Prelims level : Economics Mains level : Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
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Why in News

  • US President Donald Trump announced that the United States would raise tariffs on USD 200 billion of Chinese goods to 25 per cent.


  • Trump’s action came as a major Chinese delegation in Washington for the latest round of talks to end the trade war between the world’s two biggest economies – around billed as the last one and possibly leading to a deal to end the conflict. “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods
  • The two sides have imposed tariffs on USD 360 billion in two-way trade since last year. But Trump and Chinese leader Xi Jinping agreed to a truce in to refrain from further escalation. Besides a greater opening of the Chinese market to US goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing US companies that operate in China to share their technology.
  • Trump is also demanding that China halt theft of intellectual property and subsidies to state-owned companies.
  • To pressure China, Trump has even threatened to slap tariffs on all Chinese products entering the US they were worth USD 539.5 billion last year.

World Trade Organization (WTO)

  • In international economic relations, the most significant event to occur in recent times has been the establishment of the World Trade Organization (WTO) in 1995. The WTO replaced GATT (General Agreement on Tariffs and Trade) formalised in 1947. The former GATT was not really an organisation. Rather it was a merely legal arrangement.

WTO Agreements

  • Agreement on Agriculture
  • Agreement on trade in textiles and clothing (Multi-Fibre Arrangement)
  • Agreement on market access
  • Agreement on TRIMs
  • Agreement on TRIPs (Trade Related Intellectual Property Rights)
  • The General Agreement on Trade in Services (GATS)

Emerging trade issues:

  • Labour and environmental standards.
  • Global value chains and promotion of supply chains. e-Commerce.
  • Competition & investment provisions.
  • Environmental and sustainable goods produced using clean and green energy. Transparency in Government procurement.
  • Transparency in state-owned enterprises and designated monopolies.
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