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Created on Friday, 26 May 2017 16:14
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(Image courtesy: IMF)
Is the Trump Administration merely flexing muscles against free world trade to extract concessions from trading partners? Will Mr. Donald Trump’s Presidential Executive Orders (PEOs) on trade culminate in strong protectionist measures, which would obviously invite retaliation and/or complaints from affected countries?
Concern over US President playing victim card is growing among its trading partners. “The return of isolationism has cast doubts over the future of international trade and multilateralism,” says European Commission in its White Paper on the Future of Europe released in March this year.
China has also expressed concern at a meeting convened by World Trade Organization (WTO) to discuss US trade policy review (TPR) report in March this year.
As put by China, “The recent campaign rhetoric of ‘pulling out of the WTO’ made by the U.S. President-elect Donald Trump has caused serious worries among WTO Members regarding the future of the multilateral trading system”.
The US, on the other hand, has repeatedly assailed China’s protectionism over the last few years.
Read more: Turn Protectionism into Launch Pad for New World Trade Order
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Created on Thursday, 06 October 2016 07:38
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“I do not want to criticize a neighbouring country but I submit that energy in Pakistan is spent in disputes and clamours instead of work. If she had done even one fourth of what India is doing she would have made sufficient progress.”
This ever-green truth about Pakistan articulated by late Jawaharlal Nehru on 13th July 1954 is more relevant today. It shows as pain & misery in every sphere of its relationship with its forbearing parent, India.
And a notable case of such contrived discord is bilateral trade, whose potential as deliverer of prosperity & peace in the region including Afghanistan has been sabotaged by Pakistan. India’s bilateral trade with Afghanistan is stunted by Pak’s denial of transit for Indo-Afghan bilateral flow of trade through its territory.
Afghan Pakistan Transit Trade Agreement (APTTA) does not permit India to transit goods through Pakistan for export to Afghanistan, according to WTO Secretariat’s Trade Policy Review Report on Pakistan issued during June 2015.
With Modi Government set to review grant of most-favoured nation (MFN) to Pakistan, it is first important to shatter a myth.
Certain top-notch institutions, TV channels and dailies have wrongly claimed that India granted MFN status to Pakistan in 1996 after formation of World Trade Organization (WTO). The fact is that India granted MFN to Pakistan decades earlier under General Agreement on Trade and Tariffs (GATT). The first MFN dispute between the two was in fact raked up by Pakistan in 1948! More on this issue later in this column.
Read more: India must stand up against Pakistan on MFN as it did in 1950s
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Created on Thursday, 07 July 2016 07:23
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(Edited Image Courtesy: WTO)
Brexit + Trump = Trexit? So went the headline in an American publication named ‘Orange Country Register’. Similar headlines splashed across the global media have put crystal ball into an amazing spin.
Analysts are visualizing the likely impact of globalization on Britain's exit from European Union (EU), if it is followed by victory of Donald Trump in the forthcoming US Presidential race. Mr. Trump’s vocal opposition to foreign labour and free trade is a daily staple and thus requires no elaboration.
What impact this flux would have on negotiations over different trade issues at World Trade Organisation (WTO) and regional or bilateral free trade agreements (FTAs)? What would be the fate of protracted talks on deals such as India-EU Broad-based Trade and Investment Agreement (BTIA)? Would Brexit give wings to the UK-India Joint Economic and Trade Committee (JETCO)?
As both Brexit and Trexit (B&T) symbolize xenophobia including dislike for non-migrant, temporary workers, they are bound to impact services trade. The probability of B&T checkmating already muted mobility of labour is very high. Such supply of manpower comes under ‘Mode 4’ of General Agreement on Trade in Services (GATS).
Read more: WTO Should Revisit GATS to Exorcise Brexit-Trexit Demon
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Created on Monday, 10 November 2014 19:17
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(Image Courtesy: WTO)
A few multilateral organizations have lately voiced their concerns over the unfavourable impact of mushrooming preferential trade agreements (PTAs) on global value chains (GVCs).
Such concerns, coupled with independent studies on dubious impact of free trade agreements (FTAs)/regional trade agreements (RTAs), should lead to a decisive study on cumulative effect of 330 such pacts on the global trade. The suggested study should be undertaken by World Trade Organization (WTO) and later transformed into an important agenda for rebirth of free and fair global trade.
Any analysts of trade distortions would wonder why WTO has been muted and ambivalent in raising relevant issues about the adverse effects of all restrictive types of trade that can be collectively referred to as PTAs, for the sake of simplicity.
Before posing issues that need to be answered in the PTAs versus multilateral trade discourse, hear the latest concerns raised by two multilateral institutions.
Addressing WTO Seminar on Cross-Cutting Issues in Regional Trade Agreements held on 25th September, WTO Director General Roberto Azevêdo observed: “there are many big issues which can only be tackled in an efficient manner in the multilateral context through the WTO. Trade Facilitation was negotiated successfully in the WTO because it makes no economic sense to cut red tape or simplify trade procedures at the border for one or two countries — if do it for one country, in practical terms you do it for everyone.”
He stated: “RTAs do not — and probably cannot — fully address the gains from trade that can be obtained through global value chains. Indeed, the strict, product specific rules of origin that often accompany RTAs may actually be detrimental to value chains and therefore exclusionary for some. The smaller the country, the smaller the company, the smaller the trader, the bigger the likelihood is that they will be excluded.”
Read more: WTO should take decisive call on adverse effect of PTAs on global economy
