International Trade Newly Industrialized Countries

Question: Discuss about theInternational Trade for Newly Industrialized Countries. Answer: AOA in India Many economies are affected in a similar manner by global agricultural policies. Distortions and changes in global trading policies might make developing countries more vulnerable, but the implications of agricultural trade liberalism are also well determined in some countries. Global policies and trade liberalism aroused vulnerability in countries may be inherent to their economy like employment and foreign exchange earnings, strong dependence on agriculture for income, relatively high degree of sector openness and heavy dependence on food import and food aid. The agreement on agriculture (AOA) impact on a developing country like India can we understood by the closely looking at the current scenario analysis of the country. The Agreement on Agriculture was formed at Marrakesh, Morocco on April 1994. This was in an attempt to reform the world trade which was highly distorted at the time. Till 1991 India was isolated from international markets largely and intentionally. The country has a majority of small and marginalised farmers with smaller holdings of less than 2 hectares and not assured irrigation. Thus there is a need for support extension to this marginalised sector. Therefore the need of AOA was felt by the developing country and thus followed its implementation. Over the years the factors like market openness and exports of products with factor like Indias continuation with its domestic policy for the improvement of infrastructure and to increase agricultural production via provisions of inputs at subsidised prices after AOA implementation paints a clear picture of the impact laid. Under the provision of market access and the lifting of QRs on imports of certain agricultural products, it is argued with the opening up of world markets prospects on exports have increased (Sharma, 2008). This increase has resulted in the increase of prices of domestic agricultural commodities, resulting in the increase of farmers benefits further increasing investments. The international prices of the agricultural commodities will rise after the decrease in production and export subsidies, making India more competitive in world market (ZajƦczkowski, et al., 2015). The above mentioned aim of the Indian Planners faced one of the biggest challenges of food price inflation faced by developing countries. The food price inflation for India in August 2016 was reported to be 5.91%, food inflation in India averaged 8.46%. This makes it very difficult for India to export processed food from agriculture (McMahon, 2011). Thus if there are any reduces in the food price due to increase in cheap imports the condition of farmers would deteriorate further. The policy makers had to make provisions to adhere to such road blocks for a successful course of AOA in India. In the most recent reports India was placed 2nd in the world for its agricultural produce with $ 367 billion of produce in 2014. It has also been highlighted that out of the 6 global leaders in agricultural produce 5 are developing countries. Thus the backbone of world agriculture is the family farmers who make 70-80% of the 570 million farms in the world (B2B, 2016). References B2B, 2016. India: An agricultural powerhouse of the world. [Online] Available at:https://www.business-standard.com/article/b2b-connect/india-an-agricultural-powerhouse-of-the-world-116051800253_1.html [Accessed 25 September 2016]. McMahon, J. A., 2011. The Negotiations for a New Agreement on Agriculture. s.l.:Martinus Nijhoff Publishers. Sharma, D. A., 2008. Impact on Indian Agriculture. Pratiyogita Darpan, March, 2(21), p. 192. ZajƦczkowski, J., Schottli, J. Thapa, M., 2015. India in the Contemporary World: Polity, Economy and International Relations. s.l.:Routledge.