Prime Minister Narendra Modi will address a global audience on the US and India as key partners and leaders in a post-COVID world at the India Ideas Summit on July 22, the US-India Business Council said on Thursday. The two-day virtual summit, organised by top advocacy group US-India Business Council (USIBC), would be held on July 21-22. The summit will bring together senior officials from the Government of India and the US administration who are setting the post-pandemic recovery agenda.
This year's line-up includes US Secretary of State Mike Pompeo, Minister for External Affairs S Jaishankar, Finance Minister Nirmala Sitharaman, Minister of Commerce and Industry and Railways Piyush Goyal, Deputy Secretary, US Department of Health and Human Services (HHS) Eric Hargan, US Senator of Virginia Mark Warner, US Representative of California Ami Bera, Ambassador Kenneth Juster and many others. "As USIBC celebrates 45 years of work to grow the US-India partnership, Prime Minister of India Shri Narendra Modi will address a global audience on the US and India as key partners and leaders in a post-COVID world. His remarks are scheduled for July 22 at 11:00 AM EST/8:30 PM IST," the USIBC stated. The summit will also feature senior executives from top US and Indian companies. These corporate leaders include USIBC's 2020 Global Leadership Award Recipients -- Jim Taiclet, CEO, Lockheed Martin Corporation and N Chandrasekaran, Chairman, Tata Sons. "We are honoured to have the Prime Minster join during the 45th anniversary of the US-India Business Council," said Vijay Advani, USIBC Global Board Chair and Executive Chairman of Nuveen. "This year's focus is on Building a Better Future. As Prime Minister Modi navigates the twin challenges of managing the health impact of COVID-19 and the associated global economic disruption, he has articulated the importance of the US-India Partnership in ushering an era of economic renewal and inclusive opportunity," he added.
Source: Economic Times
Outlining current global challenges at the India-EU Summit, Modi lamented the fact that the rules-based international order has come under pressure, in a subtle hint that several countries are getting more protectionist. Prime Minister Narendra Modi on Wednesday called for further bolstering of ties with the EU, cutting across several areas of mutual interests, including trade, investment and climate change. Outlining current global challenges at the India-EU Summit, Modi lamented the fact that the rules-based international order has come under pressure, in a subtle hint that several countries are getting more protectionist. The summit comes in the midst of China’s nowdeescalating border friction with India. India and the EU are setting up a high-level dialogue on trade and investments, including on all market and trade issues and supply chain dynamics. The two sides have expressed their commitment for a mutually balanced and favourable trade and investment agreement. The Covid-19 crisis has thrown up multiple and complex economic problems in the world, Modi said, adding that like the EU, he too, is in favour of a deeper and broad-based relationship with the 27-member bloc. He called for India and the EU to work on an action-oriented agenda with a fixed timeframe for implementation towards this objective. Identifying the imperative of concerted India-EU action to combat climate change which poses a long-term challenge, Modi said he welcomes EU investments and technology in India’s push towards renewable energy. PM pointed out that India and the EU are natural partners in ensuring peace and stability in the world and this assumes more importance in the current context. Shared values of pluralism, multilateralism, freedom and transparency are an asset in this partnership, he asserted. In his opening remarks, president of the European Council Charles Michel said that India and the EU are partners in trade and investment and this summit is an opportunity to find ways to build on and create a stable and structured partnership. The Indian delegation at the summit was led by Modi while the European side was led by Michel and the president of the European Commission Ursula von der Leyen. The summit comes after a gap of almost three years since the 14th India-EU Summit held on October 6, 2017, in New Delhi. There is a new leadership in EU Council and Commission which holds promise of setting a long-term perspective to develop relations in a challenging global environment. Meanwhile, after 16 rounds of talks between 2007 and 2013, negotiations for an IndiaEU FTA were stuck due to differences over the bloc’s demand for a sharp cut in tariffs on auto parts and wine by New Delhi, among others. Both the sides, however, were trying to revive the trade talks earlier this year when the Covid-19 hit, forcing authorities to shift focus to tackling the pandemic. The EU is of great strategic importance to India and was New Delhi’s largest trading partner (as a bloc) in 2018. India’s bilateral trade with the EU in 2018-19 stood at $115.6 billion with exports valued at $57.17 billion and imports worth $58.42 billion. Trade in services was valued at $40 billion, with India enjoying a slight surplus.
Source: Financial Express
India and the United States on Thursday discussed the “possibility” of a free trade pact, India’s Commerce and Industry Ministry said in a statement. Commerce and Industry Minister Piyush Goyal and U.S. Commerce Secretary Wilbur Ross exchanged views “on the ongoing India-US trade discussions and appreciated the substantial progress made by both sides on most of the outstanding issues”, the statement said.
Source: Business Standard
India has pushed for signing a limited trade deal with the US along with the possibility of a free trade agreement (FTA). A teleconversation between Commerce and Industry Minister Piyush Goyal and his US counterpart Wilbur Ross on Thursday saw both sides noting the progress made so far in talks. “There was a desire expressed to conclude this initial limited trade package and recognising the complementarities of the India-US bilateral trade, (the two sides) discussed the possibility of an FTA,” said a statement by the Commerce Department. However, officials say talks on the proposed trade deal with the US will pick up only after the American presidential elections conclude in November.India also flagged the pending US-India Social Security Totalisation Agreement, to avoid double deductions from the income of employees working in each other’s countries, and allowing short-tenure Indian workers in the US to get back billions of dollars in social security deposits there. India also raised its concerns on 24 Indian products being barred from the US government supply contracts due to them being America’s Trafficking Victims Protection Reauthorization Act list, which designates them as ‘child labour sectors’. Ross offered to set up meetings with relevant US government officials on both issues. Goyal also raised the issue of US ban on import of wild-catch shrimp from India on the premises that fishing practices followed in India were non-compliant with American regulations to protect sea turtles. Ross agreed to facilitate a discussion between the officials of the ministries and departments concerned of the two nations in this regard.
Wait for FTA
The US heads into its presidential elections on November 3. Despite the raging pandemic, nationwide elections will not be postponed, say experts. Chances of the much publicised trade deal — initially championed by US President Donald Trump and subsequently pushed by Prime Minister Narendra Modi — being signed early on remain slim, confirm officials.While both sides have committed to continue talks, egged on by the threat of Chinese dominance in manufacturing and trade flows, the Covid-19 crisis and different policy concerns of both nations have widened the gap in talks. A step-by-step reduction of import duties on high-value US agricultural products, trade margin policy for medical devices, and a promise to continue talks on reducing price restrictions on American technology goods remains India’s basic proposal for trade talks with the US. This is also conditional upon the US backing off from its tough stance on digital services taxes imposed by India. Last month, senior policymakers had stressed on expediting talks with the US as tension across the Ladakh border led to a massive call for boycotting Chinese goods. On the other hand, with major chunks of the global trading economy being carved up by regional trading agreements, New Delhi is currently scouring the map for new export destinations, said a senior trade policy advisor to the commerce department. On its part, the US also signalled it was open to restoring trade benefits under its Generalized System of Preferences (GSP) scheme to India, provided it got a ‘counterbalancing proposal’. Reinstatement of GSP benefits has remained a key demand from New Delhi, but in February, the US had classified India as a developed economy, ineligible for benefits given to developing countries. US Trade Representative (USTR) Robert Lighthizer, Trump’s point man on trade, told members of the US Senate Finance Committee that trade talks with India are ongoing. India’s total benefits from GSP tariff exemptions amounted to $260 million in 2018, according to the data from the Office of the USTR. However, this was only a small portion of India’s overall exports to the US in the same period, which stood at $51.4 billion. Officials haven’t heard much from Lighthizer since he cancelled his visit to India during Trump’s visit to India in February. It has been a similar story since last month as well. The US wants India to slash its tariff rates and further open up its markets to American products. Trade talks have oscillated back and forth on these issues over the past two years. The differences had remained too large to bridge despite a push by both leaders. Sources confirm that talks had entered a frenzied pace just before the Howdy, Modi! event in Houston, Texas, in September 2019 as well as the Namaste Trump tour in Ahmedabad in February. Trump has repeatedly called India a “tariff king” for pushing its exports unethically and not allowing American goods into its markets. With his trade war with China still unsettled, and global growth remaining unsteady, Trump remains under pressure to showcase his ability to tame major trade partners before his term ends and may make a surprise move before November, say experts.
Issues galore
“The US has remained India’s largest market for exports for years now. As a result, issues are spread across segments and opposition to the way trade is conducted remains deep from lobbies in every industry,” said Biswajit Dhar, senior trade policy expert and professor at Jawaharlal Nehru University. India has offered an olive branch with respect to agricultural products. Trump’s core constituency of American farmers has lost its prime foreign markets after nations retaliated to Trump’s unilateral tariff hikes by making it equally expensive to buy American products. India has now proposed to cut duties on high-value imports, such as almonds, walnut, apples, and wine, which were among 29 items on which the government had hiked duties by up to 50 per cent last year, said sources. The US wants India to reduce import duties on certain information and communication technology (ICT) products, such as high-end mobile phones and smartwatches, which may make Apple iPhone products cheaper. While New Delhi had earlier considered the proposal, talks have been made difficult on the quantum of reduction demanded, said officials. ICT products make up a minuscule $407 million, of the $35.54 billion of total inbound shipments from the US. However, US Commerce Department officials have zeroed in on the category as a prime growth puller. American trade officials have expressed unhappiness over New Delhi’s decision to saddle medical device imports with an additional health cess, said an official in the know. Despite remaining the largest source of shipments, US-made devices have continued to lose market share in India to cheaper alternatives from China and Germany. Though India has said it won’t roll back the tax, sources revealed the Centre was considering allowing a trade margin policy for certain high-value items, such as coronary stents.
Source: Business Standard
New Delhi: India and Russia are exploring to activate joint projects in Asia and Africa, as well as interaction in the field of digital technologies, have sufficient potential to activate economic relations and change the existing negative trend. The two sides also plan to jointly create an ecosystem of startups and venture funds for the development of information technologies. These subjects were part of conference jointly organized by the Russian International Affairs Council (RIAC) and the MEA-run Indian Council of World Affairs (ICWA). The joint conference has been held since 2017 alternatively in Moscow and New Delhi. Andrey Kortunov, RIAC Director General, T.C.A. Raghavan, ICWA Director General and D.B. Venkatesh Varma, Ambassador of India to Russia delivered welcoming remarks. The list of speakers from Russian and Indian sides includes Ivan Timofeev, RIAC Director of Programs, Atul Aneja, Strategic Affairs Editor, the Hindu, Sergey Lunev, Professor, MGIMO University and National Research University Higher School of Economics, Ram Upendra Das, Head, Centre for Regional Trade, Ministry of Commerce & Industy, GOI, Alexey Kupriyanov, Senior Research Fellow, Primakov Institute of World Economy and International Relations of RAS, Vijay Sakhuja, Former Director, National Maritime Foundation, Consultant, ICWA. The discussion was chaired by TCA Raghavan, ICWA Director General. Participants of the round table discussed general trends in Russian-Indian relations, new challenges and opportunities that two countries face against the background of the pandemic and global crisis, as well as possible scenarios for the development of international economic situation in the Post-COVID-19 world. The pandemic has stimulated the development of information technology in many countries, including Russia and India. This area has been a priority for many years for the two countries. COVID-19 has also encouraged countries around the world to cooperate in the healthcare and pharmaceutical sectors, providing new opportunities to strengthen interstate cooperation. At the same time, the pandemic has worsened a number of problems that, as experts from the Russian side stressed, existed long before the coronacrisis. Experts noted that Russia and India do not have unresolved conflicts and their positions on international issues are close or completely coincide, which provides a reliable basis for bilateral relations. Moscow and New Delhi actively cooperate on international platforms including the SCO, BRICS, Russia-India-China (RIC) mechanism, G20 and the UN. The Indian side pointed out that the potential of bilateral trade is limited by non-tariff and logistics barriers, which have not been completely eliminated. The participants also included in the list of main problems of bilateral relations the continuing stagnation of trade and economic cooperation. The positive dynamics of interaction in such areas as military-technical, aerospace and nuclear energy has not changed the overall situation. Another important topic of discussion at the round table was non-traditional security challenges. The pandemic has demonstrated problems in the areas of social security, food security and healthcare. The Indian side pointed out that no country in the world has been able to develop a COVID-19 vaccine alone, which proved the importance of cooperation and the strong interdependence of all countries not only in the economic area, but also in security issues.
Source: Economic Times
This situation is a result of the government waiving off late fees for companies and suppliers to upload certain forms under the goods and service tax, tax experts said. Many eporters are facing a working capital crunch as they have run into refund problems after a recent government circular said exporters would not be eligible for input tax credit refunds in cases where they are unable to match invoices from the vendors. This situation is a result of the government waiving o late fees for companies and suppliers to upload certain forms under the goods and service tax, tax experts said. That led to several cases where these forms were not uploaded, and exporters were unable to take input tax credit running into crores. As per the GST framework, tax credit cannot be availed until and unless a corresponding invoice is reected on the government portal. Now, exporters are having to deal with queries from tax oicials while seeking refunds. “This has been a matter of concern for exporters, especially given their experience of eld oicers insisting on compliance of all circulars before issuance of any refunds,” said Abhishek Jain, tax partner at EY. “For speedy processing of these refunds, the government should consider extending a relaxation on the matching of credits or an option of provisional refunds for the interim period to mitigate working capital concerns for the exporters,” he said. The government circular specically mentioned that input tax credit refunds should not be granted on invoices that are not reected in GSTR-2A—a form that reects outward supply invoices uploaded by suppliers. Now, GSTR 2A is auto-created information based on GSTR 1—a monthly statement of outward supplies of goods or services led by a company. The government has waived late fee for ling forms such as GSTR-1 due to Covid-19 situation. While this was a step in the right direction, due to this the corresponding invoices—which exporters submit to claim refunds—are not reected in GSTR-2A, experts said. Hence, exporters are unable to avail tax credits, they said.
Source: Economic Times
Promising all support to industry, Union Minister Nitin Gadkari on Thursday asked players to join hands with the government to rescue COVID-19-hit economy by taking up projects on public private partnership (PPP) mode. At the same time, he suggested all stakeholders, including banks, financial institutions, infrastructure, MSMEs, agriculture and industries, to jointly create demand to address the need of liquidity in the economy. "Presently our economy is facing lots of challenges. Government is positive and supportive and at the same time as a facilitator, we are keenly taking lots of decisions regarding how we can be helpful in promoting industry, trade and business... This is the time we need cooperation from all stakeholders," Road Transport, Highways and MSME Minister Gadkari said. He was addressing Renewable Energy Manufacturing Conference, organised by industry body CII in association with the Ministry of New and Renewable Energy (MNRE) through video conferencing. "The banks, financial institutions, MSMEs, industries, agriculture, infrastructure, everywhere we need to plan and with an appropriate vision we need to move fast," he said, adding there was liquidity crunch in the economy and the need of the hour was to create demand through PPP projects. He also asked industry bodies like CII to get in touch with the Ministry of Environment and Forests for early clearances to projects. The minister stressed that there is a need to find out a system for self-assessment of pollution levels by the industry and in case they are found guilty the fine amount could be manifold, including jail term in case of repeat offenders. Gadkari said the Prime Minister has accorded priority to infrastructure development, and 22 green highways were on the anvil, including Rs 1 lakh crore Delhi-Mumbai Expressway on a Greenfield alignment. The expressway will reduce the travel time to 28 hours from the present 48 to 50 hours. He also underlined the need for setting up industrial clusters along the highways to decongest metropolises and develop far-flung areas. "We need to change our transport on LNG, which is the fuel for future. We will set up LNG and CNG stations on highways. As compared to diesel there is 60 per cent saving on these fuel," the minister said. He also emphasised the need to convert old diesel buses into LNG or CNG-fuelled buses. Describing MSME as an important sector for development of the country, he said there is need to make MSMEs strong and boost exports while reducing imports. Presently MSMEs contribute 30 per cent to the GDP growth and accounted for 48 to 50 per cent exports and have created more than 11 crore jobs, Gadkari noted. He suggested industry to tap foreign capital investment and said that a credit rating system can be introduced for MSMEs. The minister also asked industry bodies to come forward for 'Aatmanirbhar Bharat' and urged them to do work in 115 aspirational districts to uplift rural economy and make India super power.
Source: Business Standard
Commerce and Industry Minister Piyush Goyal on Thursday assured industry about finding a solution for issues related to local taxes, such as electricity duty, as they make domestic manufacturers uncompetitive....
Source: Business Line
The government has imposed curbs on the import of power tillers and related components in a move that could discourage inbound shipments of these products that come mainly from China, which accounts for over 30 per cent of such equipment used in India. "Import policy of power tillers and its components is amended from free to restricted," the Directorate General of Foreign Trade (DGFT) has said in a notification. Putting a product under a "restricted" category means the importer would have to seek a license from the DGFT for the imports. Industry sources said that a significant amount of power tillers in India are imported from China either as Completely Built Units (CBUs) or their critical parts such as engines are imported from China and assembled here. Chinese power tillers and components are almost Rs 30,000-60,000 cheaper than Indian-made ones, putting domestic companies at a huge disadvantage. A few years back, China occupied a mere 10 per cent of the power tiller market in India, but now controls almost 35 per cent. Over 40,000 power tillers are sold in India each year. Small farmers in eastern and western India who don’t have large landholdings and can’t afford to buy costly tractors opt for power tillers. Typically, a power tiller is small multi-utility device of 8 HP power or more, and resembles a tractor. It is mostly used for soil preparation. Its components include engine, transmission, chassis and rotavator. An average-sized power tiller costs Rs 1.25-2.15 lakh, while a tractor is available for Rs 4-5 lakh. Meanwhile, in its public notice, the DGTF has laid out the procedure for obtaining import licences. It said that the cumulative value of authorisation issued to any firm in a year would not exceed 10 per cent of the value of power tillers that it imported during the past year (2019-20). The cap of 10 per cent would also be applicable for components. The applicant should have been in the business for at least three years and should have sold a minimum of 100 power tillers in the past three years, it said. "Only manufacturers are eligible for applying for an authorisation to import power tillers or components. The applicant should have satisfactory and proven infrastructure for training, post-sales service and spare parts," it added.
Source: Business Standard
At a store near you perhaps are bales of fabric that weave in the promise of killing the coronavirus, innovations tailored for pandemic times by prominent players in the textile industry but viewed with scepticism by the scientific fraternity. At a time when businesses big and small struggle to stay afloat with spending power diminished and no appetite for new clothes or shopping of any kind, several players in the textile industry may just have cracked the code to stay relevant. In the last few months, at least four textile brands have come out with technology-infused fabrics that they claim kill the virus shortly after it lands on the surface. This, they hope, is one solution to reduce the spread of COVID-19 that till Wednesday had infected more than 930,000 people across India and claimed over 24,000 lives. “While we do wear masks and gloves and take proper and due sanitation measures, it’s important that our attire also aids our protection. Clothing provides a large hosting surface area for bacteria and viruses, benefiting their carryover,” said Rajendra Agarwal, managing director at Donear Industries. His company launched an “anti-corona” fabric in April, which uses “neo-technology” to render the virus ineffective. Tested in Melbourne, the technology, he said, is proven to be effective against SARS-CoV2 in the laboratory and involves two steps. First, the fabric is treated with small silver particles that are “potent antibacterial and antiviral agents”. Due to their unique chemical and physical properties, the silver particles attract the “oppositely charged” virus like a magnet, thereby immobilising the virus, Agarwal explained. Second, the “fatty vesicle” technology helps deplete the viral membrane and completely destroying the virus, he added. In June, Australian brand Lenzing collaborated with India’s Ruby Mills to launch fabrics laden with H+ technology, which they described as “a combination of a high-performance active agent and a proprietary in-house process that effectively embeds the active agents onto a fabric”. “The virus is an RNA enveloped by a lipid membrane. When the virus lands on the fabric surface, which is embedded with the H+ Technology, the action gets initiated. "The H+ Technology’s active agents break down the lipid membrane of the virus and leave the RNA exposed. This renders the virus ineffective,” Ruby Mills spokesperson Rishabh Shah explained. RNA is the genetic material of viruses. He added that the technology also ensures that the fabric retains its anti-bacterial and anti-fungal properties even after multiple washes. Giving an estimate of the retail price, Lenzing’s South Asia commercial head Avinash Mane said the H+ technology fabric, which can be fashioned into everyday wear, is available at about 10 per cent more than the “normal versions”. Among the other brands that are experimenting in the area are Siyaram’s and Arvind Limited. To make the product more accessible, Ruby Mills and Lenzing said their fabric can be used to make not just hospital uniforms, bedsheets, PPEs and masks but also everyday wear garments, including formal clothing as well as Indian ethnic wear. The feel of the fabric, in solids and prints, would be the same, they said. H+ technology is available across a wide range of fabrics, including viscose, polyesters, linens and cottons, the companies claimed. DONEAR too said their neo-technology fabric can be tailored to any garment of choice — from suits and shirts to skirts and blouses. It is also available in a variety of fabrics, including cottons, polyblends, worsteds and non-wovens. The companies are hoping perhaps that their anti-corona fabrics will sell out the way sanitisers, masks and hand soaps did in the first few weeks of the pandemic, and experts, though sceptical, said the product might be tempting for many. “I suspect the trigger (behind developing anti-corona fabric) is partly the feeling that the Indian customer will be eager to buy any product that claims to be protective against COVID-19,” said Gautam Menon, professor of Physics and Biology at Ashoka University. According to entrepreneur-turned-academician Kaustubh Dhargalkar, brands tend to exploit customer mindsets to launch new products. In the present situation, the brands are targeting people living in fear and anxiety. While it is too soon to determine the popularity of these fabrics among consumers, Dhargalkar predicted that high risk communities like the elderly, children, those with comorbidities are likely to find a product such as this tempting. “There might be an initial surge in purchases, but how long it sustains can only be found out at a later stage,” said Dhargalkar, author of “It’s Logical: Innovating Profitible Business Models”. While there may be takers initially, the issue of how long the virus survives on soft surfaces such as fabrics is still to be determined. The best way out is still hygiene and washing clothes with detergent, said several scientists and medical experts. Alpana Razdan, lab head at the Genestrings Diagnostic Centre, said there is no evidence to suggest that clothes act as a “major vehicle spread” for the new coronavirus. “What, however, is known is that the virus needs some moisture to survive, so one precaution to take is keeping fabrics as moisture-free as possible, so frequent washing and drying will be your best friend,” she said. Mrinal Sircar, director of pulmonology at Fortis Hospital (Noida), agreed. “Even if the clothes are infected, unless one touches their face after touching the infected cloth, they will not get infected. For those who are worried their clothes are carrying the virus, a quick wash with detergent will kill the virus,” she said. For Menon too, the primary concern is not if and for how long the virus can survive on fabrics, but the likelihood of its transmission. “There is some work that studies this aspect (contracting the virus from fabrics), certainly, but none of this is in the real-world conditions that we encounter. “The problem is not so much the presence of virus on your clothes, but with transferring it to your mouth or nose while it survives on these surfaces. This is where the hygiene you practice is important,” he said. Microbiologist Ashutosh Rawat argued that an “anti-corona fabric” does not “make much sense” for people who are not frequenting areas with high virus load. “The recommended material for PPE gowns for those working with corona patients is non-woven polypropylene melt blown fabric. The gsm (grams per square metre) specifications vary when working in a high risk area where viral load is expected to be high. “To wear clothes of such a fabric in routine is out of question,” asserted the consultant microbiologist at Ghaziabad’s Columbia Asia hospital. A March 2020 study published in the New England Journal of Medicine looked at the possibility of people contracting the coronavirus through aerosols as well as by coming in contact with contaminated surfaces. It discovered that the virus could be detected in aerosols for up to three hours. On solid surfaces like copper, cardboard and plastic, it could survive for as long as four hours, 24 hours, and two to three days respectively. The study, however, did not include fabrics. Shedding more light on the virus-fabric equation, Lisa Maragakis, senior director of infection prevention at the Johns Hopkins University in the US, has said in a blogpost that existing evidence suggests that “the virus does not survive as well on a soft surface (such as fabric) as it does on frequently touched hard surfaces like elevator buttons and door handles”.
Source: Outlook India
The finance ministry on Thursday said banks have sanctioned loans of about Rs 1.23 lakh crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, reeling under the economic slowdown caused by COVID-19 pandemic. However, disbursements against this stood at Rs 68,311 crore till July 15 under the 100 per cent ECLGS for micro, small and medium enterprises (MSMEs). The companies will be required to put in place a board-approved policy on the management fee, expenses and incentives, if any, claimed from trusts under their management.RBI issues fair practices code for asset reconstruction companiesL&T, LTFH, L&T Finance Holdings LtdL&T Finance Holdings Q1 net profit dips 73 per cent to Rs 148 crore on higher provisioning The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May. The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 22 private sector banks and 21 non-banking financial companies (NBFCs). “As of 15 July 2020, the total amount sanctioned under the 100 per cent Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,23,345.16 crore, of which Rs 68,311.55 crore has already been disbursed,” the finance minister said in a tweet. Under the ECLGS, the loan amounts sanctioned by PSBs increased to Rs 69,135.19 crore, of which Rs 41,819 crore has been disbursed as of July 15, she said. At the same time, private sector banks have sanctioned Rs 54,209.97 crore and disbursed Rs 26,492 crore. “Compared to 9 July 2020, there is an increase of Rs 3,245.79 crore in the cumulative amount of loans sanctioned & an increase of Rs 6,323.65 crore in the cumulative amount of loans disbursed, by both #PSBs and private sector banks combined as on 15 July 2020,” Sitharaman said. The country’s largest lender SBI has sanctioned Rs 20,910 crore of loans and disbursed Rs 14,362 crore. It is followed by Punjab National Bank, which has sanctioned Rs 9,121 crore. However, its disbursements stood at Rs 4,032 crore as of July 15. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector. Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility. For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned, whichever is earlier. All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore are eligible for GECL funding under the scheme.
Source: Financial Express
Handholding domestic industries to develop domestic capacities should be a part of India’s economic strategy, not the entirety of it. The coronavirus-induced lockdown in India created significant difficulties for the migrant, informal, and daily wage workers who became desperate to return home. MSMEs also suffered a setback from the lockdown—the over 63 million unincorporated non-agricultural enterprises engage over 111 million workers. Against this backdrop came the clarion call for an “aatmanirbhar Bharat” or a self-reliant India, encouraging people to be ‘vocal for local’ and striving for ‘global outreach’. The blinkered focus of India’s economic policy on self-reliance is worrying. International trade brings gains to both the trading countries even when one country cannot produce anything more efficiently than its trading partner—this is the theory of comparative advantage which has provided the theoretical underpinnings for economies to open up during the 1980s and 1990s. The great lockdowns in all major countries around the world have destabilised global value chains; this crisis offers opportunities for improving international cooperation rather than an excuse for turning inward. In a well-timed book “COVID-19 and Trade Policy: Why Turning Inward Won’t Work”, Richard Baldwin and Simon Evenett explain how writing off the open global trading system may not be the best way forward. Protectionism has ripple-effects—protectionist policies cannot be pursued in isolation; they will evoke retaliatory measures from trading partners ultimately making everyone worse-off. In the economic package announced for agriculture and allied activities, the finance minister proposed that efforts be directed at giving an export push to some niche commodities based on the cluster approach such as mango in Uttar Pradesh, kesar in Jammu and Kashmir, makhana in Bihar, and chilli in Andhra Pradesh. Gradually, the politico-economic narrative meandered toward being ‘vocal for local’ that is buying locally produced goods and producing as much as possible domestically, on the consumption and production sides, respectively. This idea is inherently flawed. Being open as an importer is a prerequisite for becoming a successful exporter, ie, it takes orthodox opening (open on both imports as well as exports) and not what trade economists call heterodox opening (open on exports but sealed on imports). India’s merchandise exports shrank to $19.05 bn in May 2020, a y-o-y decline of 36.5% whereas imports contracted to $22.2 bn, experiencing a 51.1% y-o-y decline. In terms of overall trade (merchandise and services), India’s exports plummeted to $61.6 billion in April-May 2021—a 33.7% fall over the same period last year, while imports plunged to $57.19 billion registering a 48.3% decline. Ongoing border tensions with China are compounding India’s economic problems further. Apart from syphoning scare and valuable resources toward bolstering defence and securing borders, it has steered the intrinsically flawed state rhetoric for “aatmanirbharta” or self-reliance further in the wrong direction. The clamour for restricting trade with China by imposing higher import duties on Chinese products is entirely misplaced, even as it stokes popular sentiment in its favour and even industries begin to take cognisance to reorient existing contracts and deals with Chinese companies. China alone accounts for 13-16% of India’s aggregate imports from around the world. In value terms, it is India’s second-largest trading partner next only to the US with a total trade valuation of $87 billion in 2018-19. A sizeable portion of top imports are sourced from China, particularly those of intermediate goods and raw materials. India imports about 50-60% of electrical machinery and equipment, 35-40% of organic chemicals, over 30% of fertilisers, 30-35% of nuclear reactors, boilers, machinery, and mechanical appliances, over 20% of iron and steel and 35% of iron and steel articles, 25% of vehicles and accessories, 20-25% of miscellaneous chemical products, 17-20% of optical and photographic instruments and apparatus, 14-17% of plastic and articles thereof, and almost 14% of inorganic chemicals from China. Additionally, 60% of consumer durables such as furniture, bedding, mattresses, and over 25% of ships, boats, and floating structures are imported. Indian manufacturers use many of these items for producing finished products for domestic and export markets. Unless comparable alternate sources of import are ascertained for these critical goods and raw materials, any unthinking offensive against Chinese imports will hamper manufacturing by Indian industries and dent India’s domestic and export markets. Producers may not be willing or able to absorb the higher costs of production from dearer inputs (imported or produced domestically) shifting the burden onto consumers who will face much higher prices for regular commodities such as mobile phones, automobiles, and electronic goods. India is the third-largest producer of pharmaceuticals in the world by volume and accounts for 20% of global generics exports, catering to markets as diverse as the US and Sub-Saharan Africa. However, India imports over 70% of its requirement of active pharmaceutical ingredients (API) for the production of formulations sold domestically and abroad, from China. This critically integrates China into India’s production and supply chains. Any blanket ban on imports from China will leave the Indian pharmaceutical industry in acute shortage of raw materials posing a great danger not only to its export prospects but also to public health in India and in countries that depend on Indian drugs. Worse still, raising import tariffs and creating barriers for Chinese imports will attract retaliatory measures, which if imposed in any of the strategic sectors where India critically depends on Chinese imports, could throttle many an industry of material and strategic significance in India. China holds importance as an export destination too for India; exploration of markets in developing and advanced economies that are aligned with India’s stance toward China should precede any thought on imposing trade restrictions. As Martin Wolf, in his recent column on the war on supply chains, aptly highlights from a chapter by Sébastien Miroudot in the aforementioned book, resilience is the ability to return to normal operations after a disruption whereas robustness is the ability to maintain operations during a crisis. Clearly, it is robustness that matters most during the ongoing Covid-19 pandemic. As Miroudot emphasises, it is “…a mistake to equate selfsufficiency with robustness – putting all the eggs in one basket…” even if it is the domestic one “…is still not a good idea.” A reasonable strategy in the context of Covid-19 and border escalations with China would be to have short- and long-term plans for diversifying import dependence and export markets. Handholding domestic industries to develop domestic capacities should be a part of India’s economic strategy, not the whole and sole of it. Finally, to the question “should governments react to the health, economic, and trade crises by turning inward?” posed in their book, Baldwin and Evenett categorically and unequivocally answer: “No. Turning inward won’t help today’s fight against COVID19…Trade is not the problem; it is part of the solution.” It is hoped that the policymakers are listening.
Source: Financial Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
765.60 |
USD/Ton |
-0.37% |
17-07-2020 |
|
VSF |
1229.54 |
USD/Ton |
-0.35% |
17-07-2020 |
|
ASF |
1688.48 |
USD/Ton |
0% |
17-07-2020 |
|
Polyester POY |
703.41 |
USD/Ton |
0.41% |
17-07-2020 |
|
Nylon FDY |
2015.88 |
USD/Ton |
0% |
17-07-2020 |
|
40D Spandex |
4003.16 |
USD/Ton |
0% |
17-07-2020 |
|
Nylon POY |
886.41 |
USD/Ton |
0% |
17-07-2020 |
|
Acrylic Top 3D |
2244.63 |
USD/Ton |
-0.63% |
17-07-2020 |
|
Polyester FDY |
5146.92 |
USD/Ton |
0% |
17-07-2020 |
|
Nylon DTY |
943.60 |
USD/Ton |
0% |
17-07-2020 |
|
Viscose Long Filament |
1858.61 |
USD/Ton |
-0.76% |
17-07-2020 |
|
Polyester DTY |
1858.61 |
USD/Ton |
0% |
17-07-2020 |
|
30S Spun Rayon Yarn |
1718.50 |
USD/Ton |
-0.08% |
17-07-2020 |
|
32S Polyester Yarn |
1336.77 |
USD/Ton |
-1.58% |
17-07-2020 |
|
45S T/C Yarn |
2173.14 |
USD/Ton |
0% |
17-07-2020 |
|
40S Rayon Yarn |
1529.78 |
USD/Ton |
-2.73% |
17-07-2020 |
|
T/R Yarn 65/35 32S |
2030.17 |
USD/Ton |
-0.70% |
17-07-2020 |
|
45S Polyester Yarn |
1872.91 |
USD/Ton |
-0.76% |
17-07-2020 |
|
T/C Yarn 65/35 32S |
1665.60 |
USD/Ton |
-0.43% |
17-07-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
0% |
17-07-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
17-07-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
17-07-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
17-07-2020 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
17-07-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14297 USD dtd. 17/07/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Myanmar is expected to continue displaying high growth potential in garment manufacturing, according to London-based research agency Fitch Solutions. Fitch Solutions Country Risk and Industry Research on July 14 predicted that Asia, consisting mainly of Vietnam, Bangladesh, Cambodia and Myanmar, would remain the dominant players in textile manufacturing in the region. The positive outlook is supported by the large and mostly young populations and low labour costs in these countries, with further benefits to be gained from the ongoing global supply chain shift away from China. research by the NYU Stern School of Business in 2018. Myanmar’s minimum textile monthly wage could be on par with, or lower than Bangladesh, one of the lowest in the world. Besides the low-cost labour, Jason Yek, senior country risk analyst of Fitch Solutions, said. Myanmar’s proximity to China, its special market privileges granted by the EU under the Generalised Scheme of Preference (GSP) and low logistics and transport costs all “work in Myanmar’s favour." This all helps to position its apparel industry for strong growth in the coming years. “We expect Myanmar’s growth to be driven by lower value basic garment exports which manufacturers will find more challenging to turn a profit on in Bangladesh and Cambodia, where production costs are comparatively higher,” Mr Yek said. The research company, however, cautioned against the risk of the EU's withdrawal of GSP over the ongoing human rights violations in Rakhine. “Given that 60 percent of apparel exports from Myanmar go to the EU at present, this will pose a major setback to the industry over the near term should it happen,” the report said. The outgoing EU ambassador to Myanmar, Kristian Schmidt, has repeatedly warned Myanmar against taking its market privilege access to the EU, which is the largest single market, for granted. The bloc has yet to make a final decision. Another potential headwind for Myanmar is an overly strong local currency that could negatively impact external demand for local-made apparel products. “The low-value apparel which is driving Myanmar’s export growth will also be subject to a higher degree of price sensitivity from external buyers relative to higher value apparel,” Mr Yek said. Over the past decade, Vietnam and Bangladesh have captured the lion's share of the global apparel export market and have become the second and third largest garment exporters after China. With China rising in the value chain and pushing out lowto mid-range manufacturing, Vietnam and Bangladesh have emerged as the major beneficiaries. “[The trend] will be exacerbated by rising trade protectionism globally and geopolitical risks attached to operating in China, as relations between China and the West deteriorate,” the report said. Myanmar is only just emerging as a major regional player in the industry over the past decade, but it is growing fast. Based on Fitch Solutions’ estimate, apparel exports in Myanmar grew at a compound annual growth rate of about 37pc between 2010 and 2019. Nonetheless, Myanmar’s share of global apparel exports is still very low at only 1pc in 2019 despite having risen from 0.1pc in 2010, putting it slightly behind Cambodia at 1.4pc and significantly behind Bangladesh at 6.1pc. Looking ahead, Fitch Solutions said Myanmar, as well as Bangladesh, Vietnam and Cambodia, are poised to benefit most from shifts in manufacturing in the industry.“[The four countries] benefit from being close to raw material sources in China and India, having a large low-cost supply of labour, sufficient trade links with China and the rest of the world, and most importantly for some, the economic support of China,” the report said.
Source: Myanmar Times
US Senators Thom Tillis (Republican) and Mark Warner (Democrat) recently wrote a letter to majority leader Mitch McConnell and minority leader Chuck Schumer requesting that the next round of COVID-19 assistance should adequately address the magnitude of the losses felt throughout the cotton supply chain by farmers, textile mills and the merchandising segment. “Across the agricultural sectors, the US cotton and textile industry is particularly hard hit as the COVID-19 pandemic is causing unprecedented demand destruction for cotton apparel and textiles,” wrote the Senators. “Billions of dollars of orders have been cancelled as retail shopping outlets remain closed or operate at reduced capacity. The collapse in cotton demand is being felt across the US cotton industry from textile manufacturers to merchandisers to cotton producers, and all segments in between. The viability of the farms and businesses, and the jobs they represent, are at risk of not surviving this crisis,” a National Cotton Council press release quoted the letter as saying. “When Congress considers additional relief efforts in response to COVID-19, we believe any package should ensure USDA’s next round of agricultural assistance will adequately address the magnitude of the losses felt throughout the cotton supply chain by cotton farmers and include critical relief for textile mills and the cotton merchandising segment, all of which are facing unprecedented economic losses,” the Senators added. From March through May, the Census Bureau reports that clothing sales are down by $44 billion, or 67 per cent, relative to the same three-month period in 2019. US textile mills report a 90 per cent drop in orders for the yarn they produce and are consuming cotton at a seasonally-adjusted annual rate of just 250,000 bales, down over 90 per cent from year-ago levels. Cotton prices fell by as much as 30 per cent since early this year, and that decline represents a loss in market value of approximately $160 per acre of cotton.
Source: Fibre2Fashion
The crippling effect of the pandemic has seen orders worth billions of dollars cancelled across manufacturing hubs in China, Bangladesh, India, Cambodia and Myanmar. From factory floors in India to the warehouses of Cambodia, garment workers for global brands say the collapse in demand triggered by the coronavirus is being used as a cover to break their unions. The crippling effect of the pandemic has seen orders worth billions of dollars cancelled across manufacturing hubs in China, Bangladesh, India, Cambodia and Myanmar. That has left hundreds of thousands out of work in some of Asia's poorest countries. But workers allege the financial turmoil has also provided an opportunity for bosses to target troublesome shop floors where unions have pressed for higher wages and better conditions. In southern India's Karnataka state -- home to 20 percent of India's massive garment manufacturing sector -- union leader Padma has sat every day cross-legged outside her factory Euro Clothing Company II to protest its closure since early June. She was among the entire 1,200-strong workforce let go -- 900 of whom were with a union. "I have sweated here for the past 10 years for 348 rupees ($4.60) a day," said the 49-yearold, who was responsible for checking trousers, jackets and T-shirts bound for Swedish clothing giant H&M. The workshop's parent company is Gokaldas, Karnataka's oldest manufacturer, a firm that runs more than 20 factories. But Padma's workplace was the only Gokaldas plant with a union, she said. "They wanted to get rid of the union for a long time, and now they're using COVID-19 as an excuse," Padma told AFP, alleging the workers were "illegally laid off" without notice. Gautam Mody, general-secretary of the New Trade Union Initiative, which represents hundreds of workers' groups across India, said the firm was "union-busting under the pretext of COVID". Mody told AFP the shuttered facility was "the sole factory where the majority of workers are union members". Gokaldas did not reply to requests for comment but H&M confirmed the closure of the plant. "We are in close dialogue with both local and global trade unions as well as the supplier to help them resolve the conflict peacefully," H&M told AFP. The high street clothing giant also buys garments from four other Gokaldas factories, according to the New Trade Union Initiative. - Fast fashion, cheap wages - Asia's textile factories have provided jobs for millions of people as well as vital foreign currency for many poorer nations, but the pandemic has gutted the sector. In Bangladesh alone, more than 100,000 workers have been left jobless. About half are involved with unions, according to Rafiqul Islam Sujon, president of the Bangladesh Garments and Shilpo Sramik Federation, a rights group. Many factories have long resented the work of unions and have discouraged workers from collectivising while harassing or firing the most vocal leaders, campaigners say. But the economic crunch has offered "an opening for this tactic on a wide scale", said Jamie Davis of the Solidarity Center, a workers' advocacy organisation affiliated with American unions federation AFL-CIO. Major brands are now being urged to use their financial muscle to protect the most vulnerable in their supply chains. The big names "must make it clear that they will end the business relationship (with a factory) if the violations continue", said Scott Nova of labour watchdog the Worker Rights Consortium. "It is illegal to dismiss workers because of their union affiliation or to close a factory because it is unionised," he said. "Such anti-retaliation laws exist in most countries, including Cambodia, Myanmar and India -- though they are, unfortunately, often not enforced." Impassioned letter - In Myanmar, where the nascent garment sector was seen before the pandemic as a beacon of prosperity, 298 workers were fired in May at the Rui Ning factory, which produces clothes for the likes of Spanish fast-fashion brand Zara. Desperate to be reinstated, unionised workers wrote an impassioned letter to Amancio Ortega, founder of the Inditex fashion group that owns Zara. "Surely a man of such riches would not need to profit from the global pandemic by smashing our unions," it said. Ortega is the sixth-richest man in the world with a $62.8 billion fortune, according to Forbes. Inditex said it was aware of the labour disputes and cited its code of conduct, which "expressly forbids discrimination against workers' representatives". It is a position shared in public by other multibillion-dollar clothing giants aware of the PR damage that allegations of worker exploitation can inflict. In the worst cases, workers voicing opposition to lay-offs are facing jail. Cambodian union representative Soy Sros took to Facebook in April to protest the dismissal of dozens of workers from a Superl factory on the outskirts of Phnom Penh. The Hong Kong-based company makes leather handbags for brands including Michael Kors, Tory Burch and Kate Spade. Forty-eight hours later, she was behind bars and charged with incitement. Sros was released 55 days later, but the charges remain. Another Cambodian workers' leader, Pav Sina, said more than 2,000 labourers with his union had seen their contracts terminated. "In the past, factories couldn't do this," he said. "But COVID has given them the opportunity."
Source: Economic Times
The textile is a bendable material that is designed utilizing the several processes, involving knitting, weaving, crocheting or felting. These materials are comprehensively utilized to manufacture a broad variety of finished goods, such as upholstery, protective equipment, kitchen, transportation, medical, bedding, construction, apparel, handbags, and clothing accessories. According to the report analysis, ‘Vietnam Textile And Garment Industry Q1/2020 Comprehensive’ states that in the Vietnam textile and garment industry there are numerous corporates which presently functioning more significantly for leading the fastest market growth and registering the handsome value of market share around the globe in the near years while advancing the specifications of the production technologies, delivering the better consumer satisfaction, decreasing the linked price, spreading the awareness related to the textile and garment, adopting the effective strategies of profit making, studying the competitor’s and government’s strategies and employing the young workforce includes Viet Tien Garment Corporation, HoaTho Textile Garment JSC, Nha Be Garment Corporation, Garment Corporation 10-JSC, DucGiang Corporation, TNG Investment and Trade JSC, Sai Gon Garment Manufacturing Trading Corporation, Dong Nai Garment Corporation, PhongPhu Corporation, Viet Thang Corporation, Thanh Cong Textile Garment Investment Trading JSC, Century Synthetic Fiber Corporation, Hue Textile Garment JSC and several others. However, this report focuses to deliver a detailed analysis of the worldwide textile and garment industry. It effectively aims on market dynamics, technological trends, and insights on the geographical sectors and the process, material, and application varieties. Also, it analyses the foremost players and the competitive scenario in the global textile and garment industry. In addition, due to the significant development in the demand for apparels, specifically across the developed as well as underdeveloped regions of Vietnam. Not only has this, effective increase in the disposable income and speedy urbanization has led to an augment in the number of supermarkets and retail stores, thereby propelling the overall market growth. The foremost growth in the birth rate and aging populace has underwritten to the growing requirement for the hygiene products, such as baby diapers, sanitary napkins, and adult incontinence products, which, in turn, is predicted to influence the requirement for the non-woven fabrics. Textile corporates in the region aims on restructuring their businesses, advancing effective work processes, and underwriting in the niche products. Natural fibers are predicted to be the largest product sector in the region on account of the increasing requirement from the fashion and apparel industry. However, the smart textiles are utilized by the customers as a clothing entity as well as by military professionals for shield and safety resolutions. Fashion and clothing is predicted to be the fastest-increasing application sector over the forecast period due to the rise in customer spending on apparel and clothing, coupled with the highly advanced fashion industry in the region. However, the consumer necessities for crease-free fabrics and great quality dyed and printed fabrics are predicted to requirement the demand for textiles and garments over the forecast duration. Therefore, in the near years, it is predicted that the market of textile and garment in Vietnam will increase more significantly over the upcoming duration.
Source: Vietnam Insider
The WTO has now started the process of appointing a new Director-General and plans to reform its trade policies. According to the WTO rules, the new appointment should be made through consensus by all WTO members. It is usually assumed that this selecting process will be fair, but in reality, the outcome is influenced by power competition within the organization which will also impact the WTO's future reform. In history, there have been many cases of powerful countries influencing trade rules. Before the World War I, the industrial products of the advanced nations could freely enter the less advanced economies whose trade policies were largely controlled by other powerful countries. For example, the British had a lot of influence on Latin America nations and India. India's vibrant textile industry was severely undermined and threatened by the cloth and yarn imported from Britain, which was produced with much more advanced industrial techniques. India could not stop this because its market was forced open by the British control. During the 1850-1900 period, about 75 percent of India's domestically consumed textiles was imported. Today, in the WTO system, to what extent a member' trade interests can be satisfied is linked with its power and strength. Power here refers to the structural power with which members lead the agenda setting, formulate new international standards, amend and reinterpret existing international rules. All members set or accept certain reform agendas as per their respective interest and value judgment, so as to reach a consensus through competition on discourse and turn discourse to rules. A country's power firstly comes from its legal status obtained through taking part in international system. It should be an equal right of participation based on sovereignty. However, different countries' power which reflect their influences in the international system are not equal. I still remember my experience at Cancún in 2003. Forcing developing countries to fulfill certain obligations is one of the reasons why the WTO's 5th Ministerial Conference held in Cancún ended in failure, not able to reach an agreement over a range of issues. Poor developing countries proposed that giving the Special and Different Treatments to developing countries must be the prerequisite for the Doha negotiations, and demanded more specific clauses on the treatment. After the Cancún Ministerial Conference failed, Pascal Lamy, the then commissioner of the European Union Trade Commission, once proposed that non-reciprocal markets should be opened to the poor and other highly vulnerable developing countries in agricultural and industrial products sectors, and developed countries should provide developing ones with greater access to their markets. This proposal looks non-reciprocal, but is fairer indeed. Economist Joseph E. Stiglitz once put forward a market access proposal after Cancún Ministerial Conference. He stressed that all members must participate in a trading system that preferential policies would be enforced, share the obligations in accordance with their economic conditions, and provide free market access to all products for developing countries. Like Lamy's idea, Stiglitz was trying to make a balance between economic power and political power when the trade law is making. The power in the WTO can be divided into different types by strength and capability: The first type of power in the WTO is the structural discourse power. Structural discourse power is the power at the highest level. Countries with this type of discourse power are at the top of the global power structure, which is determined by their strong economic, political, and military strength, and thus they have the ability to force other countries into adopting certain rules. After World War II, the U.S. possessed the structural capability of enacting international rules and shaping international discourse power system. Some nations have skill-based discourse power, which means they have sufficient professional skills and knowledge reserves, and have focused on certain issues for a long time, and therefore can propose convincing ideas and methods to solve problems, and receive positive responses of some like-minded countries. Most countries in the WTO are weak. Only by means of forming an alliance can they obtain discourse power. The reversed structural discourse power will greatly impact the reform. Without the consent of the U.S., the WTO reform cannot proceed substantially. The U.S. has one-vote veto. Some policy makers believe that the U.S. has signed numerous regional and bilateral agreements, so it will totally abandon the current WTO system. I still have hope for the WTO reform and hope that the U. S. would come back to the table. At the beginning of 2020, the U.S. released many reports, which outline the framework of the WTO reform and come up with suggestions for subsidies and other specific issues. It can be seen that although the U.S. appears to have abandoned the multilateral system, in fact it is still striving for hegemony when it comes to WTO negotiations. The candidates for WTO Director-General are mostly from developing countries, such as Mexico and Kenya. It is good for developing countries to have more opportunities to gain the leadership power. It shows that most developing countries need a global system and still fight for a relatively fair system. It will be hard for China to gain the discourse power as the U.S. is stronger than China. China should seek cooperation by means of advocating and persuading, and should never use tactics such as forcing and threatening as adopted by those who currently possess the structural discourse power.
Source: CGTN
