India-US Bilateral Talks on Trade Settlement

Published: 14th Sep, 2023

Context

During the bilateral talks in New Delhi amid the US President’s visit, India and the United States announced the settlement of the seventh and final outstanding World Trade Organization (WTO) dispute between the two nations.

About

Key-highlights of the development

The six disputes that have been already settled include;

Countervailing measures on certain hot-rolled carbon steel flat products from India,
Certain measures relating to solar cells and modules, and
Measures relating to the renewable energy sector,
India's export-related measures,
Certain measures on steel and aluminum products and
Additional duties on some products from the US.

The six previous disputes were resolved during PM Modi’s state visit to the US.
Now, the only remaining issue of the poultry case has also been resolved.
As part of the agreement, India also agreed to reduce tariffs on certain U.S. products, including frozen turkey, frozen duck, fresh blueberries and cranberries, frozen blueberries and cranberries, dried blueberries and cranberries, and processed blueberries and cranberries.
These tariff cuts will expand economic opportunities for U.S. agricultural producers in a critical market and help bring more U.S. products to customers in India.
India also agreed to reduce tariffs on certain U.S. products, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents.

WTO and dispute resolution:

Dispute settlement is the central pillar of the multilateral trading system, and the WTO’s unique contribution to the stability of the global economy.
Without a means of settling disputes, the rules-based system would be less effective because the rules could not be enforced.
The WTO’s procedure underscores the rule of law, and it makes the trading system more secure and predictable.
The system is based on clearly defined rules, with timetables for completing a case.
First rulings are made by a panel and endorsed (or rejected) by the WTO’s full membership. Appeals based on points of law are possible.

The World Trade Organization (WTO):

The WTO is an international organization established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT).
It is headquartered in Geneva, Switzerland, and serves as the global body responsible for regulating international trade.
Objective:
- The primary objective of the WTO is to promote and facilitate international trade by reducing trade barriers and tariffs.
- Member countries engage in negotiations to liberalize trade and establish rules governing trade-related aspects such as tariffs, subsidies, and trade dispute resolution.
Principles of the WTO:
- Non-discrimination (the most-favored-nation principle), which ensures that any trade advantage granted to one member must be extended to all members.
- National treatment, ensuring that foreign and domestic products are treated equally.
- Freer trade: gradually, through negotiation.
The WTO provides a mechanism for resolving trade disputes among member countries.

India-US trade relations

In 2021, overall U.S.-India bilateral trade in goods and services reached a record 157 billion dollars.
The United States is India’s largest trading partner and most important export market.
Many U.S. companies view India as a critical market and have expanded their operations there.
Likewise, Indian companies seek to increase their presence in U.S. markets and at the end of 2020, Indian investment in the United States totaled 12.7 billion dollars, supporting over 70,000 American jobs.
The nearly 200,000 Indian students in the United States contribute $7.7 billion annually to the U.S. economy.

CURRENT AFFAIRS FOR UPSC IAS

India-US Bilateral Talks on Trade Settlement

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CURRENT AFFAIRS FOR UPSC IAS

India-US Bilateral Talks on Trade Settlement

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