Latest news with #GeneralAgreementonTariffsandTrade
Daily Maverick
5 days ago
- Business
- Daily Maverick
Twin disruptors at work — tariffs, AI and the future of employment
The global economy stands at a precipice, shaped by two interconnected forces: the resurgence of tariff-driven protectionism and the relentless advance of artificial intelligence (AI). Together, these 'twin disruptors' are changing the world of work, reshaping trade dynamics, recalibrating labour markets and challenging the social contract that underpins modern societies. This presents a profound double disruption, compelling workers, employers, legislators and policymakers to confront urgent legal questions concerning rights, protections and regulatory obligations. The new tariff terrain: a trade law perspective Tariffs have re-emerged as an instrument of statecraft. Yet, their deployment is far from unfettered. It is governed by a robust international legal architecture, primarily the General Agreement on Tariffs and Trade under the World Trade Organization (WTO). The increasing imposition of tariffs, particularly those justified under national security exemptions, is testing the limits of multilateral trade law. Disputes arising from such measures are before the WTO's dispute settlement mechanism, underscoring the critical need for legal predictability in global commerce. Tariff policy must adhere to the principles of administrative law, demanding transparency, thorough consultation and the minimisation of arbitrary or disproportionate impacts on affected sectors. Crucially, workers displaced by tariff-induced shifts in global supply chains may have legitimate claims under existing labour statutes, advocating for 'just transition' support or retraining guarantees to mitigate job losses. AI and labour: legal gaps and governance challenges The rapid integration of AI into the workplace introduces unprecedented complexities for labour law. Traditional legal protections – encompassing the right to fair labour practices, non-discrimination and safe working conditions – are severely strained by algorithmic decision-making 's pervasive influence. For instance, automated hiring or performance management tools carry the inherent risk of inadvertently violating anti-discrimination laws, data protection legislation or even constitutional rights to dignity and equality. In South Africa, these vital protections are enshrined in the Bill of Rights and further elaborated through key statutes like the Labour Relations Act, Employment Equity Act and the Protection of Personal Information Act. Globally, the International Labour Organisation (ILO) has proactively begun to address these emerging challenges, advocating for a 'human-centred' approach to the future of work and urging the adoption of new international standards that ensure algorithmic transparency and accountability in the workplace. South Africa's lacklustre economic growth: a deep dive into persistent challenges While South Africa holds significant potential as an emerging market with diversified industries and abundant natural resources, its economic growth has been persistently lacklustre, significantly hindering efforts to address challenges like high unemployment, poverty and inequality. For more than a decade the country's GDP growth has averaged a mere 0.7% annually, a rate lower than its population growth, leading to declining real per capita income. This sustained underperformance is not merely a cyclical downturn, but a symptom of deep-seated structural issues and governance weaknesses. One of the most critical impediments to South Africa's economic vitality is the energy crisis, primarily driven by the ailing state-owned power utility, Eskom. The result is load shedding – scheduled and unscheduled power outages that cripple businesses, disrupt daily life and deter investment. These power cuts have cost the economy billions of rands annually, forced small businesses to collapse and significantly reduced productivity across all sectors, from mining to manufacturing and retail. The impact extends to agriculture, where food processing delays lead to substantial losses, and even to the digital economy, with projected losses in the billions. While there have been recent improvements in electricity supply, the long-term shadow of energy insecurity continues to loom large over the economy. Beyond the energy woes, other structural rigidities contribute to the anaemic growth. The country's transport and logistics infrastructure, particularly rail and port operations, is in disrepair. This directly hinders export capacity and increases operational costs for businesses. Furthermore, a weak business environment, characterised by administrative burdens, stifles entrepreneurship and job creation, especially for small and medium-sized enterprises (SMEs) which are vital for employment. Despite efforts to improve the ease of doing business, reform has been slow. The public sector wage bill significantly strains national finances, diverting funds that could otherwise be invested in critical infrastructure or economic stimulus programmes. The cumulative effect of these challenges is a staggering unemployment rate, consistently among the highest in the world. In the first quarter of 2025, the overall unemployment rate climbed to 32.9%, with youth unemployment reaching an alarming 62.4%. This highlights a fundamental disconnect between the available workforce and the economy's capacity to create jobs, often exacerbated by a mismatch between skills and industry demands. The labour costs and insufficient demand also influence businesses' reluctance to expand their workforce. Addressing South Africa's lacklustre economic growth requires a comprehensive and sustained effort. This includes accelerating structural reforms in the energy and logistics sectors, enhancing the business environment to foster private sector investment and SME growth, improving effective and efficient governance, and implementing labour market reforms promoting job creation and addressing skill mismatches. Without such action, South Africa risks remaining trapped in a cycle of low growth, high unemployment and persistent inequality. The dual pressures of shifting tariffs and accelerating AI adoption intersect with entrenched structural inequalities in South Africa. South Africa bears a constitutional obligation to progressively realise socioeconomic rights, which, it is argued, impose positive duties on the state to proactively create enabling conditions for employment and skills development, particularly as traditional job pathways face obsolescence. If unchecked, the unmitigated displacement of mid-skilled jobs due to automation and evolving trade flows could seriously violate the state's duty to achieve these fundamental rights progressively. To comply with these constitutional mandates, legal strategies such as those aimed at developing sectoral master plans, inclusive procurement policies and robust public-private retraining partnerships are imperative. Furthermore, South Africa's international obligations under instruments such as the African Charter on Human and Peoples' Rights and the UN's Sustainable Development Goals reinforce the critical need for labour market policies that actively promote equity, sustainability and decent work for all. AI and tariffs are intrinsically transnational phenomena, demanding regulatory responses that transcend national borders. There is an urgent and pressing need for new global frameworks to address emerging digital labour rights, facilitate cross-border data governance, and ensure corporate accountability across complex global supply chains. Legal fragmentation will exacerbate inequalities between jurisdictions. Multinational firms may exploit regulatory arbitrage without coordinated frameworks to circumvent vital labour protections. Multilateral cooperation, channelled through institutions such as the WTO, ILO, UN and regional bodies like the African Union, is essential to ensure that legal protections keep pace with and actively guide technological and economic transformation towards equitable outcomes. Towards a legally grounded future of work The future of work in a world shaped by tariffs and AI will not be passively determined by technology or market forces alone. Crucially, it will be shaped by the legal frameworks we construct, our institutional choices and the political will we summon. If legal systems remain passive, they risk complicating inequality and eroding fundamental rights. Conversely, if boldly and strategically mobilised, law can be a powerful tool to steer disruption towards shared prosperity and a more just future. The imperative is clear: we must urgently update labour, trade and constitutional laws for a world where borders and algorithms increasingly define the boundaries of opportunity and risk. Legal certainty, fundamental fairness and human dignity must serve as the unshakeable foundations upon which we construct the new world of work. DM
Hindustan Times
6 days ago
- Business
- Hindustan Times
India, US tariff dispute is a battle of principles
India-US trade relations have witnessed a serious shake-up over the last few weeks, with India maintaining a principled position of sovereignty. This comes in the context of the turmoil initiated by the heavy-handedness of the Donald Trump-led US administration that risks undermining the global trade order established over the last three decades in the form of the World Trade Organization (WTO). The advantage of a multilateral platform like WTO is that it provides a framework that all countries can leverage to protect their interests. The recent strategy by the US government to undermine the global framework while striking multiple bilateral trade treaties is a concerted effort to squeeze their trading partners to the maximum possible extent. In particular, the US President has been trying to pressure India by repeatedly singling it out as 'one of the highest taxed or tariffed countries in the world', even as both countries work on a bilateral trade deal. For instance, Trump recently suggested that India has 'offered' to cut 100% tariff on all US imports, and that he asked Apple Inc. to not shift its manufacturing base to India. This adds to the recent geopolitical tension India had with its neighbour where the US President claimed to have negotiated a de-escalation by leveraging the trade deal. While India has diplomatically refuted much of these tall claims, it has also initiated a firm pushback by leveraging the WTO platform. India and the US have had a history of disagreements over the WTO platform. Back in 2018, the previous Trump administration imposed additional duties on steel and aluminium imports from India. India retaliated with customs duties on 28 products from the US in 2019. The issue was eventually resolved under the Biden administration where both countries settled seven WTO disputes via mutual cooperation. Once the US administration chose to reapply the tariffs (although this time, it was part of its global tariff war), India challenged the validity of the same at WTO. India argued that the provisions do not follow the WTO norms under the General Agreement on Tariffs and Trade (GATT), 1994, and Agreement of Safeguards; one critical condition of which is that the country must give advance notice to WTO before it imposes any such tariffs. The US response was that the tariffs were not under safeguard provisions but were under national security actions, which do not come under the purview of WTO. In the course of these discussions, the US government tried to arm-twist India by challenging the latter's Production Linked Incentive (PLI) scheme for specialty steel. The US argued that such subsidies are inappropriate given the global over-capacity in the metal. India duly responded that the PLI schemes are valid under WTO norms and are designed to help develop self-reliance in speciality steel given the country is a net importer for such products. India also argued that the subsidy it gives is modest compared to the Chinese subsidy that amounts to over $50 billion! India has now communicated to the WTO its intention to impose retaliatory measures via the 'suspension of concessions and other obligations' in response to the US tariffs. India rejects the US argument of national security and insists that the tariffs need to be scrutinised via consultations as prescribed under the Agreement of Safeguards. Effectively, the Indian notification, while following WTO norms, argues that the same norms must be applicable for the US imposition as well. This initiative was a well calibrated response just before India's commerce and industry minister commenced his Washington trip to discuss the trade agreement. India is communicating to the global community that while it negotiates a trade agreement with the US, it does not intend to do so by undermining the WTO framework like the latter. India is signalling that the US-India trade agreement will be under mutual cooperation and not unilateral pressure. The recently concluded UK-India Free Trade Agreement (FTA), between the sixth-largest and the fourth-largest economies of the world, is an example where India highlighted the importance of mutual cooperation within a globally-accepted framework. Such a nuanced position from India, which is poised to emerge as the third-largest economy in the world by 2028, reflects a maturity and sense of responsibility that comes with such a status. Even as the outcome of these negotiations are yet to be realised, the principled position taken by India presently should be lauded for its intent. Amitayu Sengupta is senior research consultant, Chintan Research Foundation. The views expressed are personal.
Qatar Tribune
25-05-2025
- Business
- Qatar Tribune
Trade challenges will not undermine global economic integration
Since the end of World War II, advanced economies have pursued trade liberalization, seeing open markets and lower tariffs as essential pillars of peace, prosperity, and global economic integration. The General Agreement on Tariffs and Trade (GATT), and later the World Trade Organization (WTO), institutionalized this agenda, helping to reduce global average tariffs from double digits to low single digits. This movement gained further momentum in the 1980s and 1990s, with the rise of 'free market' supply-side economics thinking, the fall of the Iron Curtain, and a new wave of globalization. The world saw the rapid expansion of global supply chains, the integration of emerging markets, and the steady erosion of trade barriers as positive forces for growth, efficiency, and price stability. During this time, external trade increase its significance from 14.4% of global GDP to 25.2%. This evolution began to fracture with the Global Financial Crisis in 2008 and the election of Donald Trump in 2016, whose 'America First' doctrine brought protectionism back into the mainstream of US economic policy. Yet, while his first term featured targeted tariffs and trade skirmishes – particularly with China – the latest iteration of Trump's trade policy marks a far more radical departure. On what has come to be called 'Liberation Day' on April 2nd, Trump unveiled a sweeping package of tariffs that shocked global markets: headline US effective tariff rates (ETR) surged from 2.9% to 27.99%, before several rounds of exemptions moderated it to 14%. This still represents a manifold increase, placing US tariffs close to 1930s levels. For some analysts and investors, the magnitude and abrasiveness of the US tariff hike meant not only a pause on trade liberalization, but also potentially the first systematic tentative to reverse it. In our view, however, despite the extraordinary challenges posed by much higher US tariff rates, there are reasons to be optimistic and believe that global economic integration will be resilient towards existing deglobalization threats. Three main factors support our position. First, the objectives and mandate of the new US tariff packages remain unclear, raising the likelihood of resistance from key market and institutional stakeholders. While the headline rhetoric has emphasized reindustrialization and economic nationalism, the underlying targets of the new tariffs remain ambiguous. Is the goal to reduce the trade deficit, revive domestic manufacturing, isolate strategic rivals, or simply boost federal revenues? These aims are not always mutually reinforcing. For instance, broad-based tariffs that raise input costs can harm US manufacturers and consumers, undercutting the reshoring narrative used to justify them. Meanwhile, targeting allies risks diplomatic backlash and complicates coordination on issues such as isolating strategic competitors or access to critical raw materials. Markets reacted sharply to the 'Liberation Day' tariff announcement, with US Treasury yields rising on fears of de-anchored inflation expectations and lower policy credibility. This not only signals investor scepticism but also creates real economic constraints, as higher borrowing costs threaten growth and complicate fiscal policy. Symmetrically, markets rallied sharply when the new US administration demonstrated more flexibility and pragmatism in conceding exemptions. In addition, the legal foundation for such sweeping tariffs may face scrutiny, as trade policy traditionally falls under congressional authority, and broad applications of national security provisions could invite judicial review. Combined with likely resistance from courts, Congress, and corporate America, these pressures increase the odds of more policy pivots toward an even more pragmatic approach, including further exemptions, rollbacks, and rapid bilateral 'deals' to limit the fallout. Second, tariffs are relatively blunt instruments in a world defined by complex supply chains, digital trade, and fluid capital mobility. Unlike in the mid-20th century, when trade flows were largely bilateral and goods were produced end-to-end in one country, today's production networks are deeply fragmented and global. A single product might cross multiple borders during assembly, diluting the intended economic effect of country-specific tariffs. Multinational firms are adept at adapting quickly, reconfiguring sourcing, rerouting shipments, or absorbing costs through internal pricing strategies. The result is that tariffs often fail to meaningfully shift production back to the imposing country, while still potentially raising costs for domestic consumers and firms. Moreover, management tools such as transfer pricing, tax structuring, and jurisdictional arbitrage make it easier for global companies to minimize the financial impact of tariffs. In practice, firms find workarounds faster than policymakers can enforce rules. The more interconnected the global economy becomes, the harder it is to enforce protectionism without inflicting broader collateral damage. Third, the US may be raising barriers, but the rest of the world is largely moving in the opposite direction. From the European Union (EU) to Asia and Latin America, most major economies continue to view open trade as essential to their growth models – and are actively pursuing deeper integration. Recent examples include the Regional Comprehensive Economic Partnership (RCEP) in Asia, the EU's expanding trade agreements with key South American (Mercosur) and Indo-Pacific partners, and the African Continental Free Trade Area. Non-US activity spans 73% of global GDP and 87% of trade flows, reinforcing a multipolar trading system that can remain dynamic even without US leadership. The US retreat may even accelerate cooperation among others, as countries seek to hedge against protectionist shocks and preserve market access. As a result, global firms may increasingly orient towards alternative hubs. All in all, while the scale of the recent US tariff measures is unprecedented, even after several rounds of exemptions, the forces underpinning global economic integration remain robust. Market pressures, legal constraints, corporate adaptability, and the continued commitment of other major economies to openness all suggest that globalization is not being reversed, but rather geographically reshaped and re-oriented. — By QNB Economics
Indian Express
18-05-2025
- Politics
- Indian Express
Daily subject-wise quiz : International Relations MCQs on port city of Eilat, 1994 genocide and more (Week 110)
UPSC Essentials brings to you its initiative of subject-wise quizzes. These quizzes are designed to help you revise some of the most important topics from the static part of the syllabus. Attempt today's subject quiz on International Relations to check your progress. 🚨 Click Here to read the UPSC Essentials magazine for May 2025. Share your views and suggestions in the comment box or at With reference to the World Trade Organisation (WTO), consider the following statements: 1. It is the successor of the erstwhile General Agreement on Tariffs and Trade (GATT). 2. It is the world's largest intergovernmental trading body. 3. All the United Nations members are member countries of the WTO. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None Explanation — According to Article 1 of the 1994 General Agreement on Tariffs and Trade (GATT), every member country of the World Trade Organisation (WTO) is required to grant Most Favoured Nation (MFN) status to all other members. — According to WTO accords, nations having MFN status cannot discriminate against their trading partners or provide one country 'a special favour' such as a lower customs charge on one of their products without also giving the same to other WTO members. WTO — The WTO is the successor of the erstwhile GATT, and is the world's largest intergovernmental trading body. Hence, statements 1 and 2 are correct. — It has 166 member nations, and represents 98% of the world's trade. Its stated goal is to open trade for the benefit of all. The United Nations currently has 193 member states. Hence, statement 3 is not correct. Therefore, option (b) is the correct answer. Consider the following statements: 1. They were among the hundreds of thousands of Hutus who fled this country after the state-sponsored 1994 genocide. 2. Now, hundreds of refugees who were living in eastern Congo since 1994 have been repatriated to their country. The country mentioned in the above statements refers to: (a) South Sudan (b) Somalia (c) Tanzania (d) Rwanda Explanation — Hundreds of Rwandan refugees who had been living in eastern Congo since the 1994 genocide were repatriated on Saturday, according to the UN refugee agency, after Rwandan-backed rebels took control of crucial areas of the region. — The majority of the migrants were women and children, with 360 crossing the border in buses provided by Rwandan authorities and escorted by the UN High Commissioner for migrants and the relief group Save the Children, according to local officials. The UNHCR stated that the goal is to repatriate 2,000 persons. — They were among hundreds of thousands of Hutus who fled Rwanda following the 1994 state-sponsored genocide, which killed up to a million minority Tutsis and moderate Hutus. When the Tutsi-led Rwandan army invaded Congo in 1996, the majority had already returned. However, Rwandan officials claimed that thousands of Hutu militiamen and ex-soldiers had lingered and joined Congo's army to destabilise Rwanda. Therefore, option (d) is the correct answer. Which of the following countries has formally adopted a resolution honouring the Indian Constitution on the occasion of its 75th anniversary? (a) Russia (b) United Kingdom (c) United States (d) Nepal Explanation — The New York State Senate has formally adopted a resolution commemorating the 75th anniversary of the Indian Constitution, honouring it as a guiding framework for India's continued evolution as a nation and celebrating the country's democratic principles. — The landmark resolution was sponsored by New York State Senator Jeremy Cooney, the only member of Indian heritage now serving in the New York State Senate, and was adopted during a ceremony. — Binaya Pradhan, Consul General of India in New York, attended the event, as did important members of New York's Indian-American community. Therefore, option (c) is the correct answer. Which of the following Indian states are bordered by Bangladesh? 1. Assam 2. Arunachal Pradesh 3. Meghalaya 4. Tripura Select the correct answer using the codes given below: (a) 1, 2 and 3 (b) 2, 3 and 4 (c) 1, 2 and 4 (d) 1, 3 and 4 Explanation — India has decided to impose restrictions on Bangladeshi products exported to North-East India and beyond. This appeared to be a reciprocal measure, as Dhaka had imposed non-tariff impediments on Indian exports to Bangladesh. — The Directorate General of Foreign Trade, part of the Ministry of Commerce, issued a notification. It stated that the limitations will not apply to the import of seafood, LPG, edible oil, and crushed stone into India from Bangladesh. The limitations will also not apply to Bangladesh exports to Nepal/Bhutan that pass through India, it stated. — Bangladesh borders five Indian states: West Bengal, Assam, Meghalaya, Tripura, and Mizoram. Therefore, option (d) is the correct answer. The port city of Eilat was recently in the news. It is part of: (a) Egypt (b) Yemen (c) Israel (d) Iran Explanation — Yemen's Houthi rebels are suspected of attacking a ship in the Gulf of Aden, while Iraqi militants affiliated with the rebels claimed responsibility for an attack on the southern Israeli port city of Eilat, according to police. — The attacks follow the departure of the USS Dwight D Eisenhower from an eight-month deployment in which the aircraft carrier led the American response to the Houthi assaults. These strikes have significantly decreased shipping through the route critical to Asian, Middle Eastern, and European markets, in a campaign that the Houthis claim will continue as long as the Israel-Hamas conflict in the Gaza Strip rages. — Meanwhile, amid a developing economic disagreement between the rebels and the country's exiled leadership, the Houthis were accused of seizing commercial aircraft transporting pilgrims returning from the Hajj. Therefore, option (c) is the correct answer. Daily Subject-wise quiz — History, Culture, and Social Issues (Week 109 and 110) Daily subject-wise quiz — Polity and Governance (Week 110) Daily subject-wise quiz — Science and Technology (Week 110) Daily subject-wise quiz — Economy (Week 110) Daily subject-wise quiz — Environment and Geography (Week 110) Daily subject-wise quiz – International Relations (Week 109) Subscribe to our UPSC newsletter and stay updated with the news cues from the past week. Stay updated with the latest UPSC articles by joining our Telegram channel – IndianExpress UPSC Hub, and follow us on Instagram and X.
Mint
15-05-2025
- Business
- Mint
Will the WTO get crushed under an avalanche of bilateral trade deals?
It's the season for trade negotiations and deals, going by the pace and number of deals struck over the last fortnight alone. After the India-UK trade deal that was announced on 6 May, we had the US-UK pact and then an interim one between China and America. With a little luck, we are likely to see India's deals under discussion with the US and EU reach fruition as well. To be sure, the finer details of these accords are not yet known. But to the extent that they could cushion the impact of the trade war unleashed by US President Donald Trump, they count as good news. The flip side, however, is that they could sound a death-knell for the rules-based system of multilateral trade we have known since the World Trade Organization (WTO) was set up in 1995 to replace the General Agreement on Tariffs and Trade (GATT). Also Read: Global flux: Can a spate of deals transcend a clash of convictions? As the youngest of the global institutions formed after World War II, the WTO stands apart from its siblings, the World Bank and International Monetary Fund. Unlike the Bank and Fund, whose voting rights are skewed in favour of advanced countries, with calls for reform having fallen on deaf ears, the WTO embodies a key principle of democracy: All members, rich and poor countries alike, are equal voters. The WTO has had its share of critics and bashers. If its consensual approach to trade rules tested the patience of some, its dispute resolution mechanism evoked the ire of some others. The latter has effectively been in abeyance for years now, with the US blocking appointments to its appellate body with final adjudicatory authority. Also Read: The time is right for a reset of India's trade ties with China Still, at least on paper, any country can seek redressal if bullied by the trade-distortive tactics of another. Under WTO rules, for example, India has the right to levy retaliatory duties on US products for its unilateral tariffs on steel and aluminium. Also, unlike the GATT, the WTO deals not only with the exchange of goods across borders, but also services. In a world where research and technology play a vital role, the WTO's mandate covers intellectual property rights as well. Three decades ago, the wider world got access to cheaper drugs thanks to a pharma agreement. The Global South also has a stake in two basic WTO principles: 'Most Favoured Nation,' under which a country cannot discriminate between trade partners (except via a free trade agreement), and 'Special and Differential Treatment,' which gives developing countries special rights and lets other members grant them favourable terms. So, even as we celebrate signs that the world will escape the worst ravages of a tariff war, with the high seas looking less choppy for shipments, emerging economies must remember that our best interests lie squarely in multilateral cooperation. A rush for bilateral deals that are usually loaded in favour of richer partners—without clarity on how disputes can be resolved in the absence of an impartial technical body—is unlikely to serve us well over the long haul. Also Read: India could learn much from the complaints of its trade partners In spite of this year's turmoil, we should pursue our larger goal of reforming the international trading system through lower barriers and revised rules. The Doha Round of WTO talks, launched in 2001, has led efforts in this direction. Sure, the US has halted its contributions to the WTO. But that's no reason for the rest of the world, especially developing countries, to give up on it. Nobody needs to play second-fiddle to the advanced world. As recent events show, even the US can be forced to retreat from the trade war-front.
