Daily Financial News Analysis – 1st Oct’19

Table of Contents

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.

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.

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.

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.

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

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