India threatens to derail WTO deal, prompts angry U.S. rebuke

[Hamartia Antidote]

That is because fertilizers which are derived from petroleum are becoming costly due to rising oil prices.

More likely natural gas than oil.

 

[TejasMk3]

India Blocks WTO Deal on Customs Rules, Angering Fellow Members - NDTV

1. At the meeting in Geneva, diplomats from the 160 WTO member countries were supposed to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December. Some estimates say it could add $1 trillion (Rs.s 60 lakh crore) to the world economy and create 21 million jobs.
   
   
2. India wants implementation of the Trade Facilitation Agreement or TFA as a part of a single undertaking that includes a permanent solution on public food stockpile, necessary for its food security programme.
   
   
3. India stockpiles food for its poor, citing the need for food security, but doing so puts it at risk of breaking rules of the WTO, which worries that the stockpiling of subsidised food can distort trade.
   
   
4. The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production of a country. So the US gives about $120 billion (Rs. 7.2 lakh crore) as agriculture subsidy as compared to India's $12 billion (Rs. 72,000 crore).
   
   
5. The subsidy support is calculated at prices that are over two decades old, not at current prices. India is asking for a change in the base year (1986) for calculating food subsidies.
   
   
6. In Bali, WTO members had agreed to give India a pass on its stockpiles until 2017, while negotiating a permanent solution. India links its signing the TFA - which has a deadline of July 31 - to having a concrete roadmap on that permanent solution.
   
   
7. A group of 25 countries including Australia, Canada, Colombia, Mexico, Norway, Switzerland and Thailand said they were "dismayed" at the failure to agree on the TFA at Thursday's meeting. "A decision to step away would be in no one's interest. It would seriously undermine the ability of the WTO to deliver for the future," the group said in a statement. The EU issued a similar warning.
   
   
8. WTO Director General Roberto Azevedo said talks were ongoing to try to resolve the problem before the deadline of July 31. "We are informally talking, yes," he told Reuters. When asked what would happen if there were no deal by July 31, he said: "That's part of the conversation."
   
   
9. The TFA, which has to be formally implemented in 2015, aims at simplifying customs procedure, increasing transparency and reducing transactions cost. It is being pushed by the US and other developed nations as they seek to bolster their sagging economies through unhindered international trade by way of uniform and easy procedures at customs.
   
   
10. Experts say if the global trade negotiations lose momentum again, many WTO members, including the European Union and the United States, will effectively give up and focus all their efforts on more ambitious trade reforms that they are already negotiating bilaterally and in small groups.

************************************************************************************************
Why is it based off 1986?
What sort of law prevents stockpiling of food for the poor at times of disaster or need?
From point no.4 the agreement in its current form seems more advantageous for subsidies given in nations like the U.S.

Clearly there is no roadmap yet for the concerns raised by us, which is what the previous UPA had said, so there really actually is no deviation from the previous position about "commitments", in fact, nothing has actually been committed even.

I read somewhere that the agreement could be adopted by a majority vote, but that is something that hasnt been done ever. Wonder how that would change things.

Until Modi changes this, it will remain an issue. In fact, it dissuades foreign investors to India, for say ASEAN and Bangladesh

Most of the articles you quoted are dated 2012, or just before Modi took charge. Since There's been a rise in investment. But some rules need to exist.

 

[Makaramarma]

All the more to emphasize upon foreign imports.

Do you have reading comprehension problem ? Read my post again.

We choose food security over Blackmail.

Until Modi changes this, it will remain an issue. In fact, it dissuades foreign investors to India, for say ASEAN and Bangladesh.

They are free to go to ASEAN or B'desh. Good luck.

 

[Sam.]

No, the article states that India will not honor the previous government's commitments to the TFA under the WTO. That means it is abrogating its agreement.

What does this have to do with food security? This has to do with food subsidies. If anything, the monsoon issue makes cheap imports even more necessary.

Reuters) - India threatened on Friday to block a worldwide reform of custom rules, which some estimates say could add $1 trillion to the global economy and create 21 million jobs, prompting a U.S. warning that its demands could kill global trade reform efforts.

Diplomats from the 160 World Trade Organization member countries meeting in Geneva had been meant to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December in the WTO's first ever global trade agreement.

India threatens to derail WTO deal, prompts angry U.S. rebuke| Reuters

Article is misleading so do some research first friend.

 

[Aepsilons]

They are free to go to ASEAN or B'desh. Good luck.

We have been. India is not the only sole partner for most foreign investors to South Asia.

Pakistan, Sri Lanka, Bangladesh , and ASEAN are all attractive.

More likely natural gas than oil.

I agree.

 

[LeveragedBuyout]

Reuters) - India threatened on Friday to block a worldwide reform of custom rules, which some estimates say could add $1 trillion to the global economy and create 21 million jobs, prompting a U.S. warning that its demands could kill global trade reform efforts.

Diplomats from the 160 World Trade Organization member countries meeting in Geneva had been meant to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December in the WTO's first ever global trade agreement.

India threatens to derail WTO deal, prompts angry U.S. rebuke| Reuters

Article is misleading so do some research first friend.

With all due respect, if I had to double-check all the facts of every article posted on PDF, I would be here all day.

That said, the version you have presented is hardly more worthy of sympathy. India, or the world? And over what amounts to a technicality? I'll take the world, thank you.

 

[Aepsilons]

That said, the version you have presented is hardly more worthy of sympathy. India, or the world? And over what amounts to a technicality? I'll take the world, thank you.

Well said, and given the trend of many Corporations that are trending towards overseas expansion, developing markets such as those in South Asia (India in particular) may benefit from implementing policies that are attractive towards foreign capital. However, if policies remain intact that dissuade investors per se in the case of taxation regimes, failure to comply with said agreements, confidence may be deferred. India, as a developing market and in need of foreign investments and infrastructure development(s), should capitalize on said platforms.

 

[Makaramarma]

We have been. India is not the only sole partner for most foreign investors to South Asia.

Pakistan, Sri Lanka, Bangladesh , and ASEAN are all attractive.

I agree.

I repeat. You are free to go anywhere. Pakistan, SL, B'desh, ASEAN, cuba, nigeria, peru etc. Good luck.

 

[Aepsilons]

And over what amounts to a technicality? I'll take the world, thank you.

@LeveragedBuyout ,

What's your view on the Taxation Regime implemented by the Indian Government?

 

[Makaramarma]

With all due respect, if I had to double-check all the facts of every article posted on PDF, I would be here all day.

That said, the version you have presented is hardly more worthy of sympathy. India, or the world? And over what amounts to a technicality? I'll take the world, thank you.

And we will take India, thank you.

 

[LeveragedBuyout]

India Blocks WTO Deal on Customs Rules, Angering Fellow Members - NDTV

1. At the meeting in Geneva, diplomats from the 160 WTO member countries were supposed to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December. Some estimates say it could add $1 trillion (Rs.s 60 lakh crore) to the world economy and create 21 million jobs.
   
   
2. India wants implementation of the Trade Facilitation Agreement or TFA as a part of a single undertaking that includes a permanent solution on public food stockpile, necessary for its food security programme.
   
   
3. India stockpiles food for its poor, citing the need for food security, but doing so puts it at risk of breaking rules of the WTO, which worries that the stockpiling of subsidised food can distort trade.
   
   
4. The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production of a country. So the US gives about $120 billion (Rs. 7.2 lakh crore) as agriculture subsidy as compared to India's $12 billion (Rs. 72,000 crore).
   
   
5. The subsidy support is calculated at prices that are over two decades old, not at current prices. India is asking for a change in the base year (1986) for calculating food subsidies.
   
   
6. In Bali, WTO members had agreed to give India a pass on its stockpiles until 2017, while negotiating a permanent solution. India links its signing the TFA - which has a deadline of July 31 - to having a concrete roadmap on that permanent solution.
   
   
7. A group of 25 countries including Australia, Canada, Colombia, Mexico, Norway, Switzerland and Thailand said they were "dismayed" at the failure to agree on the TFA at Thursday's meeting. "A decision to step away would be in no one's interest. It would seriously undermine the ability of the WTO to deliver for the future," the group said in a statement. The EU issued a similar warning.
   
   
8. WTO Director General Roberto Azevedo said talks were ongoing to try to resolve the problem before the deadline of July 31. "We are informally talking, yes," he told Reuters. When asked what would happen if there were no deal by July 31, he said: "That's part of the conversation."
   
   
9. The TFA, which has to be formally implemented in 2015, aims at simplifying customs procedure, increasing transparency and reducing transactions cost. It is being pushed by the US and other developed nations as they seek to bolster their sagging economies through unhindered international trade by way of uniform and easy procedures at customs.
   
   
10. Experts say if the global trade negotiations lose momentum again, many WTO members, including the European Union and the United States, will effectively give up and focus all their efforts on more ambitious trade reforms that they are already negotiating bilaterally and in small groups.

************************************************************************************************
Why is it based off 1986?
What sort of law prevents stockpiling of food for the poor at times of disaster or need?
From point no.4 the agreement in its current form seems more advantageous for subsidies given in nations like the U.S.

Clearly there is no roadmap yet for the concerns raised by us, which is what the previous UPA had said, so there really actually is no deviation from the previous position about "commitments", in fact, nothing has actually been committed even.

I read somewhere that the agreement could be adopted by a majority vote, but that is something that hasnt been done ever. Wonder how that would change things.


Most of the articles you quoted are dated 2012, or just before Modi took charge. Since There's been a rise in investment. But some rules need to exist.

Just wanted to clarify a couple of points. First, the US is allowed more subsidy on an absolute basis because it produces more. According to the figures in your article, the US produces 10 times more than India, so it gets 10 times the subsidies, but both the US and India are restricted by the same 10% rule. The solution is either for India to produce more, or for both to eliminate subsidies. I think you can guess who would benefit under each scenario.

Food stockpiling for the poor? Who could be against such a noble endeavor? Let me explain. Food stockpiling is considered to be a "distortion of trade" in that this is a polite way of saying that it is a way to introduce subsidies and protectionism. A government can pay its farmers above-market rates for the food it puts into its storehouses (subsidy), and when it releases the food to the market, it can sell it at below-market rates (subsidy). That's a non-tariff barrier, and that's why it's objectionable.

 

[TejasMk3]

Just wanted to clarify a couple of points. First, the US is allowed more subsidy on an absolute basis because it produces more. According to the figures in your article, the US produces 10 times more than India, so it gets 10 times the subsidies, but both the US and India are restricted by the same 10% rule. The solution is either for India to produce more, or for both to eliminate subsidies. I think you can guess who would benefit under each scenario.

Food stockpiling for the poor? Who could be against such a noble endeavor? Let me explain. Food stockpiling is considered to be a "distortion of trade" in that this is a polite way of saying that it is a way to introduce subsidies and protectionism. A government can pay its farmers above-market rates for the food it puts into its storehouses (subsidy), and when it releases the food to the market, it can sell it at below-market rates (subsidy). That's a non-tariff barrier, and that's why it's objectionable.

Exactly, it all benefits the U.S, all one way, which is why this is opposed.

 

[Sam.]

With all due respect, if I had to double-check all the facts of every article posted on PDF, I would be here all day.

That said, the version you have presented is hardly more worthy of sympathy. India, or the world? And over what amounts to a technicality? I'll take the world, thank you.

How can you just bash India without technicality then ?

Well said, and given the trend of many Corporations that are trending towards overseas expansion, developing markets such as those in South Asia (India in particular) may benefit from implementing policies that are attractive towards foreign capital. However, if policies remain intact that dissuade investors per se in the case of taxation regimes, failure to comply with said agreements, confidence may be deferred. India, as a developing market and in need of foreign investments and infrastructure development(s), should capitalize on said platforms.

India need the world similar to as world need the India.If this thing stalled we have others thing as a back up plan.

We are tired to be treated like servant of the world.

 

[he-man]

This is to all Idiods who chants that BJP follows congress strategy.

Oh the strategies are 80-90% same only,,,,the difference should come from implementation.
If modi cannot implement the policies,,,he too would be a failure

Exactly, it all benefits the U.S, all one way, which is why this is opposed.

Actually food security bill has complicated it,,,courtesy UPA-2

Just wanted to clarify a couple of points. First, the US is allowed more subsidy on an absolute basis because it produces more. According to the figures in your article, the US produces 10 times more than India, so it gets 10 times the subsidies, but both the US and India are restricted by the same 10% rule. The solution is either for India to produce more, or for both to eliminate subsidies. I think you can guess who would benefit under each scenario.

Food stockpiling for the poor? Who could be against such a noble endeavor? Let me explain. Food stockpiling is considered to be a "distortion of trade" in that this is a polite way of saying that it is a way to introduce subsidies and protectionism. A government can pay its farmers above-market rates for the food it puts into its storehouses (subsidy), and when it releases the food to the market, it can sell it at below-market rates (subsidy). That's a non-tariff barrier, and that's why it's objectionable.

The problem is we are not gonna release it to market.
According to food security bill,,,free grain is promised to 60-65% of our population.

A stupid law no doubt,,,but we are deriving no market benefit here

 

[LeveragedBuyout]

@LeveragedBuyout ,

What's your view on the Taxation Regime implemented by the Indian Government?

I am not familiar with the details of the Indian taxation system, so I had to review some IMF, World Bank, KPMG, and OECD documents to get up to speed. I can't provide much insight beyond the obvious: It seems overly complicated, with its fragmented duties, and I saw that the World Bank ranked India 158th for paying taxes while examining the ease of doing business. It looks like the government is committed to simplifying this with a broad goods and services tax, which should help trade both internally and externally.

That said, I was hugely disappointed in the new budget. Apparently Finance Minister Jaitley did not rule out retrospective taxes on business. This is probably the most insidious and anti-growth policy that a government is capable of. Most businesses can survive, and sometimes in thrive, in high-tax or complicated tax environments, provided those environments are stable. Businesses need to be able to plan for 5-10 years, depending on the project, and know that the rules, regulations, and tax regime will be fairly stable (or improving) over that period of time. Future tax increases will reduce returns, but can be dealt with, as often new tax rules provide loopholes or exceptions, and sometimes the project can even be aborted, with the profits already made simply pocketed and further investment flows stopped. Retrospective tax increases, however, are impossible to plan for. They destroy returns, but more importantly, destroy the confidence in projections, since not a single year of income can be considered safe, even if all the tax laws effective that year were followed to the letter. How can one invest in a project if one doesn't know the return? Even the aberrant "excessive profits tax" that some countries sometimes feel it's appropriate to levy on oil firms only affects companies from the implementation of the tax forward, not retrospectively.

On a high level, actions that are provided with an incentive will increase in frequency, and actions that are punished will decrease in frequency. Tax is a punishment, and retrospective taxes are the most arbitrary kind of tax. Hopefully India will do away with retrospective taxes and lower the nominal tax rate (although from what I've read at the IMF, India's effective corporate tax rate is less than 25%, so fairly competitive). India should encourage investment, not punish it, especially since it's still at an earlier stage of development.