Indian Economy for IAS by Pratik Gupta

WORLD TRADE ORGANISATION Champagne, Tequila or Roquefort, that are

only authentic if they come from that
WHY DOHA IS NOT WORKING? region. Inventors must reveal the country
of origin for any genetic material used.
Its goal was to finish up by January 2005, but the 6. Trade and environment - Coordinate
deadline was then pushed back to 2006. The talks trade rules with other agreements to
were finally suspended in June 2006. That's because protect natural resources in developing
the United States and the European Union refused countries.
to reduce agricultural subsidies. 7. Trade facilitation - Clarify and improve
custom fees, documentation, and
Why Doha is an ambitious round? regulations. That will cut bureaucracy and
• First, all WTO members (almost every corruption in customs procedures. That
country in the world) participated. became an important feature of the Trans-
• Second, decisions must be settled by Pacific Partnership
consensus, as opposed to majority rule. 8. Special and differential treatment - Give
That means every country must sign off. special treatment to help developing
• Third, there are no piecemeal sub- countries. That includes longer time
agreements. That means there is either an periods for implementing agreements. It
entire agreement or none at all. In other requires that all WTO countries safeguard
words, unless every country agrees with the trade interests of developing
the whole deal, it's off. countries. It also provides financial
support to developing countries to build
In total Doha consist of 21 main points but that can the infrastructure needed to handle
be classified into Agriculture, NAMA, Services, disputes and implement technical
Rules, IPR, Trade and Investment, Trade standards.
Facilitation, S and D Treatment, Dispute Settlement 9. Dispute settlement - Install
and E-Commerce. recommendations to better settle trade
disputes.
Broadly: 10. E-commerce - Countries won't impose
1. Agriculture - Reduce subsidies to 2.5% of customs duties or taxes on internet
the value of production for developed products or services.
countries. That would only be 6.7% for NAIROBI ROUND OF NEGOTIATION
developing countries. Reduce tariffs on
food imports. End subsidies for exports. The WTO's Tenth Ministerial Conference was held
2. Non-agricultural market access (NAMA) - in Nairobi, Kenya, from 15 to 19 December 2015,
Reduce tariffs for non-food imports. the first such meeting hosted by an African nation.
3. Services - Clarify rules and regulations on Major decisions taken at WTO, 10th round of
foreign-provided services. Developed negotiations:
countries want to export financial services, 1. Elimination of export subsidies: A number
telecoms, energy services, express of countries are currently using export
delivery and distribution services. subsidies to support agriculture exports
Developing countries want to export (developed and developing both). The
tourism, healthcare, and professional
legally-binding decision would eliminate
service. Countries can decide which
services they want to allow. They can also these subsidies and prevent governments
decide whether to allow foreign from reverting to trade-distorting export
ownership. support in the future.
4. Rules - Tighten the rules on anti-dumping. Under this
Strengthen prohibitions against launching • developed members have
subsidies to retaliate against another committed to remove export
country's subsidies. Focus on commercial
subsidies immediately, except for
vessels, regional aircraft, large civil
aircraft, and cotton. Reduce fishery a handful of agriculture products,
subsidies to cut down on overfishing. • Developing countries will do so by
5. Intellectual property - Create a register to 2018. Developing members will
control country-of-origin for wine and keep the flexibility to cover
liquor. Protect product names, such as
Indian Economy for IAS by Pratik Gupta

marketing and transport costs for combined together — into the

agriculture exports until the end consideration of origin. It calls on
of 2023, preference-granting members to consider
allowing the use of non-originating
• And the poorest and food-
materials up to 75% of the final value of
importing countries would enjoy the product. (Means even when the 75% of
additional time to cut export the value of the product is gathered from
subsidies. RoW and just 25% Value addition is done
2. Public Stockholdings: Ministers also in LDCs)
adopted a Ministerial Decision on Public 6. $1.3 trillion IT trade deal:, a landmark deal
Stockholding for Food Security Purposes. to eliminate tariffs on 201 information
The final decision will be taken up in the technology products valued at over $1.3
next round of meeting in 2017. trillion per year concluded between 53
3. SSM: A Ministerial Decision on a Special WTO members.
Safeguard Mechanism (SSM) for However, all WTO members will benefit
Developing Countries recognizes that from the agreement, as they will all enjoy
duty-free market access to the markets of
developing members will have the right to
the members eliminating tariffs on these
temporarily increase tariffs in face of products.
import surges by using an SSM. Members
will continue to negotiate the mechanism BUENOS AIRES – ARGENTINA ROUND OF
in dedicated sessions of the Agriculture NEGOTIATION
Committee.
The Buenos Aires Ministerial Conference, held in
4. Market access in cotton export: the
December 2017, was a pivotal gathering of WTO
decision calls for cotton from LDCs to be
member countries. While not officially referred to
given duty-free and quota-free access to as a "round" of negotiations like previous meetings,
the markets of developed countries — and it was a critical event for assessing the progress of
to those of developing countries declaring ongoing trade talks and addressing key issues facing
that they are able to do so — from 1 the multilateral trading system.
January 2016. The domestic support part During the conference, discussions centered on
various topics, including agriculture, fisheries
of the cotton decision acknowledges
subsidies, electronic commerce, and development
members' reforms in their domestic issues. However, significant progress on
cotton policies and stresses that more substantive issues was limited, reflecting ongoing
efforts remain to be made. On export challenges in reaching consensus among WTO
competition for cotton, the decision members.
mandates that developed countries One notable outcome of the Buenos Aires
prohibit cotton export subsidies Conference was the adoption of the Joint
Declaration on Trade and Women's Economic
immediately and developing countries do
Empowerment, emphasizing the importance of
so at a later date. gender equality and women's participation in trade.
5. Preferential rules of origin for LDCs: The Additionally, the conference highlighted the
Ministerial Conference adopted a decision growing importance of plurilateral initiatives, with
that will facilitate opportunities for least- discussions on e-commerce and investment
developed countries' export of goods to facilitation gaining prominence.
Overall, while the Buenos Aires Ministerial
both developed and developing countries
Conference did not result in major breakthroughs in
under unilateral preferential trade trade negotiations, it served as an important
arrangements in favour of LDCs. platform for dialogue and engagement among WTO
The Nairobi Decision expands upon this by members, reaffirming their commitment to the
providing more detailed directions on multilateral trading system amidst evolving global
specific issues such as methods for challenges.
determining when a product qualifies as
“made in an LDC,” and when inputs from Geneva Round of Negotiation-12th Ministerial
other sources can be “cumulated” — or Conference
Indian Economy for IAS by Pratik Gupta

emphasizing worries about possible revenue losses

Curtailing harmful fishing subsidies and the requirement for a more equal framework
The WTO passed a multilateral agreement that for the digital economy.
would curb ‘harmful’ subsidies on illegal,
unreported and unregulated fishing for the next Method of Dispute Settlement: The conference
four years, to better protect global fish stocks. Since recognized the persistent difficulties in the WTO's
2001, member states have been negotiating the dispute resolution process, especially the Appellate
banning of subsidies that promote overfishing. Body's paralysis since 2019 as a result of disputes
The current agreement, which establishes new over judge selections. In order to better settle trade
trading rules, is the second multilateral agreement disputes, members agreed to carry on talks until
in WTO’s history. 2024 to reestablish a fully operational dispute
“WTO members have for the first time, concluded resolution process.
an agreement with environmental sustainability at
its heart,” Okonjo-Iweala said. “This is also about Public stockholding and agriculture: Agricultural
the livelihoods of the 260 million people who reform discussions continued to be controversial,
depend directly or indirectly on marine fisheries.” particularly when it came to public stockholding for
food security. Other countries demanded more
Global Food Security extensive talks covering a range of agricultural
Members agreed to a binding decision to exempt trade issues, while India pushed for a long-term
food purchased by the UN’s World Food solution to help its domestic food security
Programme (WFP) for humanitarian purposes, from initiatives. The fact that no agreement could be
any export restrictions. reached highlights how difficult it is to strike a
balance between national interests and
In light of the global food shortages and rising prices international trade regulations.
caused by the war between Ukraine and Russia, the
group’s members issued a declaration on the Fisheries subsidies: Members sought to finalize
importance of trade in global food security and that regulations to remove subsidies that support illegal
they would avoid bans on food exports. However, fishing and overfishing, building on the partial
countries would be allowed to restrict food supplies agreement from the 2022 ministerial meeting.
to ensure domestic food security needs. Delegates were unable to come to a comprehensive
India’s key demand to allow it to export food from agreement despite acknowledging the gravity of
its public stockholdings to other countries will the environmental situation, which left important
reportedly be discussed in the next Ministerial problems unsolved.
Conference in 2023.
WORLD BANK and WORLD BANK GROUP
Covid-19 vaccine production
WTO members agreed to temporarily waive The World Bank is an international financial
intellectual property patents on Covid-19 vaccines institution that provides loans and grants to the
without the consent of the patent holder for 5 governments of low- and middle-income countries
years, so that they can more easily manufacture for the purpose of pursuing capital projects. It
them domestically. comprises two institutions: the IBRD, and the IDA.
The World Bank is a component of the World Bank
13TH MINISTERIAL CONFERENCE- ABU-DHABI Group.
Abu Dhabi hosted the 13th WTO Ministerial
Conference (MC13) from February 26 to March 2, The World Bank's most recently stated goals are
2024. The goal of this biennial conference was to ending extreme poverty and boosting shared
discuss important topics in the control of global prosperity.
trade. Among the main conclusions and
conversations were: World Bank Group

E-Commerce Prohibition: Members decided to The World Bank Group is an extended family of five
wait until the following ministerial conference to international organizations, and the parent
impose customs taxes on electronic transmissions. organization of the World Bank, the collective name
By avoiding tariffs on digital commodities like given to the first two listed organizations, the IBRD
software and media downloads, this ruling and the IDA:
preserves the status quo. Nonetheless, nations like
South Africa and India voiced their reluctance,
Indian Economy for IAS by Pratik Gupta

• International Bank for Reconstruction and The association shares the World Bank's mission of
Development (IBRD) reducing poverty and aims to provide affordable
• International Development Association development financing to countries whose credit
(IDA) risk is so prohibitive that they cannot afford to
• International Finance Corporation (IFC) borrow commercially or from the Bank's other
• Multilateral Investment Guarantee Agency programs. (174 Members)
(MIGA)
• International Centre for Settlement of IFC: The IFC is an international financial institution
Investment Disputes (ICSID) that offers investment, advisory, and asset-
management services to encourage private-sector
The World Bank was created at the 1944 Bretton development in less developed countries. The IFC is
Woods Conference, along with the International a member of the World Bank Group and is
Monetary Fund (IMF). The president of the World headquartered in Washington, D.C. in the United
Bank is traditionally an American. The World Bank States.
and the IMF are both based in Washington, D.C., It was established in 1956, as the private-sector arm
and work closely with each other. of the World Bank Group, to advance economic
Although many countries were represented at the development by investing in for-profit and
Bretton Woods Conference, the United States and commercial projects for poverty reduction and
United Kingdom were the most powerful in promoting development. The IFC's stated aim is to
attendance and dominated the negotiations. The create opportunities for people to escape poverty
intention behind the founding of the World Bank and achieve better living standards by mobilizing
was to provide temporary loans to low-income financial resources for private enterprise,
countries that could not obtain loans commercially. promoting accessible and competitive markets,
The Bank may also make loans and demand policy supporting businesses and other private-sector
reforms from recipients. entities, and creating jobs and delivering necessary
services to those who are poverty stricken or
IBRD; The IBRD is an international financial otherwise vulnerable. (186 Members)
institution, established in 1944 and headquartered
in Washington, D.C., United States, that is the MIGA: The MIGA is an international financial
lending arm of World Bank Group. The IBRD offers institution which offers political risk insurance and
loans to middle-income developing countries. The credit enhancement guarantees. These guarantees
IBRD is the first of five member institutions that help investors protect foreign direct investments
compose the World Bank Group. The initial mission against political and non-commercial risks in
of the IBRD in 1944, was to finance the developing countries. MIGA is a member of the
reconstruction of European nations devastated by World Bank Group and is headquartered in
World War II. The IBRD and its concessional lending Washington, D.C. in the United States.
arm, the International Development Association MIGA was established in 1988 as an investment
(IDA), are collectively known as the World Bank as insurance facility to encourage confident
they share the same leadership and staff. investment in developing countries. MIGA is owned
and governed by its member states, but has its own
The IBRD is owned and governed by its 189 member executive leadership and staff which carry out its
states, with each country represented on the Board daily operations. Its shareholders are member
of Governors. governments that provide paid-in capital and have
the right to vote on its matters. It insures long-term
IDA: The IDA is an international financial institution debt and equity investments as well as other assets
which offers concessional loans and grants to the and contracts with long-term periods. The agency is
world's poorest developing countries. The IDA is a assessed by the World Bank's Independent
member of the World Bank Group and is Evaluation Group each year. (182 Members)
headquartered in Washington, D.C. in the United
States. It was established in 1960 to complement ICSID: The ICSID is an international arbitration
the existing International Bank for Reconstruction institution established in 1966 for legal dispute
and Development by lending to developing resolution and conciliation between international
countries which suffer from the lowest gross investors and States. ICSID is part of and funded by
national income, from troubled creditworthiness, the World Bank Group, headquartered in
or from the lowest per capita income. Washington, D.C., in the United States. It is an
autonomous, multilateral specialized institution to
encourage international flow of investment and
Indian Economy for IAS by Pratik Gupta

mitigate non-commercial risks by a treaty drafted recommendations. It is essential for fostering long-
by the International Bank for Reconstruction and term economic expansion, lowering poverty, and
Development's executive directors and signed by easing global trade.
member countries. Currently, 163 contracting
member states agreed to enforce and uphold Special Drawing Rights
arbitral awards in accordance with the ICSID
Convention. The SDR was created as a supplementary
international reserve asset in the context of the
IMF Bretton Woods fixed exchange rate system. The
With 190 member nations, the International collapse of the Bretton Woods system in 1973 and
Monetary Fund (IMF) is a global financial the shift of major currencies to floating exchange
organization. It was founded in 1944 with the main rate regimes lessened the reliance on the SDR as a
objective of promoting global financial stability and global reserve asset. Nonetheless, SDR allocations
monetary cooperation. can play a role in providing liquidity and
As a kind of "lender of last resort," the IMF offers supplementing member countries’ official reserves,
financial support to nations that are having issues as was the case amid the global financial crisis.
with their balance of payments. This aids in The SDR serves as the unit of account of the IMF and
preventing crises and stabilizing economies. other international organizations.
Countries frequently have to enact economic The SDR system is like a special international
reforms in exchange. currency created by the IMF to help countries with
their foreign exchange reserves. It is not a currency
In addition to loans, the IMF keeps an eye on world like the dollar or euro, but rather a potential claim
economic developments, gives member countries on those currencies. Here’s how it works in simple
technical support, and makes economic terms:
1. What is SDR?
• SDR is an international reserve asset used by the IMF to supplement the official reserves of member
countries.
• It is not physical money but a unit of account based on a basket of major currencies:
o US Dollar (USD) o Japanese Yen (JPY)
o Euro (EUR) o British Pound (GBP)
o Chinese Yuan (CNY)

2. How Does It Work?

• The IMF allocates SDRs to its member countries based on their share (quota) in the IMF.
• Countries can exchange SDRs for freely usable currencies with other member nations.
• If a country faces a shortage of foreign currency (like dollars), it can use its SDRs to get dollars, euros,
or other needed currencies from another country through the IMF system.
3. Why Is It Important?
• Helps countries boost their foreign reserves without borrowing from expensive markets.
• Provides a safety net during financial crises.
• Reduces dependence on just one currency (like the US dollar).
4. Example in Action
Imagine a country facing a balance of payments crisis and needing US dollars. Instead of borrowing at high-
interest rates, it can use its SDR allocation to get dollars from another country that has extra. In return, the
country receiving SDRs can later use them for its own needs.
In short: SDRs are a flexible, international financial tool that helps countries manage economic stability without
relying too much on debt

Recently Revised SDR Basket

Fixed Number of Units of Currency for a 5-
Currency Weights determined in the 2022 Review
year period Starting Aug 1, 2022

U.S. Dollar 43.38 0.57813

Euro 29.31 0.37379

Indian Economy for IAS by Pratik Gupta

Chinese Yuan 12.28 1.0993

Japanese Yen 7.59 13.452

Pound Sterling 7.44 0.080870