International Trade Current Affairs

India to provide tariff concessions on 3,142 items to APTA members

India has agreed to provide tariff concessions on 3,142 products to Asia Pacific Trade Agreement (APTA) members, from July 1, 2018. The tariff concessions are implementation of results of fourth round of negotiations under APTA, which were formally concluded and signed by the ministers of member countries during meeting of APTA Ministerial Council in January, 2017.

Key Facts

With this implementation of the Fourth Round, the coverage of preferences of total tariff lines for each member will come of 10,677 tariff lines (up from 4,270 items at conclusion of 3rd Round). It will also deepen average Margin of Preference (MoP) being provided under agreement to 31.52%. The LDC members are entitled to greater concessions on 1,249 items with average MoP of 81% under special and differential treatment provisions of APTA.

Asia Pacific Trade Agreement (APTA)

APTA is an initiative under United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) for trade expansion through exchange of tariff concessions among developing country members of Asia Pacific Region. It is preferential trade agreement (PTA), under which basket of items as well as extent of tariff concessions are enlarged during trade negotiating rounds which are launched from time to time.

APTA was signed in 1975 and was formerly known as Bangkok agreement (renamed to present name in 2005). UNESCAP’s Trade and Investment Division in Bangkok, Thailand serves its secretariat. It is the first plurilateral and oldest preferential trade agreement among developing countries in Asia-Pacific .The six member countries of APTA are Bangladesh, China, India, Laos, Korea and Sri Lanka.

APTA aims to promote economic development through adoption of mutually beneficial trade liberalization measures that will contribute to intra-regional trade expansion and provides for economic integration through coverage of merchandise goods, services, investment and trade facilitation.

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China imposes additional duties on US $50 billion worth of American products

China in tit-for-tat action has imposed additional tariffs and duties on $50-billion worth of American products. It comes after US President Donald Trump slapped stiff 25% tariff on Chinese goods worth similar amount. This has triggered full-fledged trade war between world’s two largest economies.

Key Facts

The decision was taken in line with relevant stipulations of Foreign Trade Law of China and Regulations of China on Import and Export Duties, as well as fundamental principles of international laws. China imposed additional duties of 25% on 659 items of American products. Out of the 659 items, tariffs on 545 items worth about $34 billion including agricultural products aquatic products and vehicles will be effective from July 2018. The tariffs on remaining 114 items, which include chemical products, medical equipment and energy products, will be declared later. With this, trade conditions of these goods will affect relevant producers and trade companies as well as production and operation of upstream and downstream industries.

Background

US had announced additional tariffs of 25% on Chinese imports worth approximately $50 billion, accusing it of intellectual property theft and unfair trade practices. US also had notified that it will continue to impose additional tariffs if China takes retaliatory measures

The move to impose import tariffs came as two countries held several rounds of talks following US President Donald Trump’s demand to slash bilateral trade deficit by $100 billion in month followed by $200 billion to address $375-billion deficit.

In mid-May 2018, both countries had announced cease-fire in trade war after two rounds of trade negotiations. In the first round, China had agreed to significantly increase purchases of US agricultural and energy products to reduce trade imbalance. But the second round of trade talks in Beijing failed to yield any breakthroughs. Moreover, US President’s decision to impose fresh tariffs on China follows his recent imposition of steep tariffs on steel and aluminium imports from Canada, European Union (EU) and Mexico on national security grounds.

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