[raj_chopada2001]

Hi,
Estimating the Impact of WTO and
Domestic Reforms on the Indian
Cotton and Textile Sectors

TEXTILE AND clothing quotas under the Multifiber
Arrangement is removed in conformity with the
Uruguay Round Agreement on Textiles and Clothing (ATC). The
phaseout of quotas could affect U.S. textile exports and clothing
imports through increased opportunities for suppliers including
China, India, and other Asian exporters that do not
benefit from preferential import terms. Overall increases in
demand for textiles should raise demand for cotton and create
new export opportunities for the United States. One country with large potential in cotton, textiles, and clothing trade is India. India’s likely response to ATC implementation depends as much on its own domestic policies as on the new export and import
opportunities. India’s high import barriers, domestic taxes, cotton
export quotas, and restrictive policies on foreign investment impede
the sector’s productivity and limit trade both for importers (textile)
and exporters (clothing). Moreover, India has long discriminated
against man-made fiber, creating an over-reliance on cotton.
This article, using a multi-region applied general equilibrium model,
examines the combined effect of quota removal and domestic policy
reforms in India on India’s cotton textile industry and trade. The key
finding from the model scenarios is that while the quota removal leads
to an expansion of India’s clothing exports and textile imports, the
extent of trade expansion depends significantly on India’s implementing
trade-enhancing domestic reforms.

[raj_chopada2001]

Hi,
This is for all those who don't know abt WTO

WTO-AoA NEGOTIATIONS

STATE OF PLAY

GENESIS

• WTO Came into existence on 1-1-1995 with the conclusion of Uruguay Round Multilateral Trade Negotiations at Marrakesh on 15th April 1994, to :

• • Provide common institutional framework for conduct of trade relations among members

• • Facilitate the implementation, administration and operation of Multilateral Trade Agreements

• • Lay down Rules and Procedures Governing Dispute Settlement

• • Provide Trade Policy Review Mechanism

Agreement on Agriculture (AoA)

To establish a fair and market oriented agricultural trading system through substantial progressive reduction in agricultural support and protection resulting in correcting and preventing restrictions and distortions in world agricultural markets.

AREAS OF COMMITMENTS

• Domestic Supporti.e. subsidies by Governments to domestic producers;

• Market Accessi.e. the disciplines on import restraints and tariffs; and

• Export Competition i.e. export subsidies and other forms of export subsidisation.

Domestic Support

• • • Green Box - Research, Extension, PDS, Decoupled

• • • Payments etc;
    • Blue Box - Production Limiting Subsidies ;
    • Amber Box - AMS-subject to reduction commitments viz

- Product specific (MSP)
- Non product specific (input subsidies-fert. Power,
irrigation) ;

• Total Agricultural support reduction (Base period : 1986-8
  • • • • Developed countries 20 % (1995 - 2000)
        • Developing countries 14% (1995 - 2004)

• • • De-minimis level
      • • Developed countries 5% ;
        • Developing countries 10% .

Market Access

• All non-tariff barriers including, Quantitative Restrictions to be abolished

• Tariff cut Commitments :
  • • Developed countries - Average 36%

• • • - Minimum 15% (1995 - 2000)
    • Developing countries - Average 24 %
      - Minimum 10% (1995 - 2004)

IMPACT ON INDIA (Market Access)

• Bound tariff * levels for India:

Primary products 100% Processed products 150% Edible oils 300%
* (Some exceptions (119 items) are governed by other provisions of GATT Art.II 1(b).

Export Subsidies

• Cut in value of subsidies
  • • Developed countries - 36 % (1995 - 2000)
    • Developing countries - 24 % (1995 - 2004)

• • Cut in subsidised quantities
    • • Developed countries - 21 % (1995 - 2000)
      • Developing countries - 14 % (1995 - 2004)

(Base Period : (1986 - 1990)

• • To develop internationally agreed disciplines to govern

export credits, guarantees or insurance programmes.

[raj_chopada2001]

Doha Ministerial Conference

Fourth Ministerial Conference on WTO was held at Doha, Qatar from 9-13th November 2001
This conference, inter alia, reviewed the progress of AoA negotiations and provide guidelines for future.
The Ministers at Doha committed themselves to negotiation aimed at substantial improvement in market access, substantial reduction in trade distorting domestic support and gradual phasing out of export subsidies.
The special and differential treatment - an integral part of the mandated agricultural negotiations.

India Seeks

• Protecting our food and livelihood security by having sufficient flexibility for domestic policy measures.

• Protecting domestic producers from the surge in imports or significant decline in import prices.

• Substantial reduction in export subsidies and domestic support to agriculture in the developed countries for greater market access to products of developing countries.

• Finally, a more equitable & fair trading framework for

agricultural commodities
MARKET ACCESS ISSUES CAN NOT BE SEEN IN ISOLATION TO SUBSIDY REGIME

Present Stage of Negotiations

• The third phase of negotiations ended in March-2003.
• As per original schedule, the modality of the Agreement were to be established by 31.03.2003.
• The deadline for establishment of Modality has been missed
• In the last one year a number of drafts for establishment of Modality have been proposed
• The major drafts include, Harbinson’s original and revised draft, US-EU combined draft, Original Cancun Draft and the Derbez Text (Cancun revised draft )

Present Stage of Negotiations

• The Cancun Ministerial failed to arrive at any agreement on modality for agriculture.
• There was no willingness on part of developed countries to recognize the genuine concerns of the developing countries, especially in agriculture
• The US & EU attempted to drive their own agenda, at the expense of Doha Declaration
• The concerns of the developing countries were expressed by a group viz. G-20 at Cancun.
• India, China, Brazil, Argentina and South Africa were the moving spirits behind the formation of this Group.

Present Stage of Negotiations

• Some of important features of the two Harbinson Drafts are as follows:
• Includes the crucial numbers. Framework proposes modalities.
• Tariff reduction higher than Uruguay Round, using the concept of average and minimal reductions based on tariff bands.
• Introduction of a new concept of Special Products for developing countries, average tariff reduction on SP to be at 10%, and minimum reduction, 5%.
• Introduction of Safeguard Mechanism for developing countries.

Present Stage of Negotiations

• Reduction mainly in the amber box support by developed countries.
• Reduction in the De-minimis support for developed countries
• Proposals only to discipline the Blue Box payments, no reduction.
• Proposals to tighten the criteria for Green Box payments for developed countries, expansion of Green Box for developing countries
• Elimination of direct export subsidies over a longer period. Indirect subsidies; no final proposal

Present Stage of Negotiations

• The S&D for the developing countries remains on the lines as Uruguay Round.
• The S&D for developing countries include, a marginally lower rate of tariff reduction, a longer implementation period, provision of Special Products with lower tariff reduction, provision of Safe guard mechanism, retention of provisions at para 6.2 of the present AoA, with possible widening and retention of de-minimus in Amber Box Support

Present Stage of Negotiations

• The US-EU draft, and the two Cancun drafts are similar in nature and their main features are:
• The drafts propose only a framework. They don’t indicate the key numbers
• Aggressive reductions in tariff by using a hybrid formula. Swiss formula to be a component of the hybrid formula
• Reduction for developing countries also to be by same formula, with lower final commitment.
• SPs to be limited in numbers.

Present Stage of Negotiations

• Reduction mainly in the amber box support by developed countries.
• Reduction in the De-minimis support for developed countries.
• Capping of product specific support in Amber Box
• Expansion of Blue box by inclusion of direct payments.
• Capping of the expenditure under new Blue Box, with a possible phased reduction over the implementation period.
• No reduction in Green Box payments. The criteria for Green Box payments may possibly be reviewed.
• Reduction commitments for developing countries lower with longer implementation period.

Present Stage of Negotiations

• The provisions of Article 6.2 to be continued.
• The de-minimus for the developing countries to be retained at 10%.
• Elimination of export subsidies over an extended period during the implementation period.
• The trade distorting elements of export credit to be similarly treated.
• No specific timeframe for elimination suggested.

India’s stand on various drafts

• The drafts fail to recognize the inter-linkages in the three pillars of AoA.
• The reductions suggested in domestic support are minimal, as compared to the steep reduction in tariff included in the Draft.
• The drafts fail to recognize the food security and livelihood concerns of the developing countries.
• The drafts are not meeting the spirit of Doha Development Agenda.

Developments Post-Cancun Ministerial

• The G-20 has survived the pressures of the developed countries and almost remained united on agriculture issues.
• The Cancun process led to loss of confidence of developing countries in the developed countries.
• The negotiations have formally not yet started at Geneva.
• The stress, at present is more on arriving at bilateral understandings.
• G-20 had bi-laterals with EU, one in Brazil and other in Geneva.
• India has had separate bilateral discussions with USA as well as EU.

[raj_chopada2001]

why no body is posting in this thread?????????????????????????????????????

[catdilse]

Originally Posted by raj_chopada2001

why no body is posting in this thread?????????????????????????????????????

bcoz nobody wud be interested by this topic at present, coz the time is wrong.

So many puys wud have contributed if u started the same stuff in IIFT thread otherwise it doesnt and wud nt interest nybody at present coz no such need is there.

moreover this wto stuff doesnt come under yr thread heading so dat might me another reason of failing to attract the experts on this topic .

plz keep it for finance discusssion only otherwise those who come for that wud also loose interest.
Regards.

[raj_chopada2001]

Hi,

Knowlege about Stock market terminology,

Option:-

call option gives the holder the right to buy an underlying asset by a certain date for a certain price. The seller is under an obligation to fulfill the contract and is paid a price of this which is called "the call option premium or call option price".

A put option, on the other hand gives the holder the right to sell an underlying asset by a certain date for a certain price. The buyer is under an obligation to fulfill the contract and is paid a price for this, which is called "the put option premium or put option price".

[raj_chopada2001]

Derivative is a product/contract which does not have any value on its own i.e. it derives its value from some underlying.

Forward contracts

• A forward contract is one to one bi-partite contract, to be performed in the future, at the terms decided today.
  (E.g. forward currency market in India).
• Forward contracts offer tremendous flexibility to the parties to design the contract in terms of the price, quantity, quality (in case of commodities), delivery time and place.
• Forward contracts suffer from poor liquidity and default risk.

Future contracts

• Future contracts are organised/ standardised contracts, which are traded on the exchanges.
• These contracts, being standardised and traded on the exchanges are very liquid in nature.
• In futures market, clearing corporation/ house provides the settlement guarantee.

Every futures contract is a forward contract. They :

• are entered into through exchange, traded on exchange and clearing corporation/house provides the settlement guarantee for trades.
• are of standard quantity; standard quality (in case of commodities).
• have standard delivery time and place.

[jhaji]

hi raj

can you please explain me why there is fluctuations in the stock price of a company??
why does sometimes stock price rise and sometimes falls??

please explain with some examples if possible.

[andy_jaan]

Originally Posted by jhaji

hi raj

can you please explain me why there is fluctuations in the stock price of a company??
why does sometimes stock price rise and sometimes falls??

please explain with some examples if possible.

dude sorry but the question sounds like "wat's the cause of illness.............y people some time remain healthy or fell ill"..............and requiring a capsule (single post) detailo of entire MBBS
Neways broadly just get that stock market is where we deal in stocks which can be understood as owned pieces of entire company. So now as the company valuation fluctuates randomly with each development so does it stock prices!....But above everything its humans doing all that trading so please superimpose a lot of speculation/greed/fear/tactics/...and all those psychological factors of million players putten together..........and I think u won't find ever changing stock prices ammusing anymore
regards
Andy

[Nikolai]

Nothing is thaaaat random!!!

The reason why a stock price would rise or fall is due to perception of the company by the buyer of the stock.

The price of a stock is usually a multiple of its earnings. This multiple is called a P/E ratio. Usually, the P/E lies between 15-20. Anything above 20 means that the investors in the stock believe that the stock earnings will rise.

(remember, earnings are a step/hysteresis function of profitability!)

Now suppose the previous earning of a stock is rs. 20, p/e = 15; the stock price will be rs. 300. ok? this means the investors expect around rs. 20 as dividend from each share.

Now suppose the company lands a big contract, or the government reduces taxes on its products, or the company gets cheap raw materials, or it gets an excellent CEO, inter alia, the stock price will rise because the investors will expect a higher earning in their next dividend. In the same way, bad news will drive the stock price down.

In a perfect world, the share price would reflect perfectly on the company's financial health. However, the market may behave dynamically, acting independent of fundamentals.

One thing is sure, if the fundamentals of the company are strong, the stock wont fall for long.

'Market sentiment' is the term used to describe rumors that the buyers have heard or if some inside information has leaked out. Panic selling happens when some news leaks out that a share is bad and people try to sell their shares at whatever price possible thus creating more supply of shares than demand and thus the price of the share drops.

Conversely, if people start buying a share, creating more demand than supply, the share price goes up. This is the most basic funda. The price goes up when more people want the share (they'd want it if the company is promising). The share price goes down, when people are trying to get rid of their shares.

Please note that unless the number of people in the above cases is substantial, like a whole brokerage is trying to sell their shares, impact on the market share price is negligible.