{"id":205604,"date":"2022-09-12T20:15:12","date_gmt":"2022-09-12T14:45:12","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=205604"},"modified":"2022-09-12T20:15:12","modified_gmt":"2022-09-12T14:45:12","slug":"new-paradigm-ftas-multilateral-exposure-limited-to-supply-chains-governance","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/new-paradigm-ftas-multilateral-exposure-limited-to-supply-chains-governance\/","title":{"rendered":"New paradigm: FTAs, multilateral exposure limited to supply chains, governance"},"content":{"rendered":"\n

Source<\/strong>: The post is based on an article\u00a0\u201c<\/strong>New paradigm: FTAs, multilateral exposure limited to supply chains, governance\u201d<\/strong>\u00a0published in\u00a0The Indian Express<\/strong>\u00a0on\u00a012th<\/sup> September 2022<\/strong>.<\/p>\n

Syllabus:<\/strong> GS 2 – Bilateral, regional and global groupings and agreements<\/strong><\/p>\n

News: <\/strong>India has recently decided to stay away from trade part of the Indo-Pacific Economic Framework (IPEF). This decision has come on the backdrop of declining trade in India.<\/p>\n

What is IPEF and why has India taken decision to stay away from IPEF?<\/strong><\/h5>\n

IPEF has four pillars trade, supply chains, tax and anti-corruption and clean energy.<\/p>\n

It is not like a regular trade agreement as the 14 members are not obligated by all the four pillars even though they are signatories of it.<\/p>\n

India has decided to stay away from trade part of the agreement and has joined other three pillars.<\/p>\n

What are the other problems with IPEF?<\/strong><\/h5>\n

IPEF is being seen as an alternative to Trans-Pacific Partnership (TPP).<\/p>\n

America recently decided to stay away from Trans-Pacific Partnership (TPP) and IPEF is led by America.<\/p>\n

Therefore, IPEF is being seen as re-establishing America economic existence in the Indo-Pacific.<\/p>\n

What are the concerns behind the withdrawal of India from the<\/strong> IPEF?<\/strong><\/h5>\n

One<\/strong> of the reasons behind it, is the increase in imports from China.<\/p>\n

Second,<\/strong> IPEF also does not incorporate issues such as tariff reduction or reciprocal commitments.<\/p>\n

Third,<\/strong> India is looking to find a place in the Minerals Security Partnership (MSP).<\/p>\n

Minerals Security Partnership (MSP)<\/strong> is an eleven-member partnership program led by the US that focuses to secure supply chains of critical minerals with an aim to reduce dependency on China.<\/p>\n

Fourth, <\/strong>India is also more impacted than other countries when global trade slows down.<\/p>\n

For example, the net exports to real GDP growth were at minus 6.2% in April-June 2022-23 even as the country\u2019s trade deficit went low to 28.7 billion dollars in August from a record high of 30 billion dollars in the month of July.<\/p>\n

Fifth, <\/strong>the trade deficit also remained high in the month of August and there are other concerns coming up in the future.<\/p>\n

What are the future concerns for India in trade?<\/strong><\/h5>\n

First,<\/strong> the European Union is heading towards recession.<\/p>\n

Second,<\/strong> there are shipments being postponed because of the confirmed orders.<\/p>\n

Third,<\/strong> inflation in the US has led to lower demand.<\/p>\n

Fourth,<\/strong> there are new items added to the negative list of exports such as wheat, steel, and iron pellets. These all worsen the balance of trade situation.<\/p>\n

Fifth<\/strong>, there is an estimate from the experts that Current Account Deficit could rise to 3.3 percent of GDP in FY23.<\/p>\n

Why staying away from IPEF is not of much concern to India?<\/strong><\/h5>\n

Even though India has stayed away from IPEF agreement there are other agreements with which India is looking to move forward.<\/p>\n

The agreements are \u2013 a)<\/strong> trade agreements with UAE and Australia, b)<\/strong> a free trade agreement (FTA) with the United Kingdom, and c)<\/strong> there are trade talks with Canada going on.<\/p>\n

Although exports have been impacted globally there are demands for low-value products which will help India\u2019s MSMEs.<\/p>\n

This is a positive sign for India in the medium and long term and countries are also moving away from China because it has become costlier and less reliable.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article\u00a0\u201cNew paradigm: FTAs, multilateral exposure limited to supply chains, governance\u201d\u00a0published in\u00a0The Indian Express\u00a0on\u00a012th September 2022. Syllabus: GS 2 – Bilateral, regional and global groupings and agreements News: India has recently decided to stay away from trade part of the Indo-Pacific Economic Framework (IPEF). This decision has come on… Continue reading New paradigm: FTAs, multilateral exposure limited to supply chains, governance<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10500],"class_list":["post-205604","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704818467},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/205604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=205604"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/205604\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=205604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=205604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=205604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}