Category: International Trade

Financial experts argue that mainly two different factors: one of them is how trade strengthening economy that contributes to get benefits for winners who conqueror to current market, another assumption is occurred by the tremendous results for losers who suffer from losing exchange value in challenge with foreigners. It is crystal clear that the universal exchange and venture have been crumpled by macroeconomic factors such as technological issues, political and business borders around the world over in recent years. The most of trade companies and universal foundations are faced with difficulties between countries during trading, for instance, the framework of trading is restricted by especially some code tariffs that U.S. established for foreign countries.

Financial experts to a great extent concur that NAFTA has given advantages toward the North American economies. Regional trade increased sharply over the treaty’s first two decades, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016 (McBride, and Sergie). Cross-border investment has also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from $15 billion to more than $100 billion (McBride, and Sergie). But experts also say that it has proven difficult to tease out the deal’s direct effects from other factors, including rapid technological change, expanded trade with other countries such as China, and unrelated domestic developments in each of the countries. Debate persists regarding NAFTA’s legacy on employment and wages, with some workers and industries facing painful disruptions as they lose market share due to increased competition, and others gaining from the new market opportunities that were created.

According to Robert Lighthizer who a trade representative has announced that contract needs to be improved until the agreement could be done, during he was questioned by reaching out the decision (Hine). With implementing some negotiations with China and then getting some deals are given a promise in affordable prices and to fulfill commitments can be successful and convenience for world economy also. Moreover, the Trump Administration declared a deferral in the extra taxes, proposing an arrangement with China is meeting up; however, concerns have since a long time ago appeared that the organization may agree to prominent spot offers of U.S. items while viably giving auxiliary obstacles and China’s modern arrangements a chance to proceed.

NAFTA agreement classifies in 6 new ways which has an influence in U.S. – China trade contract. To begin with, Canada, Mexico, or the United States supplements are consisting of 75 percent which was rocketing up from 62.5 percent about manufacturing automobiles (AMADEO). For first arrangement implies the goals of improving production has to meet with deal that spread investment on car industry in United States. The considerable side of U.S. vehicle taxes should be accountable between Canada and Mexico, although car manufacturing does not recognize these prerequisites yet. The mission was resulted with a failure about selling cars to China due to higher costs while it was supposed to open new workplaces for U.S. employees in foreign country.

The second key point illustrates information about export which American farmers are demanded to sell their dairy goods such as milk powder, cheese, and other farms’ products in Canadian markets. In the terms of new trade agreement of Mexico and United States put their efforts keeping on price stable and get the entries to trade rural products among them. Moreover, sparing sales of milk production in overseas make Canada processing to commit the transportation costs and charges for the largest amount of volumes in the terms of contract of verge countries. One of the top priorities refers to agricultural biotechnology that provides bizarre innovations in modern world. In regards of strongest trade agreement between two countries was established by facilitating agricultural products and improving the better quality to get checkup license.

The third option is talking about successful side of Mexico when its trucks pass the border with U.S. must be checked to security standards. U.S. Parliament’s decision was implemented creating some Mexican employee groups who have license and accessibility to get in U.S. easily in the terms of trade law.

Next requirement is giving more assurance to trademarks and licenses that receive a larger number of rights having protected innovation consulted in the Trans – Pacific Partnership depraved by Trump Administration.

NAFTA was enabling U.S. medication companies export their products to Canada and it could face with universal challenge.

Sixth one is organizations can never again use Chapter 11 to purpose question with governments (AMADEO). The main special cases are U.S. oil organizations which are worried about Mexico could try to occupy whole oil trade. Be that as it may, the Chapter 19 debates settlement prevailed. So, this treatment rules have a bias evaluating accomplice’s abroad speculations (AMADEO). The U.S. Constitution is responsible to keep up those rights and panels for U.S. companies.

Between different countries which have presence in contemporary macroeconomic environment, there is no motivation behind why the exchange balance for any one nation would be connected efficiently to that for some other nation. Although, the U.S. dollar works as worldwide hold money, China’s monstrous net capital outflows have been related with net outside buys of dollar-named resources.

With the adjusted exchange, development in China’s fares is coordinated by development in its imports. More prominent import is recognized by the United States can be a rivalry in certain businesses, it additionally observes extended fares somewhere else in assembling and in other exchanged segments. China’s ascent may cause U.S. laborers to reallocate starting with one exchanged industry then onto the next however it would not cause them essentially to leave the exchanged area through that.

The United States’ exchange shortage in merchandise with the whole world rocketed up to its peak abnormal amount in history and the imported products including from China were expanding its shortfall to $ 891.3 billion and conveying a misfortune to Mr. President’s objective of narrowing the whole hole (Tankersley, and Swanson). Sooner, Chinese investment funds would be required to fall and utilization to ascend, as China’s net fares turned negative and U.S. net fares turned positive. The U.S. exchanged yield and work would grow, and the United States would start to compensate China for its prior acquiring. China’s rising near preferred standpoint would produce long-run work misfortunes in the U.S. exchanged enterprises in which China delighted in a long-run near favorable position in this long run situation, while exchange lopsided characteristics cause extra short-run U.S. business misfortunes interfered enterprises pushed incidentally into constriction. The expansion was driven by certain variables outside Mr. Trump’s control, similar to a worldwide monetary log jam and the general quality of the United States dollar, the two of which debilitated abroad interest for American products. The broadening hole was additionally exacerbated already by Mr. Trump’s $1.5 trillion tax reduction, which has been generally financed by government and it made him to height the exchange war a year ago (Tankersley, and Swanson).

During recent three years, China has fundamentally changed its monetary and exchange routines, it has as of late forced or keeping up various state-coordinated approaches that seem to misshape exchange and venture streams and may present huge dangers to financial and national security. These incorporate techniques, for example:

1. Strategy intercessions to influence the estimation of its money.
2. Broad utilization of endowments, speculation hindrances, obtainment inclinations, and other modern approaches to support certain organizations and enterprises, including state backing to contend in abroad markets.
3. Moderately inadequate implementation of licensed innovation rights.
4. Constrained innovation exchange as conditions for market access or speculation, including creation for fare back to the United States.
5. The U.S. companies, associations, and others for monetary reasons face with cyber-attack.

To put in the nutshell, distinguishing the effect of exchange with China on U.S. neighborhood work advertise results requires a substantial instrumental variable or, all the more comprehensively, a wellspring of conceivably exogenous variation for local presentation to import rivalry, controls for territorial introduction to innovative change, and acknowledgment that the assessed decreased structure effect might be lessened by work movement between areas.

Works Cited

1. AMADEO, KIMBERLY. ‘6 Ways Trump Changed NAFTA’. The Balance, 2019, https://www.thebalance.com/donald-trump-nafta-4111368.
2. McBride, James, and Mohammed Aly Sergie. ‘NAFTA’s Economic Impact’. Council On Foreign Relations, 2018, https://www.cfr.org/backgrounder/naftas-economic-impact.
3. Hine, Thompson. ‘Mexico | Trump And Trade’. Trump And Trade, 2019, https://www.trumpandtrade.com/category/mexico/.
4. Tankersley, Jim, and Ana Swanson. ‘In Blow To Trump, America’S Trade Deficit In Goods Hits Record $891 Billion’. Nytimes.Com, 2019, https://www.nytimes.com/2019/03/06/us/politics/us-trade-deficit.html.

Executive summary

Agribusiness is an industry in which the farmers are engaged in producing foods, storing them, manufacturing and distributing the product. International trade has brought lots of opportunities in agricultural business however this national business also faces certain challenges and problems in international trade. International trade affects on the culture of Nepalese agriculture and it also affects the productivity of soil so for this agribusiness should make some policies.

Introduction

Agribusiness is an industry in which the farmers are engaged in producing foods, storing them, manufacturing and distributing the product. Agribusiness in Nepal has for some time been founded on subsistence cultivating, especially in the hilly areas where laborers get their living from divided land for cultivation. Agriculture in Nepal is fundamental to the economy of this nation. Almost 80 percent of the populace depends on agribusiness here and there, yet there isn’t sufficient creation to help the populace. There is an interminable issue of kid ailing health and an expected 50 percent of Nepal’s kids are influenced by hindering. This rate is significantly higher in the precipitous areas. Agriculture plays an important role in Nepal’s GDP as most of people of Nepal are engaged in agricultural business.

International trade involves importing and exporting of goods from one country to another.

International trade is considered as a fundamental factor for quickening the way of monetary improvement and most nations are included into outside exchange to make work, raise affinity to spare, increment remote trade acquiring, and raise the efficiency of venture moving from less gainful use to high profitable use (Sharma, December 2005). This report talk about the agribusiness of Nepal as a national business and the goal of owner is international trade considering the opportunities, and strategies. This report will include the opportunities for Nepalese agriculture international trade as well as strategies along with the solutions to overcome the risk in international business. This report concludes with the outcomes and recommendations.

Findings

AgriBusiness in Nepal

According to Gauchan “Agribusiness is key to the vocation of Nepalese individuals, adding to around 36 % of the nation’s GDP and utilizing 66 % of its work power (MoAC, 2007). The significance of farming as the absolute most significant supplier of occupation for two-third of Nepal’s populace infers that the improvement in this division will decisively affect guaranteeing nourishment security and destitution decrease. It is likewise the primary wellspring of fare profit and salary of the least fortunate families (90% of the base utilization quintile). Farming along these lines is the primary source of national economy and the significant motor of professional poor development” (Gauchan, 2008). Nepal got the participation of the World Trade Organization through the arrangement procedure in 2004 and the target of Nepal in accomplishing the enrollment was to broaden its trade and to change the exchange system (GC, 2018). The agricultural products exported from Nepal are floricultural products, tea and coffee, medicinal herbs and oils, and vegetable products and these products are mainly exported in India and China as Nepal’s three sides are surrounded by India and other by china.

Agribusiness Opportunities in International Trade

Nepalese people grow lots of agricultural products so they have lots of opportunities in international trade. Lentils has a high demand on South East Asia so Nepal has an opportunity of exporting high number of lentils that are grown in Terai region of Nepal same as the spices like cinnamon, turmeric, cardamom are grown in Nepal which has high market internally. In beverage Nepal is rich in tea farming which is in Darjeeling and which is considered as one of the best and fresh tea in world. This is exported more in Europe and also has an opportunity to grow its business in other sectors as well. Now a day coffee farming is gaing popularity and the demand for coffee is also high which shows the way for coffee farmer to expand their business nationally and internationally. From the historical period, Nepal is known for its medicinal herbs and in this modern world its difficult to find the fresh and good medicinal herbs so as being rich in such agriculture people have chance to grow their market and enhance their business.

Recently it is also showed that Nepalese have the opportunity of ginger farming. The nation creates the fourth most on the planet, to be precise, and this is following its a whole lot bigger neighbors India and China, just as Indonesia. The new space in Jhapa in eastern Nepal is arranged at the country’s ginger generation focus, and is accessible to neighborhood ranchers who beforehand didn’t approach the measures of water and innovation required to wash their yields or data about better agrarian practices, Presently, they can clean reap of earth and grime, along these lines preparing the valuable roots for trade and, significantly, higher deals costs (Deanna Ramsay, 2019). Many countries are being interested and some has invested also for this business.

The other more opportunities for Nepal by doing international trades are:

• Chance to do business and be business partner with outside companies
• Development of institutes like financial and others
• Development in working pattern from traditional to modern
• Development of agricultural equipments
• Export pattern change from crude material to prepared mechanical products
• Higher focused of specialty items
• Development living standards of people

Strategies of Agribusiness to enter in International trade

While moving national business to international trade it definitely need to do preparation research about the markets, their culture and other information. Thus the strategies will help national business to cope in international trade and expand their business internationally. Some of the strategies are below:

· Developing AIC(Agribusiness Innovation Centers)

AIC is an instrument to expand the aggressiveness and development of spearheading inventive development situated little or medium agro-handling ventures that can possibly turn into an industry pioneer, These small and medium enterprises would translate item, procedure and plan of action advancement into improved items and bigger piece of the pie in existing markets or section into new markets and improvement of new items for existing or new markets (Shashi Bhattarai, 2013). This will help national business to know more about international trade and helps to overcome the problem.

• Another strategy is to partner with international company which help them to know better as working with members having knowledge of the international business makes national business easy to understand
• Tightening the security as focused more on the quality of products and taking feedbacks of local people as well as international customers about the products.
• Private areas inclusion for the export of value merchandise and market organize, Concentrated on Market situated and aggressive agriculture, focus on extraordinary financial zones for agro-industry improvement Commercial, Organic and Export Areas and High priority on expansion, modernization, commercialization and advancement of farming area these are some other strategies.

Threats of Agribusiness

While expanding business to international market the companies or the business may face some problem and also they may occur risk while trading. Despite of various advantages it also has threats which are pointed out below:

• Fast changes in the inclination, quality and principles of shoppers likewise represent a danger to Nepalese horticulture. Little and asset poor exports can’t keep pace with the difference in inclination, quality and gauges requested by the buyers of international.
• Nepalese agriculture is exceptionally reliant on climate conditions, a circumstance which is upheld by the variety in the rural development rate, atmosphere change is the extraordinary exogenous factor compromising the horticultural segment. while moving to international trade this climatic reason can be the threat for agriculture
• An absence of ‘funnel system’ (concentrated subsidizing component) in agrarian improvement may represent a risk to the achievement of exporting products in time.
• The horticultural approaches of the neighboring nations additionally undermine Nepal. Substantial appropriations to the ranchers of neighboring nations, straightforwardly hamper the aggressiveness of Nepalese farming.

The above mention is some of the threats Nepal can face while doing international trade. Risk for agriculture in international trade can be unhealthy distribution of the products. For international market more agricultural products should be produced as a result the distribution of products in domestic market can be slow. The quality of soil of farms decreased as lots of product is produced and pesticides are used. While entering the international market it may lose its agribusiness culture and its importance. Nepalese agricultural products may not fulfill the requirements of an international market on time .international trade includes lots of tariffs and exchange rate also keeps on changing which may affect the business.

Problems of agriculture in Nepal

There is a gigantic lack of dispersion, augmentation channel, information, creation and rivalry. Furthermore, there is likewise an absence of appropriate farming foundations like storerooms, advertise focus, streets, media transmission and water system systems. The administration strategies put lacking imperatives on horticulture rehearses which just go to show poor administration. The condition of creation of horticulture is influenced by rare or little preparations, old innovation, absence of homestead administrative abilities, divided and little measured land, strategy level limitations, and above all absence of data administrations.

Possible outcomes of International Agriculture Business

The importing and exporting of the agricultural products like tea, coffee, fruits, ginger, flowers etc in other countries makes the good relationship between two countries. The Nepalese products also get chance to explore more not only nationally but internally. International trade increases the life stlye of Nepalese people and also gave them chance to develop and show their talent. Though there are disadvantages of international trade it can be overcome by making different policies in country and applying different principles. There has also more opportunities for agriculture in this modern era as the new innovative technologies like drones and other machines provide more opportunities for people to do different and something good and new. The capacity of this industry to adjust, improve and structure effective joint efforts will keep on supporting a solid and prosperous country with practical nourishment security.

Recommendation

Based on the challenges and risk faced by the agricultural business some sort of recommendations is:

1)reinforce exchange arrangements, particularly reciprocal; 2) Strengthen the specialized limit of local non-duty boundary (NTB) and different business condition steady foundations; 3) Strengthen the fare limit of ‘Comprehensive’ send out potential merchandise and enterprises; 4) Strengthen the GoN’s ability to organize and oversee Trade-Related Technical Assistance (TRTA) and Aid for Trade (AfT) (Trade and development strategy, 2014). By strengthening these boundaries and fare limits it can overcome its challenges. As the climatic changes is one of the problem for agriculture Nepalese agriculture should adopt the international system as well like growing fruits in managing temperature like greenhouse and others so that it can deliver the products on time. The private sectors or institution should be more concern on export quality and making good relationship with other markets. The marketing networks are also need to increase in order to be good in international trade. The food security of Nepal is less than that of international business so they should improve the food security and government should make policies regarding agriculture. Still the agriculture business in Nepal is traditional so the advanced equipment should be used to increase the productivity of the product and deliver the goods in time.

Conclusion

In conclusion with the above disused point, agribusiness in Nepal has effect more on its economic factor. International trade in agribusiness has changed a lot in Nepal and it also has lots of opportunities due to international trade. To overcome the problems and risk in international trade private sectors should be more focused on quality as well as advanced equipment should be used. Agribusiness has still more opportunities in this modern world.

References

1. Deanna Ramsay, M.,. (2019). IN NEPAL, TRADE-IN GINGER IS SPICING UP LIVES. Kathmandu: Trade for Development News.
2. Gauchan, D. (2008). Agricultural Development in Nepal: Contribution to Economic. Socio-Economic Development Panorama, 49-64, vol 1.
3. Federation of Nepalese Chambers of Commerce and Industry(FNCCI). (2019). Agriculture Opportunities. Retrieved from http://www.fncci.org/agriculture-148.html
4. GC, A. (2018). Nepali International Trade Before and After the World Trade Organization. vol1.DOI: 10.31015/jaefs.18020
5. Hibbett, K. (2018). Introduction of agriculture in Nepal. Retrieved from https://borgenproject.org/importance-agriculture-in-nepal/
6. Piya, S. (2012). Challenges and Opportunities. Retrieved from https://www.researchgate.net/publication/280010462_Agribusiness_in_Nepal_Challenges_and_Opportunities
7. Startups Nepal. (2018). Agribusiness and Problem facing Agriculture in Nepal. Retrieved from http://startupsnepal.com/stories/entry/agribusiness-and-the-problems-facing-agriculture-in-nepal
8. Sharma, O. (December 2005). Foreign Trade and Its Effects on Nepalese Economic Development. the journal of Nepalese business studies, vol ii no.1.
9. Shashi Bhattarai, N. N. (2013). Promoting Agribusiness Innovation In Nepal. Washington, DC: infoDev, Finance and Private Sector Development Department.

The rice tariffication law, or RTL, is a law that was signed by Philippine President Rodrigo Roa Duterte in February 2019. It is said that the law would lower the tariff of the imported goods produced by foreign investors so that they would be able to import their goods at a lower price which would result to a lower marketing price. This law is made to help with regards to the shortage of rice which is why the tariff is lower in order for the imported goods to be much cheaper in the market so that even the poor people would be able to buy rice that has good quality since it is coming from other countries. Now, in regards to this law, is it really a good solution for the country since the price would be cheaper or would it have a bad effect to our own economy?

Due to the fact that the RTL lowers the tax of the imported rice, it would be cheaper than the local rice that is being planted by our farmers here in our country. The consumers would much more prefer to buy the imported rice since it would be cheaper and would have a high-quality grade due to the milling machines being much better than those that are being used here in our country. As a result of the consumers buying the imported goods, the local goods would be low in demand resulting to a much higher price and lower quality. This is also the reason why many of our farmers are having troubles due to the demand being low which results to less income. This is the reason why I disagree that the rice tariffication law would be the solution that would help our country. Why is that so? Well, since we would be supporting mostly the goods that are being imported to our country, the farmers will become poor and in the worst-case scenario, they wouldn’t have a job resulting to the down fall of our economy. Now, let’s think of what may happen in the future. Let’s say that the country that is importing goods to our country were to have a higher population due to the increase of birth rate, those countries would stop importing those goods since they would be having a shortage due to rise of their population. If that would be the case, what do you think would happen to our country? Our country would experience great famine since we would have a shortage of supplies due to the lessening of imported goods.

Therefore, I strongly disagree that the rice tariffication law is a good solution that would help our country because our own farmers are having a crisis due to less income because the consumers would prefer to buy the imported goods because not only would they be having a much higher quality, it is also cheaper than our local goods.

Rice imports are the number of metric tons pertaining to rice products entering a country’s borders in a given year. Rice has been a major food for us. Here in our country, there are a lot of convenience food chains that offer ‘unli rice’ to people who love to eat rice. We export rice to other countries to continue the flow of dollar in our country and be able to have connections to other countries to supply our needs.

I chose this topic because I see the issues regarding the overpricing of rice, and the beyond reasonable payment to the farmers. The exporting of products has suddenly tightened because of the issue regarding the overpricing of products specifically rice. The Rice Tariffication Law ensures food security by liberalizing rice imports and making farming globally competitive. According to Jire Carreon from Rappler, “the oversupply of rice in the market already means prices should drop”. However, Co noted that retail rice prices are still somewhat high. People are too greedy when it comes to money that even though they have received too much supply instead of decreasing the price they tend to increase it even higher. Now we cannot export rice easily because how can we help others if we are the one who is in need of help.

The Rice Tariffication Law is the reason why our local farmers have low salaries. This law makes all the imported rice cheaper because it causes the other countries to pay tariff tax when want to export their rice to our country. For Southeast Asian Countries they pay 35% tariff while non-ASEAN members pay 50% tariff or the tariff dictated by the World Trade Organization. According to Arida, “The results revealed that common problems encountered by rice farmers were: the high cost of inputs, low price of palay, lack of capital, labor problem, lack of post-harvest facilities, pest and diseases, and irrigation system”. The farmers are obligated to sell their palay to the businessman at a low cost simply because they need the money to supply their need and to pay their debts. Now the farmers are the one who is starving because of the high cost of inputs, and the low price of palay. The government does not make any necessary action regarding this issue Instead, they are arguing about non-sense things. The farmers need a lot of support from the government because of the things that they need that they cannot afford.

In order to solve this problem, the government should remove the Rice Tariffication Law and focus more on our local farmers instead of being busy on how to make imported rice affordable. With the imported rice being cheaper the consumers will buy the cheaper rice instead because they need to pay a lot of bills, and in order to save money, they will buy the cheaper one because it is affordable. And no one will buy our local rice. But as a consumer, and as a Filipino, in order to help our local rice farmers, we need to tell the government units that instead of buying imported rice, they should buy rice in our local farmers. Having more markets that sell local rice can also help. With the power of media, the information about the problems and situation that deals with our local farmers are in need to be spread so that other media users can have an idea or knowledge about the situation that our country is dealing with. Asking fast food companies to buy local rice will be extremely helpful since many Filipinos eat at fast food chains.

Rice importations have some benefits and side effects in our country. It increases our rice stocks and helps consumers because of cheaper rice but our local farmers are the ones who are not getting any benefits to it. In conclusion, we should not be relying on other countries to get some huge amounts of rice because our local farmers are the one that is being most affected by it, instead we should appreciate more and give more attention to our farmers because they are the one who is suffering to this kind of situation.

As students we can help our local rice farmers that are facing this crisis by using modern technologies, with the use of technology these days spreading the information to other people about the crisis of our local farmers can be an easy task for everyone. The other people who get to know about the situation will also be encouraged not by just spreading the news but also making action to it. We can also help them by asking the government to focus more on our local farmers instead of how can we import rice. We know that with the power of youth our government will listen to us.

In the Philippines you can’t call a ‘meal’ without rice. Most Filipinos eat three meals a day. Breakfast, lunch and dinner with the presence of rice. But what would happen if the country did not provide its citizens with enough rice to eat? As the population of the Philippines is increasing, the amount of rice grown by local farmers is becoming insufficient for the total population of our country.

According to the Department of Trade and Industry, the Philippines is a strongly committed member of the WTO (World Trade Organization) since January 1, 1995. The World Trade Organization is an intergovernmental organization that deals with the management and arrangement of international trade between two or more nations. This is one of the reasons why the Philippines allow other countries to import their rice, another reason is for the people to have an extensive selection and also sustain the right supply for the population in the Philippines. We do agree that the implementation of the Rice Tariffication Law helps our economy to reduce inflation. However, there is the other side of the story. There are effects of the action, mainly is the drastic dropped in the prices for the local rice, inadequate of capital, absence of provision from the government, and for the farmers that are struggling to compete in the market enduring labor causing many of the farmers to protest and speak for their justice to make a difference that way it the government can come up a solution for the problem.

The Rice Tariffication Law

“An act liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on rice, and for other purposes”. The law was implemented because of the price hike that caused rice to strike Php70 per kilogram last year. To terminate the said rising of inflation the Government officials passed the Rice Tariffication Bill. The law enables the country to have a sufficient supply of rice and provide lower domestic price in order for the citizens to afford in a much lower price. By allowing many rice competitors to enter the market, the retail of rice will decrease as the supply increase.

Consequence of Rice Importation to Our Local Farmers

Although rice importation helps our economy to reduce inflation, it cannot deny the fact that the excess supply of rice may cause a major impact to the livelihood of the country’s local farmers. Philippines is known as one of the agricultural countries in the world because 47% of the land can be a source of food crops. But why the farmers of our country are crying and seeking for help? How does the mentioned law affect their lives? ‘No to rice importation’; the government is still talking over the particular matter mainly because it contradicts the matter of exportation which is were authorized by being a part of the WTO (World Trade Organization).

As the cheap rice imports are being sell to the market the consumers will no longer support the rice produced by the local farmers, that’s why the retail price of the farmer’s rice dropped enormously. Some province in our country sell rice as low as Php7 to Php8 per kilogram even though the original production cost is Php12 per kilogram.

Conclusion

To sum up, the implementation of the rice liberalization law may help our country to resolve the issue of rice inflation, however allowing international farmers to compete with our local farmers may cause a major damage to our farmers lives. In order for our agriculture to grow and foster we should harbor and nourish what’s ours and not depend on other countries’ imports. We value farmers as much as how we value our teachers, doctors, lawyers, engineers, and so forth. To work out the issue there are various solutions speaking of providing more supply and need for agriculture specifically to the farmers, greater value for local palay, and more importantly to hold on what’s ours.

How do race and gender structure the international trade regime?

Race and gender are two forces which structure the international trade regime. In order to allow for a deeper analysis of the trade regime in consideration to development and neoliberalism this essay will focus on race rather than gender, to suggest these concepts give the regime an inherent racial bias. This is important because to speak of a post-colonial world conjures the inaccurate notion that decolonisation in the 20th century created a system of equal power for all states. However, when the international trade regime is considered, assuming a “decolonization of the world” overlooks continuing racial and colonial-esque hierarchies (Grosfoguel, 2011, p.15.) This essay will use post-colonial critiques to argue that race structures the international trade regime because it is based on Western ideas and therefore reproduces Western power. This will be shown by discussing race in relation to the ideas of development and neoliberalism, institutions and current international trade. Comment by Author: Very clear introduction

The word ‘race’ is used in a broad manner to refer to a historically curated division white West and the non-white rest of the world. Race does not refer to a specific population but rather to an Othering of Non-Western identity into the difference against which the West identifies and positions itself (Keyman,1995, p.74-5.) By recognising that this division of race is Western created it allows us to assume that an attitude of othering was implemented into those regulations and institutions created by Western powers in the post-war era. Comment by Author: Might have benefitted for additional references here

Neoliberalism, Development and Race

The international trade regime is made up of ideas, rules and institutions which shape trade interactions. Two of the most powerful ideas in the current regime are neoliberalism and development. When these ideas are considered, they are shown to favour Western superpowers and be grounded in the racialised ideas of the colonial era. This is important given how the shape the institutions and rules of the international trade regime.

Development is a loaded term. Its roots lie in the paternalistic colonial discourse of a ‘modern’ West and ‘primitive’ Other which requires Western intervention to become modern. Although paternalistic empire did end with mass decolonisation of territories, the idea of a need to modernise remained in the emerging international trade regime. This is seen in the division of industrial, capitalist ‘developed’ countries and ‘developing’ countries with economies based on agriculture and commodities yet to become fully industrialised or capitalist (Weinstein, 2008, p.2.) The idea of the non-Western world as lesser and backwards is part of race discourse which equates modernity with Western countries and positions them – and in this case their economics – as superior. Therefore, the international trade regime came to be structured by race because of the influence of these beliefs which allowed the West to position themselves as the dominant influence upon the global economy. As the post-war international trade regime was formed it was done so with the expectation that newly independent countries would have work towards being ‘developed’ Western style economies, thus maintaining something of the modernisation rhetoric of the colonial era. Comment by Author: More attention to referencing would help support your statements, highlighting the debates in the literature and where your argument is situated Comment by Author: Very good point Comment by Author: This is a very good point. Referencing is lacking.

Since the 1980s and the influence of Regan’s US, neoliberalism as an idea has come to hold influence within the international trade regime. Commonly neoliberalism is thought of as minimising the role of the state and allowing for mass privatisation, liberalisation and deregulation. However, Slobodian suggests that neoliberalism’s aims run deeper than this and that it is concerned with “the meta-¬ economic or extra-¬ economic conditions for safeguarding capitalism at the scale of the entire world” creating institutions which entrench states in a new system of competition after colonisation’s end (2018, p.2.) Accepting this definition means accepting that the post-colonial utopia of cooperation and trade on equal terms cannot be taken at face value. Instead, neoliberalism is a means by which wealthy states maintain control over international trade without colonies, by creating a system which privileges their own economies. It shows a continuing Western hegemony in global economics which believes in the benefits of the free market but does not give full consideration or care for the challenges such competition presents to poorer countries. Neoliberalism’s western bias allows for economic power to remain centred in the old colonial metropoles. Neoliberalism is therefore underpinned by racialised thinking and so too then is the international trade regime that neoliberalism has created. Comment by Author: Referecing needed Comment by Author: Very well argued Comment by Author: The link between the two could have been made more apparent in your writing by summarising what you had discussed above

Both development discourse and neoliberalism are based upon racialised ideas as they show a Western assumption of a need to make the non-West more like themselves. The international trade regime is therefore structured by race because it operates under the assumption that the West’s ideas of development and neoliberalism are necessary to trade by virtue of superiority.

Race and Institutions

This Western superiority and hegemony have been maintained by international institutions which form part of the trade regime. These institutions were formed by Western states and so tend to reflect their values and priorities. Most significantly this has allowed development discourse and neoliberalism to shape international institutions -bringing with them their racial bias. Comment by Author: This could have been made clear earlier in the essay, maybe supporting it with some examples, such as Bretton Woods institutions

The alignment of Western values and the agenda of international institutions is seen in changes to the General Agreement on Tariffs and Trade (GATT) which in the 1980s shifted from focus on embedded liberalism to neoliberalism. The 1986 Uruguay round of negotiations focused less on development as industrialisation and instead pushed trade liberalisation as the main developmental goal. While Michalopoulos suggests that this round saw developing countries engage more than ever before with the GATT and laid grounds for their effective integration, I side with the argument of Mattoo and Subramanian that for the smallest and poorest countries this brought them into a system where they were forced to liberalise important sectors of the economy whilst never gaining any bargaining power (1999, p.117; 2004,p.390.) This serves as evidence of Slobodian’s belief that neoliberalism is a means embedding Western capitalism across the world after colonialism’s end. Old colonial powers use international institutions to promote their economic policies as the only right and valid way to run an economy. They create an international trade regime which pressurises non-Western countries to follow a Western based model. This shows that institutions help uphold colonial power relations by holding Western ideas as unquestionably superior whilst overlooking that they are based on desires to maintain power over the racialised other. Comment by Author: Good empirical support to your argument, well chosen. Referencing to literature on this shift needed Comment by Author: You presented a very strong argument and this sentence is a good way to summarise it and open up to more specifics. Well done!

This expectation of non-Western countries to follow a Western model has been carried into the WTO era by the institution’s ‘built in agenda’ which means negotiations are not undertaken in segmented rounds but rather on a continual basis. This is symptomatic of assumed Western universalism which fails to fully address the potentially negative impacts of perpetual liberalisation on the poorest WTO members. This upholds a trade regime structured on race by pushing Western economics as the only legitimate means of trade. This is highlighted by Rolland who suggests that the rhetoric of allowing Special and Differential Treatment for poorer countries ascending to the WTO, is undermined by assentation packages which demand greater liberalization commitments than other members without transitional periods. She asks, “why insist on the fiction of a one size-fits- all approach to trade liberalization?” (2012, p.88.) One answer I propose, is that the one size fits all approach is the result of the WTO being shaped by Western hegemony. On the one hand, the WTO has failed to be designed with poorer countries in mind because of the influence of neoliberalism and its Western universalism. However, even more importantly when considering how race structures the international trade regime is that the narrative of development is essentially a Western created fiction. Development, while a powerful idea has no real tangible or legal definition (Rolland, 2012, p. 78.) Instead it is a racist ideological ideal which, having been pushed by the West for decades, has been internalised as a norm by poorer countries – namely former colonies – who join the WTO believing it will help them achieve this elusive development. However, as Rolland shows, this only allows for them to be exploited by the terms of assentation. This exposes the reality of the development narrative as a colonial relic which serves only the West who created and control its terms. This means race structures the international trade regime by allowing continued institutionalised unequal trade arrangements between the West and the rest of the world under the faulty guise that it will prove beneficial to all. Comment by Author: Referencing needed Comment by Author: Year of paper needed in this sentence too Comment by Author: Convincing ending. The only suggestion would be that you could have used the world “institutionalised” from the beginning of the essay, as it summarises what you have previously expressed with entire sentences.

Race and Trade

The WTO Doha round was portrayed by as a beneficial to small economies because it looked to place development at the heart of the trade agenda. However, I argue that since its conception the WTO has made neoliberalism the key to the trade regime. As a result, it has created an international trade regime structured along a racial divide. The WTO is based on the neoliberal push towards universal liberalisation and emphasises trading along the lines of comparative advantage (Jansen, 2002, p.176.) This benefits countries with a comparative advantage in producing high value items which tend to be Western nations. By contrast the system of comparative advantage creates difficulties for countries with a comparative advantage in low value, agricultural goods or commodity products. This is true for many former colonies, who then find they must trade more product for low prices in order to access Western produced high value goods. By promoting such a system, the WTO has reinforced race’s role in the international trade regime by deepening the divide between the West and rest of the world through unequal terms of trade. Although the WTO preaches development, in reality it has proved an effective mechanism for implementing neoliberalism in the sense of Slobodian’s system of competition. Competition shows that the regime is structured by race by highlighting that the regime continually favours the West and therefore maintains its economic power while preventing the growth of other countries. This was seen in Doha where the West used settlement on agricultural trade as a bargaining chip to gain access to goods and services markets in poorer countries (Alessandrini, 2009, p.9) This shows that so long as the West holds dominant institutional power racially divided unequal terms of trade will continue as the West pushes the neoliberal agenda and therefore race will remain a structuring factor of the international trade regime. Comment by Author: Definition needed Comment by Author: Referencing is needed here as well. Comment by Author: Keeping the punch of the essay, well done! Comment by Author: This point could be expanded to make it even stronger

Conclusion

What I have sought to argue is best summarised as a three-step process.

1. Racialised ideas underpin the Western concepts of development and neoliberalism which are important to international trade.
2. The West have created international trading institutions based on these racialised concepts.
3. The international trade regime which these institutions facilitate is structured by a racial divide of West and rest – with the West maintaining advantage.

The current international trade regime does not exist in isolation from the colonial era, this was where the West established its global power. The post-colonial era has not brought down this power but rather has changed the mechanisms by which the West maintain it. Economic development and neoliberalism have become the West’s ideological tenants which it seeks to export through the institutions it has created. It is the assumed Western superiority of these ideas and universalist lack of consideration for poorer nations which means they facilitate a racial divide in global economics of West vs. the Rest. The West’s racialised thinking underpins ideas and institutions and therefore race structures the international trade regime because the regime is one based on inequality of West and Rest. That is why it is necessary to understand that race in the international trade regime is not a particular people’s but rather the Other against which the West positions itself. The international trade regime is structured by race because it is based upon the West’s ambitions to remain superior to this other. Comment by Author: Very good to highlight the historical connection between current international trade regimes and past means of gaining and retaining power through colonisation! Comment by Author: A bit of a repetition, but it does convey the point. You had began the essay using the West and its Othering attempts, here you talk about Rest. It’s still easy to understand what you mean, but I recommend consistency as much as possible.

Bibliography

1. Alessandrini, D. (2009). Making the WTO ‘More Supportive of Development’? The Doha Round and the Political Rationality of the WTO’s Development Mission. Law, Social Justice and Global Development Journal. Volume 1 (13) pp. 1-11. Available at: https://link-gale-com.ezproxy.is.ed.ac.uk/apps/doc/A207350766/AONE?u=ed_itw&sid=AONE&xid=a86bc086 (Accessed 13/10/2019)
2. Jansen, M. (2002). ‘Defining the Borders of the WTO Agenda.’ in Daunton, M., A. Narlikar ad R. Stern The Oxford Handbook of the World Trade Organization. Oxford: Oxford University Press. pp.161-187. Available at: DOI: 10.1093/oxfordhb/9780199586103.001.0001 (Accessed 13/10/2019)
3. Mattoo, A. and A. Subramanian. (2004). The WTO and the Poorest Countries: The Stark Reality. World Trade Review. Volume 3 (3). pp.385-407. Available at: DOI : 10.1017/S1474745604001958 (Accessed 05/10/2019)
4. Michalopoulos, C. (1999) The Developing Countries in the WTO. World Economy. Volume 22 (1). pp.117-143. Available at https://doi-org.ezproxy.is.ed.ac.uk/10.1111/1467-9701.00195 (Accessed: 05/10/2019)
5. Rolland, S. (2012) Development at the World Trade Organisation. Oxford: Oxford University Press. pp.77 – 88. Available at: https://www-oxfordscholarship-com.ezproxy.is.ed.ac.uk/view/10.1093/acprof:oso/9780199600885.001.0001/acprof-9780199600885 (Accessed 13/10/2019)
6. Slobodian, Q. (2018). Globalists: The End of Empire and the Birth of Neoliberalism. London: Harvard University Press.
7. Weinstein, B. (2008). Developing Inequality. The American Historical Review. Volume 113 (1). pp 1-18. Available at: https://www.jstor.org/stable/40007295 (Accessed: 30/09/2019)

Around the world, the consumption of sugar is necessary and played an important role in the economy. However, but we as consumers don’t know exactly the origins of these important products that are sugar and cotton in the 18th century. In this essay, I’m going to discuss the importance of sugar, the role that played slavery in the sugar plantation, how cotton benefits the economy and also, how sugar benefits the economy. The human doesn’t know exactly the history of sugar and how sugar became an important product globally. Some people may ask what is sugar and why sugar is valuable? I would say that sugar is a crystalline substance that is very sweet and is obtained from various plants, such as sugar cane, etc. and is commonly used as a sweetener in food, desserts or drinks. The sugar is important because it was the motor of the slave commerce that transported millions of Africans to the Americas in the 16th-century. In this essay, I’m going to discuss a book called sweetness and power by Mintz and what he learned on his trip about the people of the Caribbean and their products. Also, secondly, I’m going to discuss today capitalism was born as slavery which was very important because it talks about cotton and the importance of cotton by Beckert and finally the rise of slavery by Gibson that explain how hard was the regimen in the plantation in the 17th century and the beginning of sugar production in the Caribbean.

The history of Mintz is very interesting and important because it talks about the history of the Caribbean and how he learned about some of the products that we consumed nowadays. Mintz says that “his book has an odd history. He studied the history of the Caribbean and some of the tropical products, mainly agricultural since the European conquest” (Mintz. 1985). Mintz worked with people of the Caribbean he was learning about those people, how they transformed their life for the conditions they were livening. Mintz liked to know more about sugar, rum, coffee, and chocolate. The history of the Caribbean and their products is very interesting and we can learn a lot from this reading some of the points that caught my attention is that Mintz was learning about the culture of the people of the Caribbean and what caught his attention was their products such as sugar, rum, coffee and chocolate which is still very important products globally. In the year 1800, Puerto Rico and Cuba succeeded Haiti, after the Haitian Revolution, because they have the most important world sugar producers. Also, Mintz learned that north Americans had penetrated most deeply into the vitals of pre-1898 Puerto Rican life.

According to the article titled “Today’s capitalism was born in slavery” written by Beckert talks about how by the year 1830 one million Americans were enslaved, grew cotton. That was a huge number of Americans enslaved in 1830 and they have to work. One of the* most important exportation in the United States was Raw cotton. A fugitive slaved name, John Brown observed in 1854: “When the price of the cotton rises in the English market, the poor slaves immediately feel the effects, for they are harder driven, and the whip is kept more constantly going” (Beckert, p. 2). I can say by this that when the price of the cotton increase the poor slaves are the one that suffers because is more work for them and they have to be in constant movement. One point that caught my attention is when the author talks about the economy of the United States and he says that like cotton and slavery, became the key to the U.S economy and this moved to the center of the world because thanks to the cotton and slavery U.S economy increase. Capitalism with slavery also played an important role in the United States and in more countries. Our modern world originated in cotton factories, cotton ports, and cotton plantations of the 18th and 19 centuries. In other to understand the creation of the cotton and how this empire grew, we need to extend our view to the world at large and to the history of global capitalism.

According to the reading named “the rise of slavery” written by Gibson is letting us know about how cruel was the regimen in the plantation. African slavery was too big and extended to be ignored. By the beginning of the 1700 new lands were rich but what they don’t know if how this plantation operated because slavery plays an important role in the world. In the reading, there was a point that caught my attention which I didn’t know about it. When in the reading says that “slavery was a living death for millions of people and in the eighteenth-century things got worse because Africans had been enslaved in the Caribbean for more than 200 years” (Gibson, p. 4). I can imagine 200 years of slavery in the Caribbean that’s terrible. I know at that time a lot of slaves were sent to work in rural areas or in mines which is very hard work. I didn’t know by 1700, English ships had taken around 400,000 slaves from Africa. That was a lot of slaves at that time and that was a very impressive number of slaves at that time. Also, it was very terrible that a big number of them die in the sea and others were stolen by pirates.

The beginning of sugar production in the Caribbean was very important because after the Caribbean was first colonized and conquered by Spain in the 15th century, a system of sugar planting and enslavement were developed. The Caribbean turned into important colonies because of the demand for sugar cane products in Europe. Sugar is very valuable, necessary and important because few products derived from sugar cane, which can be used for tea, coffee, chocolate, and other products. Also, it can be used to make rum, which is an alcoholic drink that is very popular globally. Sugar plantation owners became very wealthy and the production increased and for that reason, they buy slaves to keep the hard work. Sugar was first used, only the wealthiest people consumed it. After 1650, the price of sugar decreased to the consumption and therefore production, increased as it became more available to the lower class.

What is cotton and why was it important? Cotton is one of the most important products in the United States. Cotton is soft and fluffy and grows around the seeds of cotton plants. Cotton was important because it is one of the first commodities in the world, after sugar and tobacco. The United States gained power and they have a connection with the western hemisphere due to the consumption of cotton because the U.S sold cotton to other countries. Our modern world originates in the cotton factories, and cotton plantations of the 18th and 19 centuries. Slaves contributed a lot in the United States and cotton became successful because slaves were the ones who used to work in the plantation and do the hard work. The trade between the Western hemisphere and Eastern hemisphere became absolutely incredible because the caffeine was produced by the northeast and the cotton was in the U.S which impact the economy and the economy of the United States increases because of the trade of these products.

Sugar is one of the most valuable agricultural commodities. Around 80 per cent of the world’s sugar is derived from sugar cane, grown by millions of small-scale farmers and plantation workers in developing countries. In some countries, sugar beet growers’ contracts with processors, which operate as farmer-owned cooperatives, require those who leave unharvested acres to pay a fee to the cooperative so it can pay its bills in leaner years. Sugar has been falling since October 2016 after more than doubling.

Sugar can be one of the most volatile commodities that trade on the ICE futures exchange. Since way back in 1971, the sweet commodity has traded as high as 66 cents per pound and as low as 2.29 cents. The most recent significant peak in the sugar futures market came in 2011 when it hit a high of 36.08 cents. Increased production then drove the price to a low of 10.13 cents in August 2016, which turned out to be a bottom. The U.S. government authorized the import of an additional 100,000 short tons of Mexican refined sugar due to the harvest issues in December 2019. Producers Western Sugar Cooperative and United Sugars Corp issued force majeure notices due to what producers have called the worst weather conditions in nearly two decades.

Sugar refinery in Egypt

Some UAE-based investors, along with Egypt’s Al Ahli Capital Holding, are investing $1 billion to set up a sugar refinery as well as develop agriculture land in Egypt. Jamal Al Ghurair, managing director of the UAE-based Al Khaleej Sugar, and other UAE investors will hold 70 per cent stake in the sugar refinery while the rest of 30 per cent will be controlled by Al Ahli Capital.

Demand and Supply

Weather and crop yields in those nations often determine the path of least resistance for the price of world sugar. Brazilian sugar companies are increasing their capacity to produce ethanol in the face of depressed global sugar prices and government policies expected to boost demand for the bio fuel. The two leading producers in the world are Brazil and India. The United States is the world’s third-largest sugar importer after Indonesia and China, buying 2.8 million tonnes in 2018-19, according to the U.S. Department of Agriculture.

How to invest?

Sugar is the sweet commodity depicting extreme volatility and it has a low correlation to stocks. One can buy ETPs, future contracts or buy stocks of sugar companies to invest. The price of world free-market sugar can be highly volatile, but many countries impose tariffs, quotas, and subsidies to aid domestic producers.

2020- 2021 trends

Two consecutive campaigns of lower sugar production and trade deficits are forecast in the European sugar market. A shift to ethanol in the 2018-19 season slashed Brazil’s sugar output by 9 million tonnes to a 12-year low and more switching to the bio fuel next season could help to wipe out a global surplus weighing on sugar prices. Brazil could also lose its crown as the world’s biggest sugar producer to India for the first time in 16 years, according to the U.S. Department of Agriculture.

Executive summary

The reason of penning this assessment is to develop the notice of the shoppers regarding international trade, finance and investment that they are on the brink of start-up. Capital allocation inside the UK domestic market and international free enterprise that area unit vital issue for an economy development, on the other hand it may be affected to various factors. Toward allocating capital inside the UK domestic market and international market, it needs to remember of however monetary markets work, furthermore as discussion on interest rates, exchange rates, market, capital market, exchange, bond market and FDI were explained and the way they will have an impact on the allocation of capital. The impact of Brexit on international trade, options of cash market, sorts of monetary markets, Purpose of monetary market, Main Beliefs of international trade, change the bank Model, ways of capital allocation, Impact of capital allocation, Evaluating rising economy that was picked from one in every of the Brisk countries (China) and looking out at the challenges that China encounters thanks to manufacture and their trade policies, the monetary crisis in China’s equity and debt markets inside China.

Background of financial markets

The financial market has been active since the first 1800s, however has become rather more necessary since 1970 once the international rates rose on top of historic levels. However, the go up in short-run rates, in addition to a regulated job on the speed that banks may buy deposits, resulted during a speedy outflow of funds from the institution within the late Nineteen Seventies and early Eighties. This, in turn, caused several banks, savings, and loans to fail. The business regained its strength solely when substantial changes were created to bank rules about securities industry interest rates. International trade act because the sale and trade of products, services, and capital across international borders. Such trade of food, clothes, machinery, oil, commodities, and currency offers corporations’ access to customers everywhere the planet and it offers shoppers opportunities to shop for a wider choice of products and services (Trendfollowing.com, 2016).

The financial merchandise includes the provision of Capital, Bond, Credit, Mortgages, Stock. Commodity, Money, Company share, Derivatives, exchange. Main Beliefs of international trade Are Gains from trade, this suggests that international trade is useful to any countries mercantilism merchandise and services to every different, this exchange is somewhat continuously to their mutual profit.

According to financial time’s states that the financial markets have a primary and secondary component to them. As an example to shop for an automobile, a private might put off a loan from a high-street bank. The money market is AN unsuitable name for the financial market because of money currency is not listed within the market because of the securities that do trade there are short run and liquid, however, they are about to being money. It is a market wherever patrons and sellers participate within the trade of assets like equities, bonds, currencies, and by-product (Uwlacuk, 2016).

The money market exists primarily to produce short-run loans and to just accept short-run deposits. It additionally brings economical supply of funds to corporations, the government, and intermediaries that require a short-run infusion of a fund. securities industry are marketplace for monetary assets, and wherever massive denominations are oversubscribed, it is low default risk, They mature in one year or less from their original issue date of most securities industry instruments maturing in on the other hand one hundred twenty days (Doiorg, 2017).

The UK aggregate demand for two sectors, finance, and producing, will account for many of the autumn in United Kingdom of Great Britain and Northern Ireland combination productivity growth. The post-crisis productivity transporter from finance ought to disappear as deleveraging runs its course, however, slower producing productivity growth could relate to a discount within the impact of lower –priced foreign inputs from China associate degrees another rising market is persistently weak investment has conjointly been enjoying an progressively vital role within the weakness of producing and combination productivity. That the typical employee in United Kingdom of Great Britain and Northern Ireland, works constant variety of hours, might turn out doubly the maximum amount as she might have simply thirty years before as seen within the chart (Nwachukwu, 2017).

Effect of Brexit on international trade

Britain is exploit from the EU can want it to renegotiate its trade association not simply with the remaining twenty-seven EU countries, however additionally with the remainder of the globe. Associate rules its gift trade with non-EU partners in nursing agreement negotiated by the EU on behalf of all its members and United Kingdom of Great Britain and Northern Ireland might merely trade with the EU beneath general world trade Organization [WTO] rules, like most alternative non-EU countries. This result, however, would force it to face tariffs and alternative trade barriers in its monetary sector. Brexit could place great the UK firms beneath stress in many ways in which. Land pound are going to be additional volatile against alternative currencies, and overall political economy growth is probably going to weaken. UK firms that swear heavily on trade or labor flows with the EU can struggle. The uncertainty encompassing Brexit could be an issue for the market to contemplate. For those who have not endowed before however are think aborting it or those that consider themselves novices, the potential impact of Brexit will be a frightening prospect. The truth is, nobody is presently able to accurately predict the lay of the land post Brexit, and therefore it is natural that prospective and current investors can second-guess themselves. The role of recommendation in serving to individuals to mitigate uncertainty and guarantee their investments are wide-ranging to soak up any shocks are going to be crucial, however not everybody has access thereto. Mintel’s customers, Saving and finance the United Kingdom, January 2017 Report reveals that twenty seventh of individuals with savings and investments say they conceive to save additional over subsequent twelve months given the uncertainty encompassing Brexit, and twenty fifth say recent market uncertainty encompassing Brexit has place them off finance. This shows that Brexit is already skewing prospective and existing investors back towards risk dislike, and can seemingly encourage individuals to create easy-access money reserves just in case of emergencies. However, Brexit is not all-dangerous news, significantly for skilled investors. finance is all concerning taking calculated possibilities, either with or while not recommendation from people who have specialized info concerning sure investment varieties. Brexit are going to be a gradual method, and investment opportunities can emerge as these progresses. Those that are already active within the markets can have earlier access to those opportunities and thus have the potential to maximize their returns ought to this set up out well (Serialssolutions.com, 2017).

Financial crisis

The global financial and economic meltdown of 2007 -2009 was the worst since the nice Depression Banks throughout the planet unsuccessful or needed in depth government support to survive the world economic system froze, and therefore the entire world economy was thrown into recession. This financial crisis was originated within the shock to the financial market and was transmitted from country to country by the financial market. The collapse of Leman Brothers, a world bank, in September 2008 nearly brought down the world’s economic system. It took Brobdingnag Ian taxpayers to finance to bailouts the trade as debts became unplayable as a results of disposal an over-sized add of cash into the property market that pushed up the value of homes beside the amount of non-public debt. Interest needs to be paid on all the loans that banks gave out, and with the debt rising faster than incomes, some folks became unable to stay up with reimbursement, at this time, they stop repaying their loans, and banks realize themselves in peril of going bankrupt (j.ribaf, 2017).

Ricardo’s theory

Comparative price advantage in step with Ricardo’s theory he explained that countries will specialize in the assembly merchandise of products that it produces expeditiously and obtain the products that it produces less expeditiously from different countries albeit this suggests shopping for goods from different countries it may product effectively itself. For example, if the United Kingdom uses ten units of resources to supply one pen and thirteen resources to supply one automotive, whereas China uses forty units of resources to supply one pen and twenty units of resources to supply one automotive, therefore with associate input of two hundred units of resources, The UK will create twenty pens and zero automotive or zero pen and fifteen automotive whereas China will create five pen and zero car or zero pen and ten cars. therefore relatively, the United Kingdom has fourfold, the advantage over the assembly of pens however just one 5 time the advantage over the assembly of the automotive, in reality, it’d be far more effective and economical for each countries if the United Kingdom focuses on pen production and China specialize in automotive production (j.econmod, 2017).

Capital allocation within domestic economy

The primary allocation of capital is that the federal and native government and firms within the United Kingdom of Great Britain and Northern Ireland, as an example, the national problems long-run notes and bonds to fund the debt and to finance capital comes, like college and jail, constructions. whereas the corporation allocates each bonds and stock in alternative to finance its growth with debt or equity For Instead savers lending/investing directly with borrowers, a money mediator (such as a bank) acts because the middleman, the mediator obtains funds from savers the mediator then makes loans/investments with borrowers This method is termed money intervention. However, is that the primary means that of moving funds from lenders to borrowers (Heidelberg, 2015).

Impact of US-Taliban Treaty on India-Afghanistan Relations

Bilateral relations between both India and Afghanistan is friendly and the public perception in both countries is positive with respect to each other. And this has continued ever since Modi took office in India in 2014. Their relationship pans over the following key sectors:

• Political
• Economical
• Security

This paper focuses on the above topics and specifically the impact of the US-Taliban treaty on Afghanistan and subsequently on Indian investments in Afghanistan and also the risks involved in future investments.

Political Relations:

The new dispensation in India traded cautiously during the Afghan presidential election and also during the initial months of incumbent Afghan President Ashraf Ghani’s presidency. The commonly held perception at that time was that this caution was due to President Ghani’s overtures to China and Pakistan. However, India demonstrated strategic patience and gauged developments; it continued with its developmental assistance and engagement in Afghanistan [1].

Meanwhile, as the Afghan-Pakistan relations worsened, President Ghani focused more effort towards strengthening their relations with India. Since May 2014, several high-level visits have taken place between the Indian and Afghan governments, including those of India’s vice president, prime minister, external affairs minister, national security adviser (NSA), and minister of law and justice; and Afghanistan’s former president, chief executive officer (CEO), NSA, deputy foreign minister, and army chief. Recently, the Indian ambassador to Afghanistan met Gulbuddin Hekmatyar, the leader of the Hezb-e-Islami Afghanistan (HIG), soon after the latter signed a peace deal with the Afghan government. This was the first such interaction between the two sides [1].

Economic Relations:

Since 2001, India has spent US$ 3 billion on development assistance in Afghanistan. The past three years have seen continuity on this front. The previous government in New Delhi initiated numerous infrastructure projects in Afghanistan, including the construction of Route 606, the new Afghan parliament complex and the Salma Dam (officially, the Afghan-India Friendship Dam), the establishment of the Afghan National Agricultural Sciences and Technology University (ANASTU), and investments in small development projects and skill-building-related initiatives[1].

India is also Afghanistan’s fifth largest donor overall, in addition to being by far the largest donor in the region. Moreover, the development assistance India gives to Afghanistan is greater than the amount given to Sri Lanka or Bangladesh – both of who have traditionally received substantial development assistance from India [2].

After taking charge in 2014, the Modi government ensured completion of key pending projects such as that of the parliament and Salma Dam – both of which Prime Minister (PM) Modi jointly inaugurated with President Ghani during his visits to Afghanistan in 2015 and 2016, respectively. Visas for Afghan businesspersons and tourists were further liberalised; 500 scholarships were announced for the children of the martyrs of Afghan security forces; restoration of the Stor Palace was completed. In 2016, India pledged an additional US $1 billion in assistance to Afghanistan [1].

Additionally, India has steadily been working with regional countries on developing landlocked Afghanistan’s connectivity to facilitate trade and movement of goods. In 2016, India, Iran and Afghanistan signed the Trilateral Agreement on Establishment of International Transport and Transit Corridor (the Chabahar Agreement) and by September 2017, India will begin shipping 35,000 containers of wheat to Afghanistan via Iran’s Chabahar port [2].

Security Relations:

Bilateral engagement in security-related issues has seen continuity and some enhancement. Although India is hesitant to supply lethal weapons to Afghanistan, it delivered three unarmed Cheetal helicopters and four refurbished Mi-25 assault helicopters to the Afghan Air Force (AAF) in April 2015 and December 2016, respectively. In 2016 and 2017, New Delhi participated in multiple Russia-led regional multilateral meetings aimed at addressing the security situation in Afghanistan and its neighbourhood, in addition to participating in other ongoing initiatives. Meanwhile, the new administration in the US may be considering different ideas regarding Indian participation in resolving the security situation in Afghanistan. India, too, is evaluating its options [1].

There have been a fair number of attacks on Indians on Afghanistan soil. The September 2011 assassination of former Afghan president Burhanuddin Rabbani was condemned by India, which stated that, ‘Tragically, the forces of terror and hatred have silenced yet another powerful voice of reason and peace in Afghanistan. We unreservedly condemn this act of great brutality,’ and reiterated the steadfast support of the people and government of India in Afghanistan’s ‘quest for peace and efforts to strengthen the roots of democracy’. On 22 May 2014 the Indian consulate in Herat was attacked by 3 militants equipped with AK-47s, RPGs, hand grenades and suicide vests. ‘Our premises have been repeatedly attacked by those who do not support India’s development work in Afghanistan. The attack will not dilute India’s development assistance and its contribution to rehabilitation and reconstruction of Afghanistan,’ India’s ambassador to Kabul Amar Sinha said at the time [3].

US – Taliban Treaty:

Special Representative Khalilzad signed a formal agreement in Doha with Taliban deputy political leader Mullah Abdul Ghani Baradar on February 29, 2020. On the same day in Kabul, Secretary of Defence Mark Esper met with Afghan President Ashraf Ghani to issue a joint U.S.-Afghan declaration reaffirming U.S. support for the Afghan government and reiterating the Afghan government’s longstanding willingness to negotiate with the Taliban without preconditions [4].

As part of the U.S.-Taliban agreement, the United States agreed to draw down its forces from 13,000 to 8,600 within 135 days (with proportionate decreases in allied force levels). CENTCOM Commander General Kenneth McKenzie confirmed on June 18 that U.S. forces have been reduced to that level nearly a month ahead of schedule. The U.S. further committed to withdraw all of its forces within 14 months (April 2021). Other U.S. commitments included working to facilitate a prisoner exchange between the Taliban and the Afghan government (more below) and removing U.S. sanctions on Taliban members by August 27, 2020. The sanctions removal is contingent upon the start of intra-Afghan negotiations. In exchange, the Taliban committed to not allow its members or other groups, including Al Qaeda, to use Afghan soil to threaten the U.S. or its allies, including by preventing recruiting, training, and fundraising [4].

Effect of COVID-19 Pandemic on the Treaty:

Overshadowing all of the developments above is the continued spread of COVID-19 in Afghanistan, which reported over 30,000 cases as of June 25, 2020, though that figure likely understates the scale of the virus in Afghanistan due to extremely limited testing [5]. COVID-19 has impacted a number of dynamics related to the U.S.-Taliban agreement and potential intra-Afghan talks. Most notably, the United States announced on March 18 that it was pausing the movement of personnel into and out of the region due to concerns about COVID-19 [6]. The withdrawal evidently resumed after that announcement, and NBC News reported in April 2020 that President Trump had advocated accelerating the withdrawal of all U.S. troops out of Afghanistan because of the pandemic [7]. COVID-19 also presents logistical hurdles to convening large groups of negotiating teams.

The further spread of COVID-19 in Afghanistan could cause additional disruptions to the nascent peace process, but might also present opportunities for compromise and intra-Afghan cooperation. For example, Afghan government representatives have expressed support for Taliban efforts to combat the virus in areas they control [8]. At the same time, some observers dismiss the Taliban’s actions as a propagandistic attempt to undermine the legitimacy of the Afghan government, and charge that the Taliban’s escalation of violence since February 2020 is the main factor impeding the country’s response to the pandemic [9]. Afghanistan may be at particularly high risk of a widespread outbreak, due in part to its weak public health infrastructure and its porous border with Iran, a regional epicentre of the pandemic where up to three million Afghan refugees live: nearly 300,000 Afghans returned from Iran between January 1, 2020 and late May, 2020 [10].

Risk Assessment:

Terrorism:

The first set of risks has to do with the possibility of international and regional terrorism. One of the four guiding principles mentioned in the joint declaration between the United States and the Afghan government includes “guarantees to prevent the use of Afghan soil by any international terrorist groups or individuals against the security of the United States and its allies” [11]. However well-intentioned these words might be, there is little clarity on how these guarantees will be upheld. After all, the factions to be reconciled will also include those elements who have fronted the ISI’s war against India from within Afghanistan. The evidence supporting this claim is overwhelming [12].

Pakistani Influence:

The second related set of risks has to do with the ISI’s increasing influence in Afghanistan. The nexus between the Taliban (especially the Haqqani group) and the ISI underscores Pakistan’s increasing influence within the country. The Taliban leadership may not always see eye to eye with the Pakistani state and the ISI, but the ISI’s influence over the Taliban is undeniable [13]. Given the potential of Taliban representation in Kabul in the near future, this state of affairs is naturally far from comfortable for India [14].

Divided Afghan Government:

The third set of risks has to do with the perpetually divided Afghan government. While a semi-united government led by Ghani and Abdullah might have offered India some options for mitigating the risks mentioned above, such an arrangement seemed unlikely with both sides engaged in a months-long bitter rivalry while violence escalated. The recent political agreement between Ghani and Abdullah, while welcome, does not guarantee political stability [15]. The two leaders, on opposing sides until very recently, will now have to find ways to work together. India will need to identify its own strategic actions and not rely on an Afghan-led approach on reconciliation, which carries the risk of disintegrating because of the sharply competing politics and the outsized battle of egos among Afghanistan’s leaders.

Conclusion:

There are two choices before the Indian government. First, it can “wait and watch” to see if Ghani and Abdullah are able to mend fences and provide a degree of political stability. Second, given the “enormous instability” that looms large, in order to remain “engaged in Afghanistan in the future,” India may have to build “new equities.” This will require India to be “actively involved” and, equally important, “to be seen to be actively involved” in a wider set of international and national conversations [16].

References:

1. India-Afghanistan Relations: Innovating Continuity, by Rajeshwari Krishnamurthy, http://www.ipcs.org/comm_select.php?articleNo=530
2. Indian development cooperation with Afghanistan and the ‘Afghan-India Friendship Dam’, by Dr Rani D Mullen, Kashyap Arora, https://cprindia.org/sites/default/files/policy-briefs/Indian%20Development%20Cooperation%20with%20Afghanistan%20and%20the%20%e2%80%98Afghan-India%20Friendship%20Dam%e2%80%99_0.pdf
3. https://en.wikipedia.org/wiki/Afghanistan%E2%80%93India_relations
4. Afghanistan: Background and U.S. Policy, by Clayton Thomas, https://fas.org/sgp/crs/row/R45122.pdf
5. 9 Belquis Ahmadi and Palwasha Kakar, “Coronavirus in Afghanistan: An Opportunity to Build Trust with the Taliban?” United States Institute of Peace, April 16, 2020. See also, Jaffer Shah et al., “COVID-19: the current situation in Afghanistan,” The Lancet, April 2, 2020.
6. Thomas Gibbons-Neff and Julian Barnes, “Coronavirus Disrupts Troop Withdrawal in Afghanistan,” New York Times, March 18, 2020.
7. Carol E. Lee and Courtney Kube, “Trump tells advisors U.S. should pull troops as Afghanistan COVID-19 outbreak looms,” NBC News, April 27, 2020.
8. Ruchi Kumar, “Taliban launches campaign to help Afghanistan fight coronavirus,” Al Jazeera, April 6, 2020.
9. For the Taliban, the Pandemic is a Ladder,Foreign Policy, May 6, 2020, and “The Taliban are joining Afghanistan’s fight against covid-19,” Economist, May 9, 2020.
10. International Organization on Migration, Return of Undocumented Afghans Weekly Situation Report, May 24-30, 2020.
11. Joint Declaration between the Islamic Republic of Afghanistan and the United States of America for Bringing Peace to Afghanistan, U.S. Department of State, February 29, 2020, https://www.state.gov/wp-content/uploads/2020/02/02.29.20-US-Afghanistan-Joint-Declaration.pdf
12. Why Pakistan Supports Terrorist Groups, and Why the US Finds It So Hard to Induce Change, Brookings, January 5, 2018, https://www.brookings.edu/blog/order-from-chaos/2018/01/05/why-pakistan-supports-terrorist-groups-and-why-the-us-finds-it-so-hard-to-induce-change/
13. Abdul Salam Zaeef, My Life with the Taliban.
14. Dealing With the Taliban: India’s Strategy in Afghanistan After U.S. Withdrawal, by Rudra Chaudhuri and Shreyas Shende, https://carnegieindia.org/2020/06/02/dealing-with-taliban-india-s-strategy-in-afghanistan-after-u.s.-withdrawal-pub-81951
15. Mujib Mashal, “Afghan Rivals Sign Power-Sharing Deal as Political Crisis Subsides,” New York Times, May 17, 2020, https://www.nytimes.com/2020/05/17/world/asia/afghanistan-ghani-abdullah.html?smid=tw-share.
16. Chaudhuri telephone interview with Rakesh Sood, April 21, 2020.