Debate on Trade Practices Developing countries are, therefore, asking the developed country governments, “We have reduced trade barriers as per WTO rules. But you have ignored the rules of WTO and have continued to pay your farmers vast sums of money. You have asked our governments to stop supporting our farmers, but you are doing so yourselves. Is this free and fair trade?
Is this free and fair trade? Is this free and fair trade? Is this free and fair trade? Is this free and fair trade?” You have seen in Chapter , that the agriculture sector provides the bulk of employment and a significant portion of the GDP in India.
Compare this to a developed country such as the US with the share of agriculture in GDP at % and its share in total employment a tiny . %! And yet this very small percentage of people who are engaged in agriculture in the US receive massive sums of money from the US government for production and for exports to other countries. Due to this massive money that they receive, US farmers can sell the farm products at abnormally low prices.
The surplus farm products are sold in other country markets at low prices, adversely affecting farmers in these countries. A typical cotton farm in USA consists of thousands of acres owned by a huge corporation that will sell cotton abroad at lowered prices. In the last twenty years, globalisation of the Indian economy has come a long way. What has been its effect on the lives of people?
Let us look at some of the evidence. Globalisation and greater competition among producers - both local and foreign producers - has been of advantage to consumers, particularly the well-off sections in the urban areas. There is greater choice before these consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier.
Among producers and workers, the impact of globalisation has not been uniform. Firstly, MNCs have increased their investments in India over the past years, which means investing in India has been beneficial for them. MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas. These products have a large number of well-off buyers.
In these industries and services, new jobs have been created. Also, local companies supplying raw materials, etc. to these industries have prospered. .
Fill in the blanks. WTO was started at the initiative of . The aim of the WTO is to . WTO establishes rules regarding for all countries, and sees that In practice, trade between countries is not .
Developing countries like India have , whereas developed countries, in many cases, have continued to provide protection to their producers. . What do you think can be done so that trade between countries is more fair? .
In the above example, we saw that the US government gives massive sums of money to farmers for production. At times, governments also give support to promote production of certain types of goods, such as those which are environmentally friendly. Discuss whether these are fair or not.