Daily Finacial News Image 1st October 2019

Daily Financial News Analysis – 1st Oct’19 | PDF Download

India vs USA @WTO

  • The US had taken India to the WorldTrade Organization (WTO) in July.
  •  Its disagreement over retaliatorytariffs imposed by New Delhi on 28 American products.
  •  US imposed a tariff of 25% and 10% onimports of steel and aluminium products respectively.
  • India blocked a US request to set up apanel to settle.

General Agreement on Tariffs and Trade

  •  23 countries signed it on 30-Oct-1947
  • GATT went into effect on 01-Jan-1948
  • Legal agreement: minimizing barriersto international trade by eliminating or reducing quotas, tariffs and subsidies while preserving significant regulations.
  • Eventually leading to the creationWTO on ________?
  • The Council for Trade in Goods (GoodsCouncil) is responsible for the GATT and consists of representatives from all WTO member countries.
  •  The council has 10 committees thataddress subjects including market access, agriculture, subsidies, and antidumping measures.
  •  GATT aim: to end quantitative tradebarriers
  • The agreement also provided a systemto arbitrate commercial disputes among nations.
  • Key achievements: trade withoutdiscrimination
  • Every signatory member of the GATTwas to be treated as equal to any other.
  • This is known as the most-favorednation principle
  • A practical outcome of this was thatonce a country had negotiated a tariff cut with some other countries (usually its most important trading partners), this same cut would automatically apply to all GATT signatories.
  • Escape clauses did exist, wherebycountries could negotiate exceptions if their domestic producers would be particularly harmed by tariff cuts.

 Rework export schemes

  • India lost a key trade dispute with the USIndia will likely expedite a process toreplace or restructure various WTOincompatible export schemes in the coming months.
  •  New Delhi offered illegal export subsidiesand “thousands of Indian companies are receiving benefits totaling over $7 billion annually from these programmes” .
  • Analysts say what comes as a blessingin disguise for India is the US move to block judges to the appellate tribunal, which will be crippled with just one judge left after December 11.
  •  In that case, the fate of any appeal byIndia against a verdict in favour of the US remains uncertain.
  • Unless a decision is made by thetribunal on the appeal, the findings of the WTO’s dispute panel can’t be binding on India, they have added.

Pakistan’s Economical Troubles

Punjab Maharashtra Cooperative Bank

  • Economic Offences Wing, MumbaiPolice registered FIR
  • ₹4,355.46 crore alleged irregularities
  • More than two-thirds of PMC Bank’sloan exposure is to the bankrupt real estate developer HDIL.

Blockbuster divestments

  •  A group of secretaries on Mondaycleared strategic sales
  1. Bharat Petroleum Corp. Ltd (BPCL)
  2. BEML
  3. Container Corporation of India (Concor)
  4. Shipping Corporation of India (SCI)
  • The Air India expression of interest(EoI) paperwork is also likely to be finalised and issued soon. GoI target this FY: ₹1.05 lakh crorefrom disinvestment

 Core Output Growth Slips

  •  India’s core sector output contracted0.5% in August.
  •  July growth was at 2.7%
  • The contraction, according to thecommerce and industry ministry data suggests lack of any recovery in the Q2.
  • Core slowdown reflects situation ofmanufacturing, construction and an overall weakness in the economy




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