27-02-2024 CARE mains practice

Topic- India and WTO:

Introduction:

India urged the World Trade Organisation (WTO) to find a permanent solution to the long-pending public food stock issue, as it is important for achieving the sustainable development goal of zero hunger by 2030 while ensuring food security.

Body :

• Background
• Issue of food subsidy
• Peace Clause
• Zero Hunger -SDG 2
• India’s position
• WTO negotiations on agriculture

Conclusion :                                                                                                                                                                                                                                       

The development agenda would remain incomplete without a permanent solution on public stockholding for food security purposes, as finding a permanent solution on public stockholding was directly related to achieving the sustainable development goal of zero hunger by 2030. Hence, India must engage in meaningful negotiations to arrive at permanent solution to the issue.

 

UPSC Syllabus India and WTO:

What are the direct and indirect subsidies provided to farm sector in India? Discuss the issues raised by the World Trade Organization (WTO) in relation to agricultural subsidies. (UPSC Main 2023)

Introduction

India urged the World Trade Organisation (WTO) to find a permanent solution to the long-pending public food stock issue, as it is important for achieving the sustainable development goal of zero hunger by 2030 while ensuring food security.

Body Status : 

Background

• The World Trade Organization is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade.
• Trade ministers conference, is the highest decision-making body of the multilateral trading organisation.
• The four-day 13th WTO Ministerial Conference referred as MC13 commenced recently in Abu Dhabi

Issue of food subsidy

• Under the global trade norms, a WTO member’s food subsidy bill should not breach the limit of 10 per cent of the value of production based on the reference price of 1986-88.
• Apprehending that full implementation of the food security programme may result in breach of the WTO cap, India has been seeking amendments in the formula to calculate the food subsidy cap.

Peace Clause

• As an interim measure, the WTO members at the Bali ministerial meeting in December 2013 had agreed to put in place a mechanism popularly called the Peace Clause and committed to negotiating an agreement for permanent solution at the 11th ministerial meeting at Buenos Aires.
• Under the Peace Clause, WTO members agreed to refrain from challenging any breach in the prescribed ceiling by a developing nation at the dispute settlement forum of the WTO.
• This clause will be there till a permanent solution is found to the food stockpiling issue.

Zero Hunger- SDG 2

• Zero Hunger is one of the United Nations Sustainable Development Goals (SDGs)
• It is defined as the objective to ensure that everyone has access to sufficient, safe, and nutritious food to meet their dietary needs and preferences.
• It also aims to ensure that all people have the ability to acquire the food they need, without compromising their economic, social, and environmental well-being.

India’s Position

• India has invoked the peace clause in 2018-19 (13 per cent) and 2019-20 (11 per cent) as it breached the subsidy cap for rice.
• India seeks the removal of ‘additional Final Bound Total Aggregate Measurement of Support (FBTAMS) entitlements’. These are fixed additional allowances over the ‘de minimis limits’ under the rules of the WTO Agreement on Agriculture (AoA).
• In trade parlance, ‘de minimis limits’ are the minimal amount of domestic support that is allowed a country even though it distorts global prices. These have been set at 5% of the value of production for developed countries and 10% for developing nations.
• Farmers unions in India are seeking to widen the scope of government procurement and also provide a legal guarantee for minimum support prices.

WTO Negotiations on Agriculture

• The seven negotiating areas under agriculture are domestic support, market access, export competition, export restrictions, cotton, special safeguard mechanism, public stockholding for food security purposes and transparency.

Conclusion

The development agenda would remain incomplete without a permanent solution on public stockholding for food security purposes, as finding a permanent solution on public stockholding was directly related to achieving the sustainable development goal of zero hunger by 2030. Hence, India must engage in meaningful negotiations to arrive at permanent solution to the issue.

Topic- International Organisations :

Introduction

European Union plan to impose tariffs on high-carbon imports could hurt developing countries in Asia but is unlikely to lead to big reductions in greenhouse gas emissions, the Asian Development Bank (ADB) said in a report published recently.

Body

• About European Union
• Carbon Border Adjustment Mechanism (CBAM)
• About Asian Development bank
• ADB Report
• Position of India and China

Conclusion

Carbon Border Adjustment Mechanism (CBAM) as announced by European Union in its current form is a non-trade barrier and India has already challenged it before the World Trade Organization under the special and differential treatment provisions. India needs to formulate its own carbon taxation measures that align with the principles of the Paris Agreement while simultaneously safeguarding its industries’ interests.

 

UPSC Syllabus International Organisations :

 

Why was this question asked?

‘Clean energy is the order of the day.’ Describe briefly India’s changing policy towards climate change in various international fora in the context of geopolitics.

(UPSC Main 2022)

Introduction:
European Union plan to impose tariffs on high-carbon imports could hurt developing countries in Asia but is unlikely to lead to big reductions in greenhouse gas emissions, the Asian Development Bank (ADB) said in a report published recently.

Body Status

About European Union

• The European Union (EU) is a political and economic union of 27 member states that are located primarily in Europe.
• The EU was established, along with its citizenship, when the Maastricht Treatycame into force in 1993.

Carbon Border Adjustment Mechanism (CBAM)

• It is part of the “Fit for 55 in 2030 package”, which is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels in line with the European Climate Law.
• The CBAM will apply to imports of cement, iron and steel, aluminium, fertilizers, electricity and hydrogen from countries that have less stringent climate policies than the EU.
• The Carbon Border Adjustment Mechanism (CBAM) was introduced by European Union to address concerns that the outsourcing of manufacturing had put large parts of the EU’s supply chain beyond the reach of its emissions trading scheme (ETS), a situation described as “carbon leakage”.

About Asian Development bank

• The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in Manila, Philippines.
• The bank also maintains 31 field offices around the world to promote social and economic development in Asia.
• Starting with 31 members at its establishment, ADB now has 68 members.

ADB Report

• ADB said CBAM was expected to cut Asian exports to the EU, particularly from western and southwestern Asia, with steel from India also likely to take a hit.

• But any small reduction in emissions would quickly be offset by the continuing increase in carbon-intensive production throughout Asia, and mechanisms to share emission reduction technology would be more effective, it said.
• CBAM could raise around 14 billion euros ($15.2 billion) in revenue by 2030, and the proceeds should be used to provide climate finance for developing countries to decarbonise manufacturing, as per experts in ADB.
• While CBAM serves as a tariff on foreign producers, it will also raise the cost of raw materials such as steel and fertiliser for downstream EU manufacturers, and could even give them an incentive to relocate more production capacity overseas, including Asia, the ADB report warned.

Position of India and China

• India has challenged the European Union’s Carbon Border Tax before the World Trade Organization under the special and differential treatment provisions.
• The CBAM could increase the costs and reduce the competitiveness of Indian exports to the EU, especially in sectors like steel and aluminum, which account for a large share of India’s trade with the EU.
• It places a carbon charge on companies from countries that did not primarily cause climate change.
• India has already discussed the possibility of imposing export taxes on CBAM-covered products sold to Europe, and China is expanding its ETS to cover exporting sectors like steel.
• Both countries have been critical of CBAM, with China warning Europe not to use climate as an excuse to engage in trade protectionism.
• CBAM is criticized as a non-tariff barrier that undermines zero duty FTAs.

Conclusion

Carbon Border Adjustment Mechanism (CBAM) as announced by European Union in its current form is a non-trade barrier and India has already challenged it before the World Trade Organization under the special and differential treatment provisions. India needs to formulate its own carbon taxation measures that align with the principles of the Paris Agreement while simultaneously safeguarding its industries’ interests.