4) Veto power

    • The stance of P5 members to expansion has been varying as per their national interest, like most P5 members agree to Indian inclusion, except China.
    • It becomes obvious that even if one member of P5 doesn’t agree to any reform, the UNSC cannot be reformed.
    • There have been many proposals since its inception from totally abolishing veto power to selectively using it for vital national security issues.

    (5) No consensus

    • It has been seen in past that the UNSC, in some of the major global security issues, could not arrive at a consensus and interventions that happened by countries mainly from P5 without UNSC resolution.
    • US entry in Iraq war or Warsaw Pact war in Afghanistan are few cases in point.
    • The UNSC has thus become an organization, which can pass strong resolutions against weak countries, weak resolutions against strong countries and no resolution against P5 countries.

    Suggested reforms

    • Expansion: Besides the existing P5 members, an expansion of UNSC from five to 10 permanent members, with the addition of G4 and South Africa. This will provide equitable regional representation besides balancing the developing and developed world to meet the aspirations of humanity.
    • Abolition of veto: The expansion of P5 without veto power makes very little impact on the problems, because of which the reforms are required. Ideally the veto power should be abolished.

    Will UNSC reforms ever happen?

    • Under the given charter, articles and structures, there is very little hope for UNSC reforms in near future.
    • The lack of reforms can push the credibility crisis of UN to a degree that it becomes unsustainable for it to function, or incidences of side-lining the UN increase manifold.
    • If the UNSC does not appoint new permanent members then its primacy may be challenged by some of the new emerging countries.
    • There is also a possibility that if UN doesn’t reform itself, it may lose relevance and alternate global and regional groupings may assume greater importance.
    • No P5 member is likely to compromise this power in its own national interest, which is generally prioritized before global interest, thus making the reformation process a mirage.

  • South China Sea Dispute

     

    Pentagon chief has said that Beijing’s expansive claims in the South China Sea have “no basis in international law”, taking aim at China’s growing assertiveness in the hotly contested waters.

    South China Sea Dispute

    • It is a dispute over territory and sovereignty over ocean areas, and the Paracels and the Spratlys – two island chains claimed in whole or in part by a number of countries.
    • China, Vietnam, the Philippines, Taiwan, Malaysia, and Brunei all have competing claims.
    • Alongside the fully-fledged islands, there are dozens of rocky outcrops, atolls, sandbanks, and reefs, such as the Scarborough Shoal.
    • China claims by far the largest portion of territory – an area defined by the “nine-dash line” which stretches hundreds of miles south and east from its most southerly province of Hainan.
    • Beijing says its right to the area goes back centuries to when the Paracel and Spratly island chains were regarded as integral parts of the Chinese nation, and in 1947 it issued a map detailing its claims.
    • It showed the two island groups falling entirely within its territory. Those claims are mirrored by Taiwan.

    Spat over Chinese claims

    • China has backed its expansive claims with island-building and naval patrols.
    • The US says it does not take sides in territorial disputes but has sent military ships and planes near disputed islands, calling them “freedom of navigation” operations to ensure access to key shipping and air routes.
    • Both sides have accused each other of “militarizing” the South China Sea.
    • There are fears that the area is becoming a flashpoint, with potentially serious global consequences.