The Hindu Editorial Analysis- 16th January, 2022 | Current Affairs: Daily, Weekly & Monthly - CLAT PDF Download

1. Why is India challenging the WTO verdict on sugar?

UPSC Syllabus: Mains – GS Paper III – ECONOMY
Sub Theme: WTO dispute settlement | General Agreement on Tariff s and Trade (GATT) | UPSC

Context – India this week filed an appeal with the Appellate Body of the World Trade Organization (WTO) disputing a verdict by the WTO’s dispute settlement panel last month on sugar subsidies. The WTO’s dispute settlement panel had ruled that India, by subsidizing sugar producers, was breaking rules framed under the General Agreement on Tariff s and Trade (GATT) which govern international trade.

What is it?

In 2019, Australia, Brazil, and Guatemala complained against India at the WTO arguing that subsidies offered by the Indian government to sugar producers were against the rules governing international trade. They argued that these subsidies, which include both domestic subsidies as well as export subsidies, exceed the limits imposed by WTO trade rules. According to WTO rules, subsidies cannot exceed 10% of the total value of sugar production. These countries believe that subsidies offered by India have led to increased production of sugar and caused the price of sugar to drop significantly in the global market. After two years, the WTO ruled in December that India’s sugar policy was favouring domestic producers through subsidies to the detriment of foreign producers. The panel recommended that India withdraws its alleged prohibited subsidies under the Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes within 120 days from the adoption of this report. India has stated that the WTO dispute panel ruling has made certain “erroneous” findings about domestic schemes to support sugarcane producers and exports and the findings of the panel are completely “unacceptable” to it. India is the second largest sugar producer in the world after Brazil and it is estimated that more than 5 crore people depend on the cultivation of sugarcane alone for their livelihood.

What is India’s stand?

India has argued at the WTO that it does not offer direct subsidies to sugarcane farmers and thus doesn’t break any international trade rule. This argument, however, has not convinced other countries who point out that, among other things, the Centre and the State governments in India mandate the minimum price (the Fair and Remunerative Price, or FRP) at which sugar mills can buy sugarcane from farmers. In fact, in August last year, the Centre set the FRP at ₹ 290 per quintal and called it the “highest ever” FRP for sugarcane procurement. Individual States also set minimum procurement prices that may be higher than the Centre’s price to adjust for conditions at the local level.  The high procurement price for sugarcane set by the Government is believed to have led to a supply glut that in turn has caused sugar prices to drop. In fact, several sugar mills are caught in a debt trap as consumer demand for sugar has remained stagnant. The low price of sugar has affected the revenues of mills, their ability to pay farmers and also forced many mills to shut down. To help the sugar sector, the Centre has even mandated the compulsory blending of ethanol derived from sugarcane with fuels such as petrol and diesel. According to the Food Ministry, the country’s sugar production is likely to remain flat at 30.5 million tonnes in the next 2021­22 season as more sugarcane will be diverted for ethanol making.  State governments and the Centre have also regularly intervened to reduce the debt burden on sugar mills. Earlier this month, the Centre decided to restructure loans worth over ₹ 3,000 crore offered to sugar mills by the Sugar Development Fund. Without such assistance, it may not be possible for sugar mills to procure sugarcane from farmers at the minimum prices dictated by the government. Further, the Centre also regularly sanctions funds to encourage sugar mills to export sugar depending on sugar prices in the global market. In the budget last year, the Centre allocated a total of ₹ 3,500 crore to fund the export of 6 million tonnes of sugar.

What lies ahead?

The WTO Appellate Body’s decision will be considered final on the dispute. In case India refuses to comply with the decision, it might have to face retaliatory action from other countries. This could be in the form of additional tariff s on Indian exports and other stringent measures. Incidentally, the appellate body of the WTO is not functioning because of differences among member countries to appoint members, and disputes are already pending with it. The U.S. had blocked the appointment of members.

2. Despite Ban Cockfight Organised in Andhra

UPSC Syllabus: Mains – GS Paper I – Art & Culture

Sub Theme: Local Festivals |UPSC

3. Lowering of Parliamentary Productivity

UPSC Syllabus: Mains – GS Paper II – Polity & Governance

Sub Theme: Parliament’s productivity | UPSC

Context: In the last two years we have already witnessed decline in Parliament’s productivity due to less number of sittings conducted. However, after a low of 33 days in 2020, Parliament saw only a small improvement in 2021 by functioning for 58 days. The situation is not very different for state assemblies as per a survey conducted for nine legislative assemblies. Restrictions due to Covid have been used as an excuse to shorten the legislative sessions. All the data of 2020 was sourced from PRS Legislative Research’s report “Annual Review of State Laws 2020”.

Article 85 – Sessions of Parliament, prorogation and dissolution

The President shall from time to time summon each House of Parliament to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.

Note – Constitution of India does not mention about three sessions of Parliament.

Article 174 – Sessions of the State Legislature, prorogation and dissolution

The Governor shall from time to time summon the House or each House of the Legislature of the State to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.

Why is declining working hours of Parliament & State Assemblies a Concern?

• Lack of debates on key issues impacts governance.
• Lack of discussion in turn affects lives of citizens in multiple ways.
• Shows lack of concern by elected members and their performance deficit goes unaccounted
• Results in passing of budget of various departments without any discussion. This leads to disproportionate and unbalanced allocation of resources
• Budget passed without discussion shows lack of coordination with opposition members
• Increasing use of Ordinance route to pass legislation by Centre and states.

Broad Framework of Parliamentary Reforms to Improve Legislature’s Functioning & Productivity

• Compulsory presence of Prime Minister during Question Hour and Zero Hour (like Britain) will lead to constructive debates and an assurance to the opposition that the Executive is responsible to the Parliament.
• Both pre and post Legislative Impact Assessment to be ensured for quality and informed law making for creating wider awareness about the targeted outcomes by bringing out social, economic, environmental and administrative impacts besides the involvement of all stakeholders in law making.
• Ensuring effective functioning of the Department Related Standing Committees of Parliament through longer tenures and promoting specialisation based on academic backgrounds.
• Women Reservation – The Constitution (One Hundred and Eighth Amendment) Bill, 2008 which sought reserving one-third of all seats for women in the Lok Sabha and the state legislative assemblies needs to be re-introduced.
• Enforceable Code of Conduct – Law makers should abide by the Rules of the House and political parties to take responsibility in this regard by evolving and enforcing a code of conduct.
• Rules on Interruptions of Proceedings – Making rules that automatically take effect against erring Members in case of interruptions and disruptions;
• Roster System – Political parties to evolve roster system for ensuring attendance of at least 50% of their members in the legislatures all through the proceedings of the House everyday to address the issue of  lack of quorum.
• Publication of Reports – Secretariats of legislatures to publish regular reports on the attendance of members inside during the proceedings and the extent of their participation in the form of questions raised, debates participated in etc.
• Opportunities for New Entrants – Political parties to ensure that the new entrants and back benchers are given adequate opportunities to participate in the debates instead of seniors.
• Prevent Criminalisation of Politics – Political Parties must abide by SC Judgment whereby it has refrained political parties from distributing tickets to candidates facing serious or other criminal charges.
• Review Whip System & Anti-Defection Law – to ensure freedom of speech of individual MPs and MLAs without adversely affecting stability of the Government. Also to transfer power to Speaker to decide anti-defection cases under Tenth Schedule either to a Tribunal having retired SC Judges or Election Commission.
• Tribunals for MPs – Setting up special courts/tribunals for time bound adjudication on criminal complaints against legislators and election related matters.
• Action against Non-Ethical Conduct – Timely and effective action against legislators for non-ethical conduct.
• Governments to be responsive to the views and concerns of the Opposition – and the Opposition to be responsible and constructive in holding the government accountable.
• Simultaneous Elections – to ensure governance is not adversely impacted on account of staggered and continuous polls.

These reforms will improve functioning of Parliament and State Assemblies, quality of law making thereby increasing trust of citizens in parliamentary democracy

4. Why India is Trying to Seal a Free Trade Agreement With UK

UPSC Syllabus: Mains – GS Paper III – Indian Economy

Sub Theme: Free Trade Agreement | early harvest pacts | UPSC

Context: India and the United Kingdom have launched formal Free Trade Agreement (FTA) negotiation, with the aim of concluding an early harvest trade agreement over the next few months. India is also negotiating a similar early harvest agreement with Australia, which is supposed to set the stage for a long-pending Comprehensive Economic Cooperation Agreement that both countries have been pursuing for nearly a decade.

Outcome of negotiation:

• Both nations have agreed to avoid “sensitive issues” in the negotiations.
• Interim agreement (aka Early harvest agreements) aims to achieve up to 65 per cent of coverage for goods and up to 40 per cent coverage for services. Final agreement may have more than 90% goods.

What are early harvest pacts?

Early harvest agreements are used to open up bilateral trade between two countries on a restricted list of goods and services, primarily as a frontrunner to clinching a more comprehensive FTA.

Issues with early harvest agreements:

• It potentially target the low-hanging fruits, leaving the tougher goods and services for later.
• It may lead to significant delays in finalising the mode broad-based FTAs, which could potentially lead to impediments. For example, India had concluded an early harvest agreement with Thailand in 2004 but has not been able to conclude a comprehensive FTA with the country.
• Early harvest agreements that do not graduate into full-scale FTAs are exposed to legal challenges from other countries that are members of the World Trade Organisation (WTO). Because, article 24 of GATT does not include such early harvest pacts under FTAs.
• India is known for its delay and long standing negotiations on the FTAs.
• Such agreements intentionally delay the more significant trade components such as investment which remain unresolved for long.

India’s status on FTAs:

• India now has in place 10 FTAs and six PTAs (preferential trade agreements). In addition, India is negotiating 16 new and expanding seven existing agreements, including with trading partners such as Canada, the EU, the US, alongside Australia and the UK.
• Government officials maintain that “a majority” of FTAs under negotiations are “comprehensive” and cover goods, services, investment, IPR, etc”. Non-Tariff Measures, regulatory procedures and trade facilitation are part of such negotiations.

5. Tonga Volcanic Eruption

UPSC Syllabus: PRELIMS: Geography | Volcano

Sub Theme: Tonga volcano | UPSC

Hunga-Tonga-Hunga-Ha’apai volcano has erupted regularly over the past few decades. During events in 2009 and 2014/15 hot jets of magma and steam exploded through the waves.

A violent eruption of an underwater volcano on January 15 in Tonga kingdom has spread shock waves, quite literally, around half the world.

Why are the volcano’s eruptions so highly explosive, given that sea water should cool the magma down?

• If magma rises into sea water slowly, even at temperatures of about 1200 degrees Celsius, a thin film of steam forms between the magma and water. This provides a layer of insulation to allow the outer surface of the magma to cool.
• But this process doesn’t work when magma is blasted out of the ground full of volcanic gas. When magma enters the water rapidly, any steam layers are quickly disrupted, bringing hot magma in direct contact with cold water.
• Volcano researchers call this ‘fuel-coolant interaction’ and it is akin to weapons-grade chemical explosions. Extremely violent blasts tear the magma apart. A chain reaction begins, with new magma fragments exposing fresh hot interior surfaces to water, and the explosions repeat, ultimately jetting out volcanic particles and causing blasts with supersonic speeds.
• The caldera is a crater-like depression around 5km across. Small eruptions (such as in 2009 and 2014/15) occur mainly at the edge of the caldera, but very big ones come from the caldera itself. These big eruptions are so large the top of the erupting magma collapses inward, deepening the caldera.
• The latest eruption has stepped up the scale in terms of violence. The ash plume is already about 20km high. Most remarkably, it spread out almost concentrically over a distance of about 130km from the volcano, creating a plume with a 260km diameter, before it was distorted by the wind.
• This demonstrates a huge explosive power, one that cannot be explained by magma-water interaction alone. It shows instead that large amounts of fresh, gas-charged magma have erupted from the caldera.
• The eruption also produced a tsunami throughout Tonga and neighbouring Fiji and Samoa. Shock waves traversed many thousands of kilometres, were seen from space, and recorded in New Zealand some 2000km away. Soon after the eruption started, the sky was blocked out on Tongatapu, with ash beginning to fall.
• All these signs suggest the large Hunga caldera has awoken. Tsunamis are generated by coupled atmospheric and ocean shock waves during an explosions, but they are also readily caused by submarine landslides and caldera collapses.

Location

• Hunga Tonga–Hunga Haʻapai is a volcanic island in Tonga, located about 30 km south of the submarine volcano of Fonuafoʻou and 65 km north of Tongatapu, the country’s main island.
• The volcano is part of the highly active Tonga–Kermadec Islands volcanic arc, a subduction zone extending from New Zealand north-northeast to Fiji.
• It lies about 100 km above a very active seismic zone.
• The island arc is formed at the convergent boundary where the Pacific Plate subducts under the Indo-Australian Plate.