What do you understand by MFN status? Discuss trade barriers in this context.

  • January 8, 2021
  • Posted by: OptimizeIAS Team
  • Category: DPS Topics
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Introduction

(Explain what most favoured Nation is

Body

(Explain the most favoured Nation status with advantages and disadvantages)

Treatment is synonymous with non-discriminatory trade policy because it ensures equal trading among all WTO members rather an exclusive trading privileges

Advantages

  • this status is critically important for all smaller and developing countries for several reasons
  • access to the market
  • it lowers the cost of their exports their products become more competitive
  • businesses have more opportunities for growth it in turn increases their exports and country’s economic growth cut towns
  • The red tape produces all the effects of trade protectionism

Disadvantages

  • they cannot protect the country’s industry from cheaper goods produced by foreign countries sometimes subsidize
  • their domestic products the country reduces the subsidiary prices but now that’s a Monopoly no other company remain
  • industry to keep crisis competitive which is known as jumping
  • Case study many farmers move to cities to find jobs when food prices escalated in some of the Western European countries as most favoured Nation started exporting cheap agricultural goods Give the context of trade barriers due to Corona pandemic protectionism and slow down

Give the various types of barriers in the context of pandemic, deglobalisation, trade war , protectionism

1. Tariff barriers

Explain and Give examples

2. Non-tariff barriers like import quota ,regulations

(give example of European countries regulation against Indian agricultural products -pesticide residue) Licence

Voluntary export restraint

It is  voluntary that is created by exporting country rather than important on for example brazil could place a VER on exportation of sugar to Canada based on a request by Canada

Local content requirement restriction on import of computers needs a 25% of pieces used to make a computer are made domestically

Conclusion

(Explain the need of India to standardise it’s products to overcome the trade barriers and link with AatamanirbharBaharat)

IR What do you understand by MFN status? Discuss trade barriers in this context.