World Trade Current Affairs
India is considering bringing together group of 8-10 member countries of World Trade Organisation (WTO) to prepare agenda for creation of conducive atmosphere to ensure smooth functioning of the global trade body.
It would be an informal group within WTO, which may also include nations like Brazil, China, South Africa, China, Indonesia and Columbia. The main idea behind this group is to create proper structured agenda which will be acceptable to all countries to reduce tension. Its main objective is to create conducive atmosphere so that global trading system works well. From India, Union Commerce Ministry will be discussing issue internally and work on structure of the group.
The initiative assumes significance as trade tensions have escalated after United States had imposed high customs duties on certain steel and aluminium products. Other WTO members too have retaliated, which is leading to trade war-like situation. In trade wars, countries try to restrict imports by resorting to tariff and non-tax related barriers. Increase in customs duties on product makes that item less competitive in importing nation.
The talks at WTO’s 11th Ministerial Conference held in Argentina in December 2017 had collapsed after US went back on its commitment to find permanent solution to public food stockholding issue, a key matter for India. Following collapse of WTO ministerial talks in Argentina in December 2017, India had organised mini-ministerial meeting of about 45 WTO members in March 2018 to revitalise multi-lateral trade body. The objective of meeting was to initiate free and frank discussion on various key issues and challenges facing Geneva-based WTO.
World Trade Organisation (WTO)
WTO is an inter-governmental organization for governments to negotiate global trade agreements and progressively liberalizing trade. It operates system of trade rules that apply to all its members. It is also a place for Member governments to settle their trade disputes. Its headquarters are located in Geneva, Switzerland. It was established on 1 January 1995 and its official languages are English, French and Spanish.
According to UN World Economic Situation and Prospects (WESP), India’s economy is projected to grow 7.6% in fiscal year 2018-19, making it fastest growing economy in the world. GDP growth in India is expected 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively.
Key Highlights of report
World economy: It is projected to reach 3.2% both in 2018 and 2019, an upward revision by 0.2 and 0.1%, respectively. Global GDP is expected to expand, reflecting strong growth in developed countries and broadly favourable investment conditions. However rising trade tensions, heightened uncertainty over monetary policy, increasing debt levels and greater geopolitical tensions can potentially thwart growth progress.
World trade growth: It also has accelerated, reflecting widespread increase in global demand. Many commodity-exporting countries will also benefit from the higher level of energy and metal prices. The modest rise in global commodity prices will exert some upward pressure on inflation in many countries. But the inflationary pressures remain contained across most developed and developing regions.
India: GDP growth is expected 7.5 and 7.6% in fiscal years 2017-18 and 2018-19 respectively. This is a substantial recovery from 6.7% growth India registered in fiscal year 2017. Growth in India is gaining momentum, underpinned by robust private consumption, slightly more supportive fiscal stance and benefits from past reforms. Though capital spending in India has shown signs of revival, more widespread and sustained recovery in private investment remains crucial challenge in India.
China: It is projected to gradually moderate from 6.9% in 2017 to 6.5% in 2018 and 6.3% in 2019. Its growth is expected to remain solid, supported by robust consumer spending and supportive fiscal policies followed by ongoing structural reforms.
South Asia: GDP growth in region is expected to strengthen to 6.6% in 2018 and 6.8% in 2019, following an expansion of 6% in 2017. It remains favourable, amid robust domestic demand, strong infrastructure investment and moderately accommodative monetary policies. Moreover, regional inflation is anticipated to remain stable and at relatively low levels.
UN World Economic Situation and Prospects (WESP)
The report is joint product of UN Department of Economic and Social Affairs (UN/DESA), UN Conference on Trade and Development (UNCTAD) and five United Nations regional commissions.