The Hindu Editorial Analysis- 11th March 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

An India-U.S. trade agreement and the test of WTO laws

Why in News?

Bilateral Trade Agreement (BTA) between India and the U.S. aims to enhance trade relations by fall 2025. 

 However, it must comply with WTO regulations, especially the Most Favoured Nation (MFN) principle and exceptions under GATT. 

 Free Trade Agreements and WTO Regulations 

•  The WTO's MFN principle prohibits discrimination between trading partners. 
•  FTAs create exceptions to this principle but must cover "substantially all trade" according to Article XXIV.8(b) of GATT. 
•  The BTA must eliminate tariffs and trade barriers on a large portion of trade to be legally valid. 
•  Selective tariff reductions without similar benefits to other WTO members would violate regulations. 

 Interim Agreements as a Legal Pathway 

•  WTO permits 'interim agreements' before finalizing an FTA under Article XXIV.5 of GATT. 
•  Interim agreements must be necessary for FTA formation and have a clear plan for full FTA establishment, typically within 10 years. 
•  If India and the U.S. notify the BTA as an interim agreement, it should lead to a full FTA in the future. 
•  Using an interim agreement to bypass WTO rules without genuine intent for an FTA is legally unacceptable. 

 The ‘Enabling Clause’ Exception 

•  The 'enabling clause' allows deviations from MFN rules by granting better market access to developing countries. 
•  However, the India-U.S. BTA does not qualify for this exception as it involves lowering tariffs for U.S. products rather than assisting developing nations. 
•  The Joint Statement indicates that India is reducing tariffs to benefit U.S. interests specifically. 

 WTO Compliance and Challenges 

•  The U.S. has previously engaged in 'reciprocal tariffs,' which contravene WTO rules by imposing matching tariffs from other nations. 
•  WTO principles like special and differential treatment (S&DT) grant developing countries more leeway in trade policies. 
•  Bound tariff rates at WTO limit the maximum tariff levels, and reciprocal tariffs would violate these commitments. 
•  India must adhere to WTO rules and avoid trade policies that contradict global trade laws. 

 Conclusion 

•  The India-U.S. BTA negotiations present a chance for economic collaboration, but strict adherence to WTO regulations is crucial. 
•  Improper structuring could lead to legal challenges at the WTO. 
•  India must ensure the BTA upholds multilateral trade principles and a rules-based trading system. 

Flawed food regulations fuel the obesity crisis

Why in News?

A recent economic survey has recommended the imposition of a ‘health tax’ on ultra-processed foods (UPFs) in India, aiming to reduce their consumption. The urgency for such measures is underscored by alarming statistics indicating that one in four adults in India is obese, with a similar proportion either diabetic or pre-diabetic. However, efforts to combat obesity are hindered by weak food marketing regulations and inadequate labeling practices.

Challenges in Implementing Food Regulations

Since 2017, various ministries and the food safety authority in India have struggled to implement planned labeling and advertising regulations for food products. The existing regulations remain unclear, allowing for the excessive marketing of unhealthy ultra-processed foods (UPFs). Despite previous commitments, India has yet to introduce front-of-pack warning labels on unhealthy food products, which would help consumers make informed choices.

Problems with the Indian Nutrition Rating System

The food safety authority proposed a 'health star' rating system in 2022, aimed at guiding consumers towards healthier food options. However, this system has several flaws:

• Misleading Ratings: The system rates food from half a star (least healthy) to five stars (healthiest), but it can falsely portray unhealthy foods as healthier. For example, high-fat, salt, and sugar (HFSS) foods may receive misleadingly high ratings, such as a sugary soft drink or a highly processed breakfast cereal getting two or three stars.
• Industry Influence: The rating system was developed under significant industry pressure, overlooking scientific input and evidence. This has compromised its effectiveness in guiding consumers towards healthier choices.
• Ineffective Global Models: Unlike successful global initiatives, such as Chile’s warning labels that have proven effective in reducing UPF consumption, the health star system lacks the necessary impact.

Inadequate Advertising Regulations

• India currently has four laws aimed at curbing misleading food advertisements, but these laws are not effectively enforced.
• The regulations lack clear definitions and thresholds for high-fat, salt, and sugar (HFSS) foods or ultra-processed foods (UPFs), making it difficult to regulate misleading advertisements.
• The Consumer Protection Act considers misleading advertisements as those that conceal important product information. However, current food regulations do not require advertisements to disclose critical information such as sugar, salt, or fat content.
• As a result, advertisements continue to target vulnerable groups, particularly children and youth, without adequately warning them about the health risks associated with consuming HFSS or UPF products.

Steps Needed to Strengthen Regulations

To strengthen regulations on food labeling and advertising, the following steps are necessary:

• Abolish the Flawed Health Star Rating System: The current health star rating system should be scrapped due to its misleading nature. Instead, clear and effective warning labels should be adopted to inform consumers about unhealthy food products.
• Define Limits for HFSS Foods: Establish clear definitions and limits for sugar, salt, and fat content in HFSS foods based on recognized health guidelines. This will help in regulating these products more effectively.
• Close Advertising Loopholes: Address the existing loopholes in advertising regulations by amending current laws or creating a unified law that specifically targets the promotion of UPFs. This will help in preventing misleading advertisements that target vulnerable populations.
• Launch Public Awareness Campaigns: Initiate public awareness campaigns in multiple languages to educate consumers about the risks associated with consuming UPFs. This will help in raising awareness and promoting healthier food choices among the population.

Conclusion

The escalating obesity crisis in India is not a result of individual failings but rather a consequence of inadequate policies and regulations. Without the implementation of stringent food regulations, the objective of controlling obesity by 2025 may remain unachievable. It is crucial to establish a robust regulatory framework that prioritizes public health, especially the well-being of children, over corporate interests. Immediate and decisive action is necessary to turn the vision of a healthier nation into a reality.