Global Trade Current Affairs
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International Monetary Fund (IMF), World Bank and World Trade Organization have collectively launched report “Reinvigorating Trade and Inclusive Growth”. In this report all three international organisations have sought liberalisation of global service sector, asserting that barriers to these services trade currently is roughly as high as those to trade in goods about a half century ago.
Key Highlights of Report
Services comprise some two-thirds of global GDP and employment. The limited opening of service sectors to foreign competition impedes trade and productivity growth throughout sector and broader economy. Countries should open up to international competition in services provided in other ways, including through foreign direct investment (FDI) and operation of foreign affiliates and temporary movement of workers across borders for the purpose of supplying services.
The full services trade liberalisation can raise manufacturing productivity by average of 22% across sample of 57 countries with larger benefits for countries with stronger institutional environments. Moreover, service sector has enormous contributor to growth and to trade including manufacturing trade.
Improved access to services from trade reform promotes economy-wide productivity and income growth, and given sector’s size, role of services productivity in overall economic performance is evident. There is interplay between services reform and manufacturing performance
Services comprise significant shares of value added of all sectors in economy and this is reflected in trade figures also. Only quarter of global trade is traded as services, on value-added basis half of the value of global trade originates in service sectors.
The trade in services sector has potential of contributing particularly strongly to productivity growth and economic growth overall. Prolonged slowdown in pace of trade reform is leading to widespread trade distortions and putting at risk strength and durability of global economic recovery, despite recent rebound in trade.
Digital economy revolution is opening new opportunities for cross-border trade and investment and this is changing nature of trade, elevating roles of policies relating to electronic commerce, investment and services trade.
India has announced to host informal Ministerial meeting of World Trade Organisation (WTO) in March 2018 in New Delhi to muster support for issues and also help to multi-lateral process.
It was announced by Deepak Jagdish Saksena, India’s ambassador and permanent representative to WTO during informal WTO ministerial gathering at Davos on the sidelines of the World Economic Forum (WEF) annual summit.
About 40 WTO members from both rich and developing nations are being called by India for this informal meeting to “revitalise” the multi-lateral trade body. The objective of meeting is to discuss ways to revitalise WTO to ensure predictable and transparent system of rule-making in the area of international trade.
The meeting will be taking place after collapse of the WTO 11th Ministerial Conference (MC 11) held in Buenos Aires in December 2017. It will be held in backdrop of rich nations forming groupings to prepare ground for pushing new issues such as investment facilitation, preparing rules for e-commerce, promoting gender equality, reducing subsidy on fisheries, unreported and unregulated fishing
India has been keenly pushing agriculture issues including permanent solution on public stockholding issue for food security at WTO Ministerial Conferences. It has also been raising its voice against bringing new issues proposed by developed countries, especially those which are not directly linked to trade.
India had expressed its disappointment over US’s refusal to agree on public stockholding issue at recently concluded WTO’s MC 11 in Buenos Aires, Argentina in December 2017. The MC 11 had concluded in deadlock without any substantial outcome as consensus eluded the 164-member body.
The deadlock came after US and other developed countries blocked permanent solution on government stockholding for food security purposes and toughened stand on new issues by India and other developing countries. US also had refused to re-affirm the multilateralism and the Doha development mandate in MC11.