EU The EUs mission in the 21st century is to: 1.

Maintain and build on the peace established between its member states; 2. Bring European countries together in practical cooperation; 3. Ensure that European citizens can live in security; 4. Promote economic and social solidarity; 5. Preserve European identity and diversity in globalised world; 6. Promulgate the values that Europeans share. Important policies of European Union : The European Union acts in a wide range of policy areas where its action is beneficial to the member states. These include: Innovation policies, which bring state-of-the art technologies to fields such as environmental protection, research and development (R & D) and energy; Solidarity policies (also known as cohesion policies) in regional, agricultural and social affairs. The Union funds these policies through an annual budget which enables it to complement and add value to action taken by national governments. The EU budget is small by comparison with the collective wealth of its member states: it represents no more than 1.23 % of their combined gross national income. Some of the important policies are mentioned below: What does the EU do?Exchange Rate Policy,Single market ,Tax Policy etc Achievements: 1. The single market is one of the European Unions greatest achievements. Restrictions on trade and free competition between member countries have gradually been eliminated, thus helping standards of living to rise. The single market has not yet become a single economy: some sectors (in particular services of general interest) are still subject to national laws. 2. Freedom to provide services is beneficial, as it stimulates economic activity. 3. The financial crisis in 2008-09 has led the EU to tighten up its financial legislation. Over the years the EU has introduced a number of policies (on transport, competition, etc.) to help ensure that as many businesses and consumers as possible benefit from opening up the single market. 4. Citizens of European Union countries can travel, live and work anywhere in the EU. 5. The EU encourages and funds programme, particularly in the fields of education and culture, to bring EU citizens closer together. A sense of belonging to the European Union will develop only gradually, as the EU achieves tangible results and explains more clearly what it is doing for people. People recognize symbols of shared European identity such as the single currency and the European flag and anthem. 6. A European public sphere is beginning to emerge, with Europe-wide political parties. Citizens vote every five years for a new European Parliament, which then votes on the new European Commission.

Future Prospects: The solidarity between Europes peoples and nations must constantly be adapted to deal with new challenges posed by a changing world. Completion of the single market in the early 1990s was a great achievement, but it was not enough. To make the market work effectively, the euro had to be invented making its appearance in 1999. To manage the euro and ensure price stability, the European Central Bank was set up. but the financial crisis of 2008-09 and the debt crisis of 2010 showed that the euro is vulnerable to attack by global speculators. What is needed, in addition to the ECB, is coordination of national economic policies a much closer coordination than currently provided by the Euro group. So, will the EU soon be laying plans for genuinely shared economic governance. The European Union will soon have more than 30 member states, with very different histories, languages and cultures. Can such a diverse family of nations form common political public sphere? Can its citizens develop a shared sense of being European while remaining deeply attached to their country, their region and their local community? Perhaps they can, if todays member states follow the example of the very first European Community the ECSC which was born from the rubble of the Second World War. Its moral legitimacy was based on reconciliation and consolidating the peace between former enemies. It adhered to the principle that all member states, whether large or small, had equal rights and respected minorities. Will it be possible to keep pushing ahead with European integration, claiming that the EUs member states and their peoples all want the same thing? Or will EU leaders make greater use of reinforced cooperation arrangements, whereby ad hoc groups of member states can move ahead without the others in this or that direction? The multiplication of such arrangements could lead to an la carte or variable geometry Europe, with each member state free to choose whether to pursue a particular policy or to be part of a particular institution. This solution might appear attractively simple, but it would be the beginning of the end for the EU, which works by anticipating the common interests of its member states, in both the short and the long term. It is based on the concept of solidarity which means sharing the costs as well as the advantages. It means having common rules and common policies. Exemptions, derogations and opt-outs should be exceptional and of short duration. Transitional arrangements and phasing-in periods may sometimes be necessary, but unless all the member states keep to the same rules and work towards the same goals, solidarity breaks down and the advantages of being in a strong and united Europe are lost. Globalisation obliges Europe to compete not only with its traditional rivals (Japan and the US) but also with fast-rising economic powers such as Brazil, China andIndia. Can it continue restricting access to its single market in order to protect its social and environmental standards? Even if it did so, there would be no escape from the harsh realities of international competition. The only solution is for Europe to become a real global player, acting in unison on the world stage and asserting its interests effectively by speaking with one voice. Progress in this direction can only be achieved by moving towards political union. At the same time, the EU needs to become more democratic. The European Parliament which has been given greater power with each new treaty is directly elected by universal suffrage every five years. But the percentage of the population actually voting in these elections varies from country to country, and the turnout is often low. The challenge for the EUs institutions and national governments is to find better ways of informing and communicating with the public Finally, Europe should punch its full weight in international affairs. One of the EUs great strengths is its ability to spread European values beyond its borders. Values such as respecting human rights, upholding the rule of law, protecting the environment and maintaining social standards in the social

market economy. Imperfect as it is, the EU can hardly claim to be a shining model for the rest of humanity. But to the extent that Europe is successful, other regions will look to it as an example. What would count as success for the EU in the years ahead? Bringing its public finances back into balance. Coping with the ageing of its population in away that does not unfairly penalise the next generation. Finding ethical responses to the huge challenges posed by scientific and technological progress particularly in biotechnology. Ensuring security for its citizens without undermining their freedom. If it can do these things, Europe will continue to be respected and will Conclusion To conclude, the member countries of European Union have benefited in all aspects and will continue to enjoy cheaper transaction costs, reduced currency risks. Consumers and business will enjoy price transparency and increased price based competition. At the same time the unification of Europe can be a danger to many firms in other countries. North American Free Trade Agreement (NAFTA) Introduction: Economic integration refers to a process whereby two or more countries combine into a larger economic group by removing discriminations existing among national frontiers. One of the important types of economic integration is free trade Area. The classic example of Free Trade Area is NAFTA i.e. North American Free Trade Agreement between three countries viz., United States, Canada and Mexico. This process created a trade block based of the continent of North America. The North American Free Trade Agreement took place on January 1st,1994 and took in effect as the Canada superseded between the boarder of United States and Canada. This agreement will remove most of the barriers to trade and investments among the three countries. NAFTA Agreements: Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years. This allowed for an orderly adjustment to free trade with Mexico, with full implementation beginning January 1, 2008. The agricultural provisions of the U.S.-Canada Free Trade Agreement, in effect since 1989, were incorporated into the NAFTA. Under these provisions, all tariffs affecting agricultural trade between the United States and Canada, with a few exceptions for items covered by tariff-rate quotas, were removed by January 1, 1998. Mexico and Canada reached a separate bilateral NAFTA agreement on market access for agricultural products. The Mexican-Canadian agreement eliminated most tariffs either immediately or over 5, 10, or 15 years. Tariffs between the two countries affecting trade in dairy, poultry, eggs, and sugar are maintained. Achievements:Despite its critics, NAFTA's record is clear: by lowering trade barriers, the agreement has expanded trade, increased employment, provided more choices for consumers at competitive prices, and increased prosperity for all three countries.

NAFTA created the world's largest free trade area with about 450 million people and $17 trillion worth of goods and services. Since it came into force in 1994, trade has blossomed, investment has increased, and all three countries have become more competitive. Over 39 million NAFTA related jobs have been created and the benefits of expanding trade have flowed to businesses, farmers, workers, and consumers all over the region. From 1993 to 2008, trade among the NAFTA countries more than tripled, from $288 billion to $902 billion. On average, each one of the NAFTA countries conducts nearly $1.9 billion in daily trilateral trade. NAFTA has been good for Mexico but so it has been for the United States. An interesting success story for the United States is the role that NAFTA has played in making US agricultural goods more competitive. U.S. investors have also found NAFTA an attractive destination for their businesses. The tariff agreements scheduled at the time of NAFTAs signature were implemented either on time or ahead of schedule. As a result, NAFTA has evolved to a more advanced stage of trade facilitation. In 2009 the governments of the three countries defined new and creative ways to further increase trade among themselves. To make North America one of the most economically competitive regions in the world, trade officials agreed to push regulatory cooperation as the new top priority of the agreement. These actions have the potential to strongly reduce costs to businesses and prices to consumers by eliminating unneeded regulatory differences on standards. Looking to all the progress achieved in the past ten years, one is forced to agree that NAFTA works and increases employment and competitiveness in the region. NAFTAs progress and results underline the advantages that a fuller integration would bring to all the countries in the North American region. Failures: NAFTA Production Declines More Than Other World Regions Capacity Utilization Is 30% Below 2008 Levels The Great Recession of 2008-2009 affected the Entire NAFTA Region The Great Recession Has Technically Ended, But The U.S. Economy Still Faces Major Challenges Prospects: More than fifteen years after NAFTAs establishment, there is much evidence of its positive effects on the agricultural sectors and economies of its members. Agricultural trade within the region rapidly expanded, accompanied by tremendous growth in FDI in the agri-food value chains of all three countries. With NAFTA now fully implemented, it is of interest to ask what path NAFTA partners might choose to capitalize on opportunities that freer trade and global markets offer. NAFTA leaders have intermittently floated the idea of a free trade area that would encompass all of the Western Hemisphere. NAFTA members have negotiated separate bilateral and regional trade agreements (RTAs) with countries outside the region. Despite occasional irritants, the overall consensus is that NAFTA has been beneficial for all three members. Convinced that it was through private sector cooperation that regional integration could progress at a faster pace, in March 2006 Mexicos President, Vicente Fox, suggested the constitution of an important working group the North American Competitiveness Council (NACC), composed of top businessmen

from the region. The NACC provides a voice for the trilateral business community and engages the private sector in finding solutions for better integration within NAFTA. The NACC report listed the following priorities to enhance North American competitiveness: Facilitating entry for cargo and reducing border congestion along the borders with Canada and Mexico; Establishing competitive supply chains across North America by developing efficient transportation networks, especially along the northern and southern borders of the United States; Working towards comprehensive integration of the North American automotive industry through more efficient border inspections and greater regulatory cooperation by aligning vehicle safety standards and regulations among the three countries; Implementing a trilateral Intellectual Property Action Strategy for more rigorous protection of intellectual property rights; Enhancing secure alternatives to a passport before the June 2009 date for full implementation of the Western Hemisphere Travel Initiative; Strengthening trilateral communication and cooperation to prevent the entry of unsafe food and products into North America and working to make regulatory and inspection regimes for food and product safety more compatible; Encouraging development of sustainable energy technologies and protection of the environment through private sector cooperation; Ensuring emergency management planning through increased cooperation on emergency protocols, particularly those related to border traffic and prioritization of cross-border shipments during emergencies; and Enhancing cooperation in financial regulation in order to provide more efficient access to capital, to improve the availability and affordability of insurance coverage for cross-border carriers, and to find new ways for cross-border collaboration on investment. No matter what form the future regional partnership may take, the experience over the past two years of the NACC demonstrates the clear benefits of close cooperation on both strategic and specific issues among North Americas business communities, as well as its governments. Other business organizations have extended this cooperation over the past year in launching productive new initiatives addressing issues such as border costs, sector Conclusion: The North American Free Trade Agreement (NAFTA) has enhanced prosperity in all three countries through increased trade and investment, stronger economic growth, and lower prices for consumers. Nonetheless, NAFTAs benefits are not universally understood and the current economic environment of the United States is creating public misperceptions about the value of further regional economic integration. This misperception is unfortunate because it limits possible cooperation between the governments of the three countries in making the region more competitive, its businesses more efficient and the offer of new jobs more sustainable. A regional approach is the only opportunity that NAFTA countries have to strengthen their competitiveness and security. apec

Achievement and Benefits: The Asia-Pacific region has consistently been the most economically dynamic region in the world. Since APEC's inception in 1989, APEC's total trade has grown 395%, significantly outpacing the rest of the world.1 In the same period, GDP (in purchasing power parity terms) in the APEC region has tripled, while GDP in the rest of the world has less than doubled. APEC's work under its three main pillars of activity, Trade and Investment Liberalisation, Business Facilitation and Economic and Technical Cooperation, has helped drive this economic growth and improve employment opportunities and standards of living for the citizens of the region. The important achievement of APEC are: 1) 2) Exports increased by 113 percent to over US$ 2.5 trillion. Foreign direct investment grew by 210 percent overall, and by 475 percent in lower income APEC countries. 3) Real goals national product grow by about a third overall, and by 74 percent in lower income APEC countries. 4) Gross domestic product per person in lower income APEC economies grew by 61 percent. 5) Over 30 bilateral free trade agreements (FTAs) have been concluded between APEC Member Economies. 6) APEC is also pursuing trade and investment liberalisation through its Regional Economic Integration agenda. Progress to date includes: 7) Investigating the prospects of and options for a Free Trade Area of the Asia-Pacific. 8) The development of 15 model measures for RTAs/FTAs that serve as a reference for APEC members to achieve comprehensive and high-quality agreements. 9) APEC has also acted as a catalyst in the advancement of World Trade Organisation multilateral trade negotiations over the past 20 years. 10) APEC is strategically important to the United States because it is a primary venue for multilateral engagement with the Asia-Pacific on economic and other key interests. APECs growing economic importance is clear. The 21 APEC members account for 55 percent of world GDP; 45 percent of global trade; and 40 percent of the worlds population. 11) The Asia-Pacific economies are leading the global recovery, with recent forecasts suggesting that emerging Asian economies could grow by at least 5 percent in 2009 while the G-7 economies contract by 3.5 percent. The other achievements of APEC can be mentioned as below: A. Economic Growth: Since its inception in 1989, the APEC region has been the most economically dynamic part of the world. During its first decade, APEC member countries generated about 70% of global economic growth. B. Benefit to the People in APEC Region: Consumers in Asia-Pacific have both directly and indirectly benefited from the collective and individual actions of APEC member countries. Important direct benefits are increased job opportunities, more training programmes, stronger social safety nets and poverty alleviation. C. Improvements in Information and Telecommunications: In 1990, an average of only 0.6% of those living in APEC member countries were cellular subscribers and only 008 percent used internet. Within a space of 15 years those figures rose to 55 percent and 30 percent, respectively. Since 1990.

D. Benefits to Low Income APEC Countries: Economic growth leads to social advancement. During the first decade of APECs existence the low income APEC countries had the following benefits. a. The United Nations Development Programme (UNDP) Human Development Index for lower income APEC countries improved by about 18 percent. b. Poverty in East Asian APEC countries has fallen by about a third (165 million people), mostly on account of strong economic growth. c. About 195 million new jobs have been created in APEC member countries, including 174 millions in lower income countries. d. Infant mortality has fallen and life expectancy has improved in lower income APEC countries on account of significant improvement in access to sanitation and safe water, and expanding public expenditure on health. e. There has been heavy investment in human capital with rising education enrolment ratios and growing expenditures on education. E. Regional priorities: APEC has also been able to evolve its agenda to include pressing regional priorities. Examples include: counter-terrorism (The Shanghai Statement in 2001, and the CounterTerrorism Task Force); human security (Health Working Group); emergency preparedness (Task Force for Emergency Preparedness); climate change, energy security and clean development (The Sydney Declaration in 2007); and the global financial crisis (The Lima Statement in 2008). F. APEC initiatives to facilitate trade: a. The introduction of electronic/paperless systems by all member economies, covering the payment of duties, and customs and trade-related document processing b. The Single Window Strategic Plan, adopted in 2007, provides a framework for the development of Single Window systems which will allow importers and exporters to submit information to government once, instead of to multiple government agencies, through a single entry point. c. Providing business with a concise one-stop repository of customs and trade facilitation related information for all APEC economies through the APEC Customs and Trade Facilitation Handbook d. The APEC Tariff Database provides users with easy access to APEC member economies' tariff schedules, concessions, prohibitions and other information. e. In 2008, a groundbreaking Investment Facilitation Action Plan was endorsed; it aims to improve the investment environment in Member Economies. f. The APEC Privacy Framework provides guidance and direction to both APEC Member Economies and businesses on implementing information privacy protection policies and procedures. By facilitating information flows it will facilitate trade and e-commerce. g. The APEC Business Travel Card (ABTC) provides substantial time and cost savings to business people and facilitates their travel in the region, by allowing visa free travel and express lane transit at airports in participating economies. h. APEC is also removing behind-the-border barriers to trade through its Structural Reform agenda, which focuses on reforming domestic policies and institutions that adversely affect the operation of markets, and the capacity of businesses to access markets and to operate efficiently. Major Challenges: APEC process may be moving too slowly, because of flexibility.

APEC could be focusing on too many issues. APEC process may be too expensive with costs greater than benefits. APECs progress is not clear, as performance indicators are not provided. APEC continues to be criticized for not doing enough for business and for not convincingly achieve the Bogor Goals.

Future prospects: APECs role is particularly important in the current economic environment. Although nations on both sides of the Pacific have taken individual steps to respond to the economic crisis. APEC is unique in that it already has the tools and focus to ensure regional economic prosperity by promoting policies that will spur long-term economic growth, and ensure all the citizens have the opportunity to thrive in the global economy. It promotes free and open trade and investment, and initiatives to build healthy and resilient economies by tackling such issues as energy security, food security, and preparing workforces for an increasingly competitive global economy. On the economic front, APEC provides the best and most established regional mechanism for practical cooperation and action. With almost half of the G-20 being APEC members, APEC has an important role to play in supporting, reinforcing, and implementing G-20 principles for global economic recovery and future economic growth. APEC is already leading efforts to facilitate reforms that will prevent future crises and improve the business environment throughout the region. Reform efforts include initiatives aimed at improving corporate governance and promoting regulatory reform. APEC is also using the World Banks Ease of Doing Business indicators to spur progress on making it faster, cheaper, and easier to do business in APEC economies, covering such areas as starting a business, obtaining credit, the efficiency of conducting trade, and enforcing contracts. APEC provides a forum for leaders of these economies to coordinate on macroeconomic, financial and structural policies that will promote strong and balanced global demand, led by thriving private sectors. Regarding sustainable growth, including efforts to stem the impact of climate change APEC has an increased role for in advancing energy security and "green" development. APECs human security agenda can make a vital contribution to ensuring the prosperity and resiliency of societies against a multitude of threats. APEC is fostering closer collaboration among regional emergency management agencies, examining the impact of climate change on disaster management, and helping school children prepare for disasters. Going forward, APEC will continue to strengthen public-private partnerships and capacity building for emergency preparedness. APEC is also working to protect the regions financial and economic system from attack and abuse by terrorists. Association of South East Asian Nations (ASEAN) Established 1967. Reasons for creation: No regional group in Southeast Asia before Conflict-resolution: Indonesia-Malaysia conflict called Konfrontasi. Communist rebellions (backed by China and USSR) against pro-Western governments in Thailand, Malaysia, Singapore, Indonesia and Philippines

 Superpower intervention during the Cold War- Indochina Economic Nationalism and underdevelopment Peculiarities of ASEAN ASEAN does not function as a regional trade arrangement, but it has become an effective means for cooperation in economic matters and foreign affairs with Organization for Economic Cooperation and development (OECD)002E There are significant political and religious differences among the countries for example Democracy is well established in the Philippines, Burma (now Myanmar) still continues with its military dictatorship. The regions religions are also varied, consisting of Islam, Buddhism, Christianity and animism. In addition, several countries have a less homogenous population. Despite their political, economic and cultural diversity the countries are recognize their mutual needs to promote the regions development and thus respect each others independence in internal politics. Diverse cultures: Muslim, Buddhist, Christian, Confucian Divergent colonial history: British (Malaysia, Singapore, Myanmar) Dutch (Indonesia) French (Vietnam, Cambodia, Laos) Spanish/American (Philippines) Portugese (East Timor) Different political systems: Military Myanmar), communist (Vietnam, Laos), soft-authoritarian (Malaysia and Singapore), stable democracy (Indonesia), unstable democracy (Thailand and Philippines) parliamentary democracy, presidential democracy Achievements ASEAN 1. Political co-operation: The ASEAN security community is formed to bring ASEANs political and security co-operation to a higher plane to ensure that countries in the region live at peace. At the 1992 Singapore summit, the SEAN leaders declared that ASEAN will move towards a higher plan of political co-operation to secure regional peace and prosperity. 2. Economic co-operation: When ASEAN was established, trade among the member countries was insignificant. To tackle this, the Preferential Trading Agreement (PTA) was established in 1977 and further, ASEAN Free Trade Area (AFTA) was launched in 1992. The elimination of tariffs and non-tariff barriers among the member countries promoted greater economic efficiency productivity and competitiveness. In 1997 the ASEAN Leaders adopted the ASEAN vision 2020, which aimed at creating a stable, prosperous and highly competitive ASEAN Economic Region in which there is free flow of goods, service, investments, capital etc. 3. Other achievements: o No major conflict among members since founding

o o o

Inclusive membership: Vietnam joining in 1995 key development Key role in the resolution of Cambodia conflict Engaging all the major powers of the world China, US, Japan, India, Russia, EU) through dialogue and cooperation In this way, as a result of this greater regional integration ASEAN has helped the member countries in all directions. Problems: Economic Cooperation: intra-ASEAN trade still around 25% of total trade, mechanisms for financial crisis untested Persisting Intra-ASEAN Conflicts: Thailand-Cambodia, Singapore-Malaysia, Maritime disputes South China Sea Dispute: China, Vietnam, Philippines, Malaysia, Brunei, and Taiwan Transnational Threats: Environmental degradation, Deforestation and haze problem, Piracy, Terrorism, Drug trafficking, People Smuggling, Natural disasters Recent developments; Community-Building (Bali Concord II-2003) ASEAN Economic Community (Free Trade and customs Union, investment area) ASEAN Political-Security Community (Conflict resolution, Cooperation against common challenges such as terrorism, piracy, disaster management, etc) ASEAN Socio-Cultural Community (peoples ASEAN, caring and sharing ASEAN) ASEAN Charter (2008)-legal personality, consolidation of treaties and agreements, compliance enforcement East Asian Summit (2005). New reigonal architecture; Now includes US and Russia Challenges: Rise of China and India, a multipolar world Increasing burden: scope of issues, and membership, and partnerships Sovereignty and non-Interference in an age of globalization and transnational challenges Compliance with new rules and the Charter: National interest version regional interest ASEANs unity and cohesion 2. TARIFFS

The duties or taxes levied on goods imported or exported are called as tariffs. Generally, tariffs are a schedule of custom duties levied upon the imports. In a broader sense, however, tariffs include all customs duties: import duties, export duties and transit duties. Amongst these, as a restrictive measure, import duties are the most common. Classification of tariffs: There are different ways of classifying tariffs or customs duties. Using the levy criterion, tariffs may be classified into; i) specific duties, ii) ad valorem duties, iii) combined specific and ad valorem duties, and iv) sliding scale duties. 1. Specific duties are flat levies per physical unit (metro, kilo, ton, etc) of the commodity imported. 2. Ad valorem duties are, on the other hand, levied as fixed percentage of the value of the imported commodity.

3. Combined specific and ad valorem duties, when imposed, specify that one or the other, usually whichever involves lower charge, is payable at the customs. 4. Sliding scale duties are those which tend to vary with the price of the commodity imported. These may be either specific or ad valorem. Specific sliding scale duties are, however, common in practise. Another important classification of tariffs is based on the purpose they serve. Using the objective criterion, tariffs are distinguished as: i) Revenue Duties, and ii) Protective Duties. 5. Revenue tariffs are those whose primary purpose is to provide revenue to the state. These are generally at a lower rate and not intended to exclude imports. They are usually levied on imports of consumption goods. 6. Protective tariffs, on the other hand, are designed to curtail imports of certain goods to protect domestic production. Effects of tariffs Tariffs can affect import volume, prices, production and consumption. They also affect the terms of trade, the balance payments etc. the various effects of tariffs have been discussed in the following sections. For this purpose, we may draw a diagram of partial equilibrium framework relating to the market for a particular commodity. In the following diagram, we have assumed that demand and supply relationships of commodity X are given and remain unchanged throughout the analysis. Factors influencing demand such as income, tastes , habits of consumers are constant and prices of substitutes remain unchanged. Similarly, there is no change in technology, no change in factor prices, or no such other changes which may affect the supply position. Effects of Tariff 1. Price Effect Assuming that the foreign price of a commodity is unchanged, we find that the price in the tariffimposed nation would rise by the full amount of the tariff duty. Increase in the price of a commodity imported due to imposition of tariff is called the price effect. Diagrammatically, thus P1P2 price-rise is the price effect in the above figure. In this case, the incidence of tariff falls on the domestic consumers.The exact price effect thus depends upon the volume and elasticity of supply and demand in the trading countries. The elasticity of supply, however, depends upon the costs conditions-constant, increasing or decreasing-which play an important role in determining the price effect of the tariff. 2. The protective effect A tariff is a restrictive measure which seeks to control the quantity of import so that domestic industry may be protected. a tariff duty is purely protective only if it is so high as to prohibit total imports of a commodity. In practise, however, in its restrictive effect upon the quantity of imports, tariffs, no matter how high, need not prove absolutely protective. Obviously, any imports may flow in after the payment of duties, unless regulated otherwise. The protective effect of a tariff can be seen in the expansion of domestic production of a commodity which becomes possible due to rise in prices in the domestic market. High prices enable the home producers to cover their high rising marginal costs on a larger output. In the

above figure, the tariff by raising domestic price to a higher level from P1 to P2 enables domestic producers to increase production from M1 to M2. This increased production M1M2 measures the protective effect of the tariff in terms of domestic production alone. However, the protective effect in money terms can also be seen from the producers increased receipts. Out of the total increase in receipts P1P2 a d, the triangular areas a d e is the purely protective effect of tariff. This a d e portion of receipts enables producers to cover their marginal costs on the larger output. 3. Revenue effect Tariffs which are not totally prohibitive certainly bring some revenue to the state. Usually, the government collects customers revenue equal to the duty multiplied by the volume of imports. Increase in the total revenue of the government due to imposition of tariff is called the revenue effect. In the above figure, if import duty is fixed at P1P3 which is extremely high and prohibits imports, it has zero revenue effect. But if it is reasonably put like P1P2, then the imports would be M2M3. Thus, revenue effect may be measured by the rectangular area a b c d. 4. Transfer or redistribution effect After the imposition of a tariff, domestic prices will rise; hence receipts of producers will increase, while consumers surplus to that extent declines. This is called transfer effect or redistribution effect. Thus the increase in receipts which is in excess of marginal costs is an to the producers, which is derived by subtraction from consumers surplus. In the above figure, with the rise in domestic price by P1 P2 and expansion in the sale of domestic output of X upto OM2, producers additional revenue increases by P1P2 a d, out of which the area a d e is to be deducted to meet the increase in costs of increased output. Hence, the area P 1P2 a e is the net excess earnings remaining with the producers. It may be described as redistribution effect. 5. Consumption effect A tariff generally reduces the total consumption of a commodity because of the rise in its price. Decrease in the total consumption of a commodity in the importing country due to imposition of tariff is called the consumption effect. In the above figure, the consumption effect of the tariff is the reduction in total consumption by M3M4. Thus, there is a loss in consumers satisfaction shown by the difference between the possible total utility of larger quantity at a lower price, and the actual total quantity brought at a higher price after tariff. It is the real cost of tariff out of the gross loss in consumers satisfactio n, the revenue received by the state and transferred to producer should be deducted to find the societys net loss in consumer satisfaction as a result of tariff. This net loss is represented by the area a d e and b c f in the diagram. 6. Terms of trade effect

The imposition of a tariff may serve to improve a countrys terms of trade (i.e, the amount of imports it receives in exchange for a given quantity of exports). Thus the tariff can do easily when the foreign demand for the exports of the tariff imposing country is both large and inelastic. In such a situation, the effect of tariff is to reduce imports to some extent, thereby making it difficult for foreigners to earn (through their exports to this country) for their imports from the country. 7. Balance of payments effects When a tariff affects the volume of imports and prices, it also affects the countrys balance of payments position. A country having a deficit balance of payments position can restore and maintain equilibrium by means of tariff restrictions upon imports. Tariffs restrict imports through price rise and contraction in demand, and may lead to improvement in terms of trade also under appropriate circumstances, which helps in bringing about a balance of merchandise accounts. 8. Income and employment effect The imposition of tariff would lead to expansion of employment and incomes. This is called as the income and employment effect. By reducing imports, tariffs stimulate employment and output in the import-competing industries. A new flow of income will be generated with its multiplier effect. In an expanding economy, more capital goods investment will also be made which produces acceleration effect. Thus under conditions of less than full employment, the interaction of multiplier-accelerator will lead to a cumulative expansion of investment, employment, output and income in the country. Another possible impact of tariffs is that the imposition of tariff duties may attract foreign capital in the country concerned, when they find that they may lose market for their products in the country due to contraction of import demand and expansion of home industries under the protective effects of tariffs.

1. MISCELLANEOUS PROTECTION TECHNOLOGIES A. DUMPING Meaning of Dumping: Dumping, in economic terms, is when a country lowers the sales price of one of its exports for the express purpose of gaining unfair market share in that industry in another country. The exporter usually lowers the price below what it would sell for at home, and sometimes even below its actual cost to produce. The main advantage of dumping is being able to sell at this unfairly competitive lower price. Generally a country will have to give the exporting businesses a huge subsidy to enable them to sell the export below cost. The country is willing to take a loss on the product to increase its comparable advantage in that industry. It may do this because it wants to create jobs for its residents. It often uses dumping as an attack on the other country's industry, in the hopes of putting that country's producers out of business,

and dominating that industry. The main disadvantage of dumping is that it's very expensive to maintain. It can take years for dumping to work. Meanwhile, the cost of subsidies can add to the export country's sovereign debt. The second disadvantage is retaliation by the trade partner. This can lead to trade restrictions and tariffs. The third is censure by international trade B.SUBSIDIES Meaning and definition The most basic form of a subsidy, and the one that still defines a subsidy in some dictionaries, is a cash payment or grant. Although few grants are paid out in currency any more (most are paid via cheque or bank transfer), it is still common to refer to them as "cash" grants, payments or subsidies. Normally, a grant refers to a time-limited payment, either in connection with a specific investment, or to enable an individual, company or organization to cover some or all of its general costs, or costs of undertaking a specific activity, such as research. Other direct payments may be linked to the volume of production or sales. In previous centuries, and still in Australia, these types of subsidies were called bounties. They are far from archaic, however. In some states of the United States, for example, companies producing liquid biofuels receive direct subsidies for every gallon of ethanol they produce. Cash payments to producers are also sometimes linked to prices. The main form is a deficiency payment, which makes up the difference between a target price for a good (typically an agricultural commodity) and the actual price received in the market. Various cash subsidies are paid to workers. Canada, for example, provides targeted wage subsidies to assist individuals to prepare for, obtain and maintain employment. Many countries provide grants in order to encourage people who are out of work to undergo training in new skills.

Consumers also benefit from direct payments or vouchers, particularly for the purchase of necessities, like food, medicine or heating fuels. Alternatively, a government may regulate the consumer price for a good or service, and instead pay a subsidy to the supplier of that good or service, to cover its losses. A. RECENT TRENDS IN GLOBAL TRADE International trade plays very important role in economic development The global economy has grown continuously since the Second World War. Global growth has been accompanied by rise in global trade and a change in the pattern of trade, which reflects ongoing changes in structure of the global economy. The past few decades have seen important changes in trends and pattern of global trade In recent years, the expansion in trade is mostly in non commodity exports, especially of high-technology

products such as computers and electronics. It is also characterized by growing regional concentration and an ongoing shift of technology content. The following trends highlights the changing trends in global trade. 1. Expansion in global trade: World trade has grown steadily since World War II, with the expansion accelerating over the past decade. The world merchandise exports have increased from US $ 3395.4 billion in 1990 to US $ 15763.3 billion in 2008, i.e. by 4.6 times, and it has fallen to US $ 12177.6 billion in 2009 due to financiall crisis. The same trend is seen with respect to developed and developing countries. The merchandise exports of developed countries have risen from US $ 2496.6 billion in 1990 to US $ 9044.7 billion in 2008 i.e. by 3.6 times, but fell to US $ 7019.4 billion in 2009. The merchandise exports of developing countries increased from US $ 793.4 billion in 1990 to US $ 6015.9 billion in 2008 i.e. by 7.6 times, but declined to US $ 4706.7 billion in 2009. This is shown in the following table 1. Table .1 : World Merchandise Exports (US $ billion) Year 1990 1995 2000 2008 2009 World 3395.4 5017.7 6277.2 15763.3 J2177.6 Developed Countries 2496.6 3536.2 4212.4 9044.7 7019.4 Source: WTO 2011 The following factors are responsible for expansion in global trade. 1. The rise of emerging market economies (EMEs) as systemically important trading partners. 2. The growing importance of regional trade. 3. The shift of higher technology exports toward dynamic EMEs; (iv) the growing role of global supply chains. 4. The rising trade liberalization since the early 1950s. 5. Decline in shipping, transportation and communication costs. .Developing Countries 793.4 1284.0 1919.1 6015.9 4706.7

2. Growth in Merchandise trade: During the period 1999-2009, the average annual growth of merchandise trade in volume (real terms) in the world was 9.6 percent. The average annual growth of merchandise trade was below the world average in high income countries (8.1 per cent) and the European Union (9.1 per cent). On the other

hand, it was above the world average in low- and middle-income countries (14.6 per cent). China experienced an average annual growth of 21.9 percent in merchandise trade during 1999-2009, while India had 17.2 per cent annual average growth in merchandise trade in the same period. The leading Exporters and Importers in Merchandise trade in 2010 is shown in Table 2. Table 2 : Leading Exporters and Importer in Merchandise Trade in 2010 Rank Exporters Value (in US $ billion) 1 2 3 4 20 China US Germany Japan India 1578 1278 1269 770 216 Share (%) Rank Importers Value (in US $ billion) Share (%)

10.4 8.4 8.3 5.1 1.4

1 2 3 4 13

US China Germany Japan India

1968 1395 1067 693 323

12.8 9.1 6.9 4.5 2.1

Source: World Trade Report 2011, WTO If we ignore trade between the 27 European Union members and treat the EU as a single entity, the leading exporters were the European Union (US $ I. 79 trillion, or 15 per cent of the total), China (13 per cent), the United States (II per cent), Japan (6.5 per cent) and the Republic of Korea (4 per cent). The top importers excluding trade within the EU were the European Union (US $ 1.98 trillion or 16.5 per cent of world imports), the United States (16 per cent), China (12 per cent), Japan (6 per cent) and die Republic of Korea (US $ 425 billion, 3.5 per cent). 3. Trade between high income economies and low-and middle income economies: Developing economies are becoming increasingly important in the global trading system. Since the early 1990s trade between high-income economies and low- and middle-income economies has grown faster than trade among high-income economies. The trade among low- and middle-income economies (i.e. developing countries) accounted for about 9.2 % of the world's merchandise trade in 2009, compared with 4.5% in 1996. The share of trade from low- and middle income economies to high-income economies increased from 14.1 per cent in 1996 to 19.7 per cent in 2009. Trade flows between high-income and low- and middle-income economies reflect the changing mix of exports to and imports from developing economies. While food and primary commodities have continued to fall as a share of high-income economies'- imports, manufactures as a share of goods imports from both low- and middle-income economies have grown. And trade between developing

economies has grown substantially over the past decade, a result of their increasing share of world output and liberalization of trade. Low-income economies specialize in labor-intensive sectors, but their share in the global market of labor intensive products is very small. Lower middle income economies provided most of the textiles, clothing, and footwear traded globally in 2009. High-income economies accounted for the majority of trade in agricultural products and manufactured goods. 4. Rising importance of developing countries in global trade: Developing economies are an increasingly important part of the global trading system. Their share of world trade rose from 15 percent in 1990 to 30 percent in 2009. Developing economies' share of world exports is continuing a rising trend from 19 percent in 2000 to 27 percent in 2009. It is observed that developing countries are increasingly becoming an important destination for the exports of developed countries. 5. Trade in services: Trade in services makes up 22 percent of world Trade in 2010, up from 20 percent in 2000. In developing economies the nominal value of trade in services grew 16 percent a year over 2000-09, doubling the rate of growth over 1990-2000. It has surpassed that of high-income economies, which grew at 11 percent a year over 2000-09. The leading exporters in world trade in commercial services in 2010 are US, Germany, UK and China and the leading importers in world trade in services in 2010 are US followed by Germany, China, and UK. India ranks tenth in exports and 7th in imports. The leading Exporters and Importers in World Trade in Commercial Services in 2010 is shown in Table 3. Table 3 : Leading Exporters and Importer in World Trade in Commercial Services in 2010 Rank Exporters Value (in US $ billion) 1 2 3 4 10 US Germany UK China India 515 230 227 _ 170 110 Share (%) Rank Importers Value(in US $ billion) Share (%)

14.1 6.3 6.2 4.6 3.0

1 2 3 4 7

US Germany China UK India

358 256 192 156 117

10.2 7.3 5.5 4.5 3.3

Source: World Trade Report 2011, WTO

6. Terms of trade of developing and transition economies: The large terms-of-trade fluctuations of the past few years have had large effects on national income and the balance of trade of many economies. Countries lacking the means (such as adequate foreignexchange reserves or stabilization funds) to cope with swings of this magnitude tend to suffer adverse long-term growth consequences because of the macroeconomic volatility caused by these shocks. B. TRENDS IN GLOBAL TRADE DURING THE FINANCIAL CRISIS AND THE POST CRISIS The financial crisis that struck high-income economies in 2008 reached low- and middle-income economies in 2009. The low income group countries and developing countries recovered much faster after the financial crisis than the rich and developed countries. The changing trends during the financial crisis and post financial crisis can be discussed as below: World exports of goods and services fell 20 percent, from $ 19.6 trillion in 2008 to $ 15.6 trillion in 2009, more in high-income economies and somewhat less in low- and middle-income economies. Imports of goods and services by high-income economies fell 22 percent, from $ 14.0 trillion in 2008 to $ 10.9 trillion in 2009; imports by low and middle income economies fell 19 percent. World trade had declined by more than 11 per cent in 2009. The global output grew by 3.6 per cent in 2010 and it was accompanied by expansion of the worldwide volume of exports and imports of goods and services. The turnaround in trade took place in mid-2009. The recovery was particularly strong between mid-2009 and mid-2010 when the trade volume increased at an annualized rate of nearly 20 per cent. World trade recorded its largest ever annual increase in 2010 as merchandise exports surged 14.5 percent, Since then, however, world trade growth has lost steam along with the slowdown in the recovery of the world economy. Both trade and output grew faster in developing economies than in developed ones in 2010. Exports in volume terms ( in real terms) were up 13 percent in developed economies while the increase for developing economies was nearly 17 per cent. The difference between trade of developed and developing economies was even greater on the import side, where developed economies' imports rose by 11 per cent compared with 18 per cent in the rest of the world. Developing countries have been leading the recovery in international trade in 2010, in line with the stronger expansion of their economies. By September 2010, the trade volume of this group as a whole had already surpassed the pre-crisis peak of April 2008 by 7 per cent, owing in particular to strong trade growth in developing Asia. At the same time, trade by developed economies was still 9 per cent below the pre-crisis peak. As a result, the developing countries' share in global trade increased from about one third to more than 40 per cent-between 2008 and 2010. World trade in services has been severely hit by the financial and economic crisis. It is presumed to have recovered during 2010.UNCTAD data indicate that the value of international trade in services fell by 12 per cent in. 2009. But it was less than the 23 per cent decline in merchandise trade during the same year. The weaker downturn in services trade during the global crisis could reflect a lesser

dependence on intermediate inputs as much as a lesser reliance on trade finance of certain services sectors like communications. During 2009, international trade in services decreased by 13 per cent in developed countries, by 10 per cent in developing countries and by 17 per cent in the economies in transition. The worst performance of the economies in transition reflects a greater contraction in all services sectors, but especially those related to construction, travel and transportation. Primary commodity prices have fluctuated strongly compared with prices of manufactures in 2009 and 2010. As a result, countries specializing in exports of primary commodities and those with high shares of imports of energy, food and industrial raw materials have had large swings in their terms of trade. During 2010, the terms of trade of the fuel exporters and exporters of minerals and mining products improved significantly along with rebounding commodity prices, but remained below the peaks reached in 2008 and 2007, respectively. On the other hand, exporters of manufactures saw part of the gains in their terms of trade. In 2010, exporters of agricultural products experienced an increase in the unit prices of both their exports and imports but, on balance, saw a modest improvement in their terms of trade. The countries that are net food importers and that do not export oil or mining products on a significant scale suffered a slight deterioration in their terms of trade during 2010 .. The economies in transition, Africa, Western Asia and Latin America and the Caribbean saw a significant rebound in their terms of trade in 2010.. They had suffered important losses in 2009 following trends in primary commodity prices. The predominantly manufactured exports in East and South Asia, in contrast, saw stagnant or slightly declining terms of trade in 2010. They had a modest improvement during the global recession in 2009. Similarly, developed countries saw little movement, on average, in their terms of trade. Trade imbalances of leading economies widened in 2010, as exports and imports bounced back from their depressed levels of 2009. However, for most countries the gap between exports and imports was smaller after the crisis than before. The trade deficit of US for the year 2010 increased 26 per cent compared with 2009. However, the 2010 deficit of roughly US $ 690 billion was 22 per cent less than.the corresponding deficit of US $ 882 billion in 2008. China's merchandise trade surplus for 2010 totalled US $ 183 billion, roughly 7 per cent less than the US $ 196 billion it recorded in 2009, and 39 per cent less than the nearly US $ 300 billion surplus of 2008. The European Union had a trade deficit with the rest of the world of US$ 190 billion in 2010, which was up 26 per cent from 2009 but down 49 per cent from the US$ 375 billion it recorded in 2008. Japan was an exception to the trend towards smaller trade deficits/surpluses after the financial crisis. In 2008 the country recorded a US$ 19 billion surplus of exports over imports, but this nearly quadrupled to US$ 77 billion in 2010. C. CHANGING PATTERNS OF GLOBAL TRADE

The world trade has grown steadily since World War II. As a share of global output, trade is now at almost three times the level in the early 1950s. A large part of it is dlriven by the integration of rapidly growing emerging market economies (EMEs). The expansion in trade is mostly accounted for by the growth in non-commodity exports, especially of high-technology products such as computers and electronics. These developments in global trade are changing the global trade patterns. According to IMF studies, the following patterns in global trade is observed : 1. Emergence of new players in global trade: Emerging market economies have moved from peripheral players to major centers of global trade. In the early 1970s, trade was largely confined to a handful of advanced economies, notably the United States, Germany, arid Japan. They together accounted for more than a third of global trade in the early 1970s. By 1990, the global trading landscape had become more diversified to include several EMEs, especially in East Asia. By 2010, China became the second largest trading partner after the United States, overtaking Germany and Japan. 2. The structure of trade: The structure of trade has been characterized by a rising share of higher technology goods. The contribution of high-technology and medium-high-technology exports such as machinery and transport equipment increased, whereas that of lower technology products such as textiles declined. Technology-intensive export structures generally offer better prospects for future economic growth. Trade in high-technology products tends to grow faster than average, and has larger spillover effects on skills and knowledge intensive activities. 3. Growing Trade Interconnectedness: Growth in trade interconnectedness has increased the crossborder transmission of shocks through the trade channel. The IMF study shows the following important trends underlying the global trade network during 1999 and 2009. There has been a marked shift in the relative rankings of individual countries, with China moving to first place in 2009 up from ninth in 1999. China has emerged as a major systemically important trading center 'along with the United States, gaining prominence not only in terms of size but also by increasing the number of its significant trading partners. There has been a marked shift in the roles of China and Japan as strategic export destinations, with China surpassing Japan as a more significant regional and. global consumer. European countries have retained their importance as "central" in the global trade network, owing more to their interconnectedness than size. 4. Strong interconnectedness between trade and financial sectors: There is strong overlap between countries with trade and financial sectors of systemic importance. The IMF study shows there is an almost perfect overlap between the top 25 jurisdictions with systemic financial sectors and the top 25 jurisdictions with systemic trade sectors in 2009. The only exceptions are Luxembourg and Ireland, whose systemic importance is limited only to the financial sector, and Malaysia and Thailand, whose systemic importance is limited only to the trade sector. 5. The Growing Role of Global Supply Chains: It has been observed countries that are part of a global supply chain are expected to have a higher share of imported content in their exports because their exports rely on importing intermediate inputs from other supply chain partners.

6. Change in Technology composition of Exporters : Changes in the technology composition of exports confirm the rise of merging markets in global trade in high-technology products. Between 1995 and 2008, the contribution of high-technology exports to overall export growth was more than 30 percent for China, compared with 26 percent for the United States, 17 percent for Germany, and only 11 percent for Japan. However, adjusting exports to exclude foreign content and show more clearly the domestic content of exports yields a somewhat different picture. In (his case the contribution of high-technology exports to overall export growth is now much lower in China (24 percent), whereas that of the United States rises to 29 percent and Germany to 20 percent. 7. Rising uniformity in Exports: Export structures of EMEs are becoming increasingly similar to those of advanced economies. As China and other EMEs increasing their presence in sectors traditionally dominated by advanced countries, the similarity in export structures has increased. This has increased the competitive pressure. 8. The impact of relative price change: The emergence of global supply chains is likely to change the way trade responds to relative price changes. Higher imported content in exports is likely to lower the sensitivity of trade to changes in the exchange rate. For instance an appreciation of the domestic currency against all trading partners implies that while exports become more expensive, imported intermediates also become cheaper, mitigating the impact of relative price changes on trade. Advanced countries whose exports tend to be concentrated in medium-high-technology goods are therefore likely to be more sensitive to relative price changes because of higher domestic value added (DVA), whereas those of EMEs are likely to be less sensitive. 7. Changes in global order: The integration of rapidly growing EMEs is likely to induce a gradual shift in the sources of global demand away from advanced economies to EMEs. Since China has overtaken Japan as the second largest economy in the world in 2010, East Asian countries are likely to emerge as the largest trading bloc by 2015, surpassing NAFTA and the Euro area. The global trade has changed over the past few decades. It has lead to increased interconnectedness and strengthened trade new trade relations. The numbers of new key players has increased, but there has been a shift in their importance in global Trade. The relative importance has changed from advanced economies such as Japan and the United Kingdom to EMEs like China and India The growing role of global supply chains is associated with increased in interconnectedness. There is also strong interconnectedness between trade and financial centers. E. AGRICULTURE AND MARKET ACCESS INTRODUCTION: Before the conclusion of the Uruguay Round, multilateral discipline did not govern trade in agricultural products, and the agricultural sector remained one of the most protected in several industrial countries. Farm price supports and quantitative restrictions resulted in the production of large surpluses which were exported with heavy subsidies, thereby depressing international prices. Some developing countries have also pursued distortional policies toward this sector.

AGREEMENT ON AGRICULTURE: The Uruguay Round Agreement on Agriculture aims to establish a market-oriented agricultural trading system. A reform process should be initiated for this through negotiation of commitments on support and protection and through the establishment of strengthened and more operational rules especially through three types of measures, viz. The elimination of non-tariff border measures such as quantitative restrictions and variables levies, minimum market access commitments, and Reduction of subsidies. There are three types of provisions in the Agreement which are related to agriculture. They are trade in agricultural goods, agricultural policies which have a bearing on trade and patenting of seed plants and micro organisms. The main features of the agreement on agriculture relate to improving transparency and market access, and reducing export subsidies and domestic support. Distinctions are also made between the commitments required of developed and developing countries. A significant achievement of the Uruguay Round is to arrive at an agreement to reduce export subsidies and domestic support to agriculture. The developed countries were expected to reduce the bound tariffs by 24 percent with a minimum reduction of 15 percent for each commodity over a period of 6 years. The developing countries were expected to reduce the bound tariffs by 24 percent with a minimum reduction of 10 percent for each commodity over a period of 10 years. The least developed countries are exempt from any tariff reduction. The obligation of tariffication of NTBs did not apply to restrictions maintained by developing countries having balance of payment difficulties. However they were required to bind their tariffs. MARKET ACCESS TO AGRICULTURE: On the market access to Agriculture, the Uruguay Round resulted in a key systemic change: the switch from a situation where a myriad of non-tariff measures impeded agricultural trade flows to a regime of bound tariff-only protection plus reduction commitments. The key aspects of this fundamental change have been to stimulate investment, production and trade in agriculture by Making agricultural market access conditions more transparent, predictable and competitive, Establishing or strengthening the link between national and international agricultural markets, and thus (iii) Relying more prominently on the market for guiding scarce resources into their most productive uses both within the agricultural sector and economy-wide. PROVISIONS UNDER WTO FOR MARKET ACCESS TO AGRICULTURE: 1.Only Tariff barrier :In many cases, tariffs were the only form of protection for agricultural products. For many other products, however, market access restrictions involved non-tariff barriers. The Uruguay Round negotiations aimed to remove such barriers. For this purpose, a "tariffication" package was (i) (ii)

agreed which, amongst other things, provided for the replacement of agriculture-specific non-tariff measures with a tariff which afforded an equivalent level of protection. Following the entry into force of the Agreement on Agriculture, there is now a prohibition on agriculture-specific non-tariff measures, and the tariffs on virtually all agricultural products traded internationally are bound in the WTO. 2. Schedule of tariff concessions : Each WTO Member has a "schedule" of tariff concessions covering all agricultural products. These concessions are an integral part of the results of the Uruguay Round. The schedule sets out for each individual agricultural product, or, in some cases agricultural products defined more generally, the maximum tariff that can be applied on imports into the territory of the Member concerned. The tariffs in the schedules include those that resulted from the tariffication process, which, in many cases, are considerably higher than industrial tariffs, reflecting the incidence of agriculture specific non-tariff measures prior to the WTO. Many developing countries have bound their previously unbound tariffs at "ceiling" levels, i.e. at levels higher than the applied rates prior to the WTO. 3. Minimum access opportunities : As part of the tariffication package, WTO Members were required to maintain, for tariffied products, current import access opportunities at levels corresponding to those existing during the 1986-88 base period. Where such "current" access had been less than 5 per cent of domestic consumption of the product in question in the base period, an (additional) minimum access opportunity had to be opened on a most-favoured-nation basis. This was to ensure that in 1995, current and minimum access opportunities combined represented at least 3 per cent of base period consumption and are progressively expanded to reach 5 per cent of that consumption in the year 2000 (developed country Members) or 2004 (developing country Members), respectively. The current and minimum access opportunities are generally implemented in the form of tariff quotas. In case of minimum access, the applicable duty was required to be low or minimal, low that is either in absolute terms or, at least, in relation to the "normal" ordinary customs duty that applies to any imports outside the tariff quota. 4. The prohibition of non-tariff barrier measures : Article 4.2 of the Agreement on Agriculture prohibits the use of agriculture specific non-tariff measures. Such measures include quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing procedures, voluntary export restraint agreements and non-tariff measures maintained through state-trading enterprises. All similar border measures other than "normal customs duties" are also no longer permitted. 5. Special treatment :The Agreement on Agriculture contains a "special treatment" clause under which four countries were permitted, subject to strictly circumscribed conditions, to maintain non-tariff border measures on certain products during the period of tariff reductions (with the possibility of extending the special treatment, subject to further negotiations). As one of the conditions, market access in the form of progressively increasing import quotas has to be provided for the products concerned. The products and countries concerned are: rice in the case of Japan, Korea and the Philippines; and cheese and sheep meat in the case of Israel. As of 1 April 1999, Japan has ceased to apply special treatment.

6. The special safeguard provisions: As a third element of the tariffication package, Members have the right to invoke for tariffied products the special safeguard provisions of the Agreement on Agriculture (Article 5), provided that a reservation to this effect ("SSG") appears beside the products concerned in the relevant Member's schedule. The rights to make use of the special safeguard provisions has been reserved by 38 Members, and for a limited number of products in each case. The special safeguard provisions allow the imposition of an additional tariff where certain criteria are met. 7. Notification obligations: The bound agricultural tariffs and the tariff quota commitments are contained in Members' schedules. There is no requirement for Members to notify their tariffs to the Committee on Agriculture. Applied tariffs are, however, to be submitted to other bodies of the WTO, including the Committee on Market Access and in the context of the Trade Policy Review mechanism. Members with tariff quotas and the right to use the special safeguard provisions are required to make both ad hoc and annual notifications to the Committee on Agriculture. At the beginning of the implementation period, an "up-front" notification was due, setting out how each tariff quota is to be administered. IMPACT OF W.T.O. AGREEMENTS ON MARKET ACCESS TO AGRICULTURAL TRADE: The Agreement on Agriculture (AoA) under W.T.O was expected to liberalise trade in agriculture. Opening up of markets of developed countries by reducing trade barriers would help the developing countries to realize their comparative advantage in agriculture. The following observations can be made in connection with market access to agriculture. Unfortunately the developed countries did not reduce the barriers to the extent that should have been. This prevented the poor nations an access to developed countries market. On the contrary the developing countries opened up their market more than the rich countries. Reduction in support as per W.T.O rules expected to increase and stabilise agricultural prices. However in the post W.T.O era, prices of agricultural products have become very unstable. Liberal trade in food grains was to eliminate problems associated with food security. Unfortunately in the post W.T.O period food security problem has become more serious specially in Sub-Saharan Africa. The developed economies were to allow 3 - 5 percent market access to the imports. Most of these countries are yet to reach the target. Agricultural support provided under the red and amber boxes was expected to be eliminated within a given period. Most of the developed countries have shifted such support measures to the blue box by bringing in some technical changes. This has defeated the very purpose of having an equal level playing field between the rich and poor countries. W.T.O is dominated by the developed countries. With their access to research and information available, they are in a position to bargain and obtain a better deal from other members. The advanced countries, in particular, U.S.A, EU and Japan continue t~ be large subsidisers of agriculture and have failed to come down to the level prescribed by the W.T.O. The IPR (Intellectual Property Rights) granted by the W.T.O enables many MNCs to acquire patent rights on seeds and plants which enable them have a monopoly power. This will restrict the market access to poor farmers from the developing countries Developing countries will find it very difficult to open up their market as expected by the W.T.O as they fear that developed countries may sell their agricultural products at a low price by

subsidizing them. Such a situation may create serious economic problems for small and marginal farmers of the poor countries. CONCLUSION: Currently the W.T.O negotiations pertaining to agriculture are not making any progress. Developed countries do not show any inclination to reduce the domestic support to their farmers. Their domestic market is still restricted to outsiders. The developing countries fear that the demand made by the developed countries will endanger the food security, livelihood security and rural development of their economies. F. TRADE AND ENVIRONMENTAL ISSUES INTRODUCTION: Sustainable development and protection and preservation of the environment are fundamental goals of the WTO. They are enshrined in the Marrakesh Agreement, which established the WTO, and complement the WTOs objective to reduce trade barriers and eliminate discriminatory treatment in international trade relations. While there is no specific agreement dealing with the environment, under WTO rules members can adopt trade-related measures aimed at protecting the environment provided a number of conditions to avoid the misuse of such measures for protectionist ends are fulfilled. The WTO contributes to protection and preservation of the environment through its objective of trade openness, through its rules and enforcement mechanism, through work in different WTO bodies, and through ongoing efforts under the Doha Development Agenda. The Doha Agenda includes specific negotiations on trade and environment and some tasks assigned to the regular Trade and Environment Committee. Sustainable development and environmental protection Allowing for the optimal use of the worlds resources in accordance with the objective of sustainable development and seeking to protect and preserve the environment are fundamental to the WTO. These goals, enshrined in the Preamble of the Marrakesh Agreement, go hand in hand with the WTOs objective to reduce trade barriers and eliminate discriminatory treatment in international trade relations. For WTO members, the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, on the one hand, and acting for the protection of the environment and the promotion of sustainable development, on the other, can and must be mutually supportive. Trade liberalization and the environment An important element of the WTOs contribution to sustainable development and protection of the environment comes in the form of furthering trade opening in goods and services to promote economic development, and by providing stable and predictable conditions that enhance the possibility of innovation. This promotes the efficient allocation of resources, economic growth and increased income levels that in turn provide additional possibilities for protecting the environment. WTO rules and environmental protection: The commitment of WTO members to sustainable development and the environment can also be seen in WTO rules. In general terms the rules, with their fundamental principles of non-discrimination, transparency and predictability, help set the framework for members to design and implement measures to address environmental concerns. Moreover, WTO rules, including specialized agreements

such as the Agreement on Technical Barriers to trade and the agreement of Sanitary and Phytos sanitary measures, provide scope for environmental objectives to be followed and for necessary traderelated measures to be adopted. WTO rules set up the appropriate balance between the right of members to take regulatory measures, including trade restrictions, to achieve legitimate policy objectives (e.g., protection of human, animal or plant life or health, and natural resources) and the rights of other members under basic trade disciplines. WTO Dispute settlement body and environment related trade measures: Since the entry into force of the WTO in 1995, the Dispute settlement body has to deal with a number of disputes concerning environment-related trade measures. Such measures have sought to achieve a variety of policy objectives. WTO institutions of trade and environment linkages: The WTO also supports sustainable development and the environment through its specialized committees and bodies. One unique institutional venue is the Committee on trade and environment (CTE). As a forum for dialogue on trade and the environment, the Committee is an incubator for ideas on how to move the discussion forward. Already, this is bearing fruit. Some issues first raised in the CTE have become fully-fledged negotiations - for instance, on fisheries subsidies and on the relationship between the WTO and multilateral environmental agreements (MEAs). Other WTO bodies are also important. For example, the committee administering the Technical (which deals with regulations, standards, testing and certification procedures) is where governments share information on actions they are taking and discuss how some environmental regulations may affect trade. International efforts on the environment... Since environmental problems often transcend national borders, the response must involve concerted action at the international level. WTO members have long recognized the need for coherence amongst international institutions in addressing global environmental challenges. The current negotiations on the WTO-MEA relationship provide a unique opportunity for creating positive synergies between the trade and environment agendas at the international level. In addition, there is regular and routine contact between the WTO Secretariat and secretariats of multilateral environmental agreements. The Doha Development Agenda and the environment: The Doha round negotiations gives members a chance to achieve an even more efficient allocation of resources on a global scale through the continued reduction of obstacles to trade. The Round is also an opportunity to pursue win-win-win results for trade, development and the environment. For example, the Doha Round is the first time environmental issues have featured explicitly in the context of a multilateral trade negotiation and the overarching objective is to enhance the mutual supportiveness of trade and environment. Members are working to liberalize trade in goods and services that can benefit the environment. They are also discussing ways to maintain a harmonious co-existence between WTO rules and the specific trade obligations in various agreements that have been negotiated multilaterally to protect the environment. Other parts of the Doha negotiations are also relevant to the environment, for example aspects of the agriculture negotiations and also disciplines on fisheries subsidies. The Doha Development Agenda also has a section specifying the priority items in the CTEs regular work. Situation after Doha round Greater market openings for environmental goods and services and enhanced coherence between trade and environment

As part of the Doha mandate, the WTO members agreed to negotiate greater market opening in environmental goods and services, the relationship between WTO rules and trade obligations set out in multilateral environmental agreements (MEAs) and on the exchange of information between those institutions. Agreement in these areas would undoubtedly help address climate change. A more open market for environmental goods and services: The elimination or reduction of barriers to trade in this area will benefit the environment by improving countries ability to obtain high quality environmental goods. It will facilitate access to these types of goods and foster a better dissemination of environmental technologies at lower costs. This negotiation will also have a positive impact on climate change by improving access to goods and technologies that can contribute to climate change mitigation. According to a recent World Bank study on trade and climate change, elimination of both tariffs and non-tariff barriers to clean technologies could result in a 14% increase in trade in these products. The goods which fall within a broad range of environmental categories, are air pollution control, renewable energy, waste management and water and wastewater treatment. Some of these products are also relevant to climate change mitigation. They include products generating renewable energy such as wind and hydropower turbines, solar water heaters. Members are also considering issues related to non-tariff barriers, transfer of technology, special and differential treatment. More coherence between trade and environment rules :To bring more coherence between trade and environment rules, members have made a number of proposals highlighting the importance of national coordination between trade and environment experts, particularly in the context of the negotiation and implementation of MEAs. Proposals have also underscored the value of national experience-sharing in this area, which can enhance the mutually supportive relationship of the trade and environment regimes. Better cooperation between the WTO and MEAs: There is a strong support for consolidating some practices and mechanisms for co-operation between the WTO and the MEAs. Concrete suggestions have been made regarding information exchange sessions with MEAs possibly through annual sessions, document exchange and future collaboration in the context of technical assistance and capacity building activities. The proposals set out criteria that could guide WTO committees in their consideration of requests for observer status by MEAs. Fisheries subsidies: Reducing fisheries subsidies is also part of the Doha mandate and could significantly reduce overfishing which fosters species preservation. Members agreed to eliminate subsidies that distort trade and seriously undermine the sustainable exploitation of fish stocks. Members are currently discussing how this reduction could be defined and applied. An agreement would constitute a triple-win for trade, environment and development which is at the centre of this negotiation.