Daily Current Affairs for UPSC IAS | 6th November 2021

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1.  Charting a trade route after the MC12

UPSC Syllabus: Mains – GS Paper II – International Relation
Sub Theme: Nuclear enrichment | UPSC

For the first time in its 25-year history, the World Trade Organization (WTO) will be led by a woman, as both the contending candidates for the Director-General (D-G) post are women, from Nigeria and South Korea respectively. In this regard the new leadership will have a slew challenges to navigate through.

The WTO is a body designed to promote free trade through organizing trade negotiations and act as an independent arbiter in settling trade disputes. To some extent the WTO has been successful in promoting greater free trade. The principles of the WTO are

  1. Promote free trade through gradual reduction of tariffs
  2. Provide legal framework for negotiation of trade disputes. This aims to provide greater stability and predictability in trade.
  3. Trade without discrimination – avoiding preferential trade agreements.
  4. WTO is not a completely free trade body. It allows tariffs and trade restrictions under certain conditions, e.g. protection against ‘dumping’ of cheap surplus goods.
  5. WTO is committed to protecting fair competition. There are rules on subsidies, dumping
  6. WTO is committed to economic development. For example, recent rounds have put pressure on developed countries to accelerate restrictions on imports from the least-developing countries.

Advantages of promoting free trade

  1. Lower prices for consumers. Removing tariffs enables us to buy cheaper imports
  2. Free trade encourages greater competitiveness. Through free trade, firms face a higher incentive to cut costs. For example, a domestic monopoly may now face competition from foreign firms.
  3. The law of comparative advantage states that free trade will enable an increase in economic welfare. This is because countries can specialise in producing goods where they have a lower opportunity cost.
  4. Economies of scale. By encouraging free trade, firms can specialise and produce a higher quantity. This enables more economies of scale, this is important for industries with high fixed costs, such as car and aeroplane manufacture. In new trade theory, it is this specialisation and exploitation of economies of scale that is most important factor in improving economic welfare.

Successes of WTO

To what extent has the WTO being able to promote free trade?

 

  • The WTO has over 160 members representing 98 per cent of world trade. Over 20 countries are seeking to join the WTO.
  • An increased number of trade disputes have been brought to the WTO, showing the WTO is a forum for helping to solve disputes.
  • WTO regulations and co-operation helped avoid a major trade war; this was significant during 2008/09 global recession. We could compare this to 1930s, where trade wars broke out causing a fall in global trade. According to (Bagwell and Staiger 2002) the average tariff in 1930s was 50%. In 2000s, average tariff is 9%

World exports as a % of GDP have increased from 22% of GDP in 1995 (when WTO formed to just under 30% in 2015. Indicating importance of trade to global economy.

Disadvantages of WTO

  • However, the WTO has often been criticised for trade rules which are still unfavourable towards developing countries. Many developed countries went through a period of tariff protection; this enabled them to protect new, emerging domestic industries. Ha Joon Chang argues WTO trade rules are like ‘pulling away the ladder they used themselves to climb up’
  • Free trade may prevent developing economies develop their infant industries. For example, if a developing economy was trying to diversify their economy to develop a new manufacturing industry, they may be unable to do it without some tariff protection.
  • WTO is being overshadowed by new TIPP trade deals. These deals are negotiated away from WTO and focuses mainly on US and EU. It excludes China, Russia, India, Brazil and South Africa. It threatens to diminish the global importance of WTO
  • Difficulty of making progress. WTO trade deals have been quite difficult to form consensus. Various rounds have taken many years to slowly progress. It results in countries seeking alternatives such as TIPP or local bilateral deals.
  • WTO trade deals still encompass a lot of protectionism in areas like agriculture. Protectionist tariffs which primarily benefit richer nations, such as the EU and US.
  • WTO has implemented strong defense of TRIPs ‘Trade Related Intellectual Property’ rights These allow firms to implement patents and copyrights. In areas, such as life-saving drugs, it has raised the price and made it less affordable for developing countries.
  • WTO has rules which favour multinationals. For example, ‘most favoured nation’ principle means countries should trade without discrimination. This has advantages but can mean developing countires cannot give preference to local contractors, but may have to choose foreign multinationals – whatever their history in repatriation of profit, investment in area.

Evaluation

  • In response to this the WTO may say that free trade has been an important engine of growth for developing countries in Asia. Although there may be some short term pain, it is worth it in the long run.
  • Also the WTO has sought to give exemptions for developing countries; enabling in principle the idea developing countries should be allowed to limit imports more than developed countries.

2.  Iran may have 210 kg of 20% enriched uranium

UPSC Syllabus: Mains – GS Paper II – International Relation
Sub Theme: Nuclear enrichment | UPSC

Context: Iran’s atomic agency said on Friday that its stockpile of 20% enriched uranium has reached over 210 kilograms, the latest defiant move ahead of upcoming nuclear talks with the West.

  • So far Iran has also produced 25 kilograms of 60% enriched uranium, a level that only countries with nuclear weapons have the physical capabilities to produce.
  • What makes the 60 percent enrichment level particularly threatening is that the tricky process of enrichment becomes far easier and requires fewer centrifuges as it moves into the higher purities. In other words, getting to 90 percent purity is much easier starting from 20 percent, and easier still starting from 60 percent.
  • Under the historic 2015 nuclear deal between Iran and the World Powers, Iran was not meant to enrich uranium above 3.67%. Enriched uranium above 90% can be used for nuclear weapons.

 

Uranium Enrichment

  • Natural uranium consists of two different isotopes – nearly 99% U-238 and only around 0.7% of U-235.
  • U-235 is a fissile material that can sustain a chain reaction in a nuclear reactor.
  • Enrichment process increases the proportion of U-235 through the process of isotope separation (U-238 is separated from U-235).
  • The goal of uranium enrichment is to raise the percentage levels of U-235, which is often done through the use of centrifuges — machines that spin a form of unrefined uranium at high speeds.
  • For nuclear weapons, enrichment is required upto 90% or more (Highly Enriched Uranium/weapons-grade uranium.)
  • For nuclear reactors, enrichment is required upto 3-4% (Low Enriched Uranium/reactor-grade uranium.)

After President Donald J. Trump repudiated the Iran deal in 2018, reimposed economic sanctions on Iran and added other penalties, Iran undertook a graduated series of steps away from compliance with the deal to retaliate — increasing its 3.67 percent uranium supply, adding centrifuges, raising uranium purity in some of the supply to 20 percent and restricting international inspectors’ access to some nuclear sites.

European Union, Iran and the U.S. announced on Wednesday that indirect talks to resuscitate the deal would resume on November 29 in Vienna.

2015 Nuclear Deal

  • In 2015, Iran with the P5+1 group of world powers – the USA, UK, France, China, Russia, and Germany agreed on a long-term deal on its nuclear programme. The deal was named as Joint Comprehensive Plan of Action (JCPOA) and in common parlance as Iran Nuclear Deal.
  • Under the deal, Iran agreed to curb its nuclear activity in return for the lifting of sanctions and access to global trade.
  • The agreement allowed Iran to accumulate small amounts of uranium for research but it banned the enrichment of uranium, which is used to make reactor fuel and nuclear weapons.
  • Iran was also required to redesign a heavy-water reactor being built, whose spent fuel would contain plutonium suitable for a bomb and to allow international inspections.
  • In May 2018, the USA abandoned the deal criticising it as flawed and reinstated and tightened its sanctions.
  • Since sanctions were tightened, Iran has been steadily breaking some of its commitments to pressure the remaining signatories to find a way to provide sanctions relief.

3.  The right time for India to have its own climate law

UPSC Syllabus: Mains – GS Paper III – Environment & Ecology
Sub Theme: India’s own climate law | UPSC

Context: In light of PM’s commitment at Glasgow for ‘Panchamrit solution’ aiming at reducing fossil fuel dependence and carbon intensity and ramping up its renewable energy share to 50% by 2030, India needs to legislate a climate law to achieve its goals of climate justice.

Weather v Climate

Weather is the momentary state of the atmosphere while climate refers to the average of the weather conditions over a longer period of time. Weather changes quickly, may be within a day or week but climate changes and may be noted after 50 years or even more.

Need for Climate Law

As of now, our existing laws such as Environment Protection Act, Wildlife Protection Act, Air (Prevention and Control of Pollution) Act, 1981, and Water (Prevention and Control of Pollution) Act, 1974 does not particularly deals with climate vulnerabilities.

Problems with Environment Protection Act (EPA)

EPA is grossly inadequate to deal with violations on climate. Section 24 of EPA mentions about effect of other laws – Where any act or omission constitutes an offence punishable under this Act and also under any other Act, then the offender found guilty of such offence shall be liable to be punished under the other Act and not under this Act. – Thus, this reflects that EPA is subordinate to other law, for example Indian Penal Code.

There is a need to integrate climate action – adaptation & mitigation – as comprehensive climate action is not just technological (such as changing energy sources or carbon intensity), but also nature-based (such as emphasising restoration of ecosystems, reducing natural hazard and increasing carbon sinks.)

Taking biocentrism as part renewable energy goals

Biocentrism is a philosophical and ethical premise that all living organisms including wildlife, birds etc. should be considered as equals. Thus, while achieving goal of 500 Gigawatt by 2030 goal for renewable, solar or wind power, care must also be taken about critically endangered species which die due to installed electrical wires.

Climate Law should consider two aspects:

  1. Creating an institution that monitors action plans for climate change for which Commission on Climate Change can be set up with the power and the authority to issue directions, and oversee implementation of plans and programmes on climate. The Commission could have quasi-judicial powers with powers of a civil court to ensure that its directions are followed in letter and spirit. It should be assisted by a technical committee which can advise the commission in the discharge of its functions as well as guide various private and public agencies in meeting their climate-related obligations. As an example, the commission could look at agencies or institutions that have a disproportionate impact on climate or environment, and suggest lower energy pathways that are adhered to.
  2. We need a system of liability and accountability at short-, medium- and long-term levels as we face hazards. This also means having a legally enforceable National Climate Change Plan that goes beyond just policy guidelines.

Need to Trace Carbon Footprints from start to finish

  • In a recent case in the National Green Tribunal it was revealed that the National Thermal Power Corporation did not even cover coal wagons with tarpaulin on railways, decades after environmental clearances were granted in 1999, in Chhattisgarh.
  • In 2020, the Supreme Court passed an order directing for the wagons to be covered within a month’s time. There will be eventual emissions by coal use. But there is also the issue of respirable coal dust that is spewed into the air through irresponsible transportation.
  • The ban on plastic bags in Delhi is a failure because plastic bag substitutes were never really pushed at scale by the understaffed environment department. A plastic bag ban to succeed in one State requires a similar commitment from neighbouring States. A nation-wide intervention here, led by a Climate Commission, considering substitutes at scale for plastic-based products (which are derived from petroleum) and looking at both innovation and implementation, would be useful.

4.  U.S. jabs still out of reach in India due to indemnity issue

UPSC Syllabus: Mains – GS Paper II – International Relation
Sub Theme: Indemnity issue | UPSC

More than six months after the Central Government announced it would fast-track clearances for foreign COVID-19 vaccines to India, “facilitate quicker access” and “encourage imports”, indemnity issues are still holding up the import of all American vaccines to India, including Pfizer, Johnson and Johnson (J&J) and Moderna.

With the Australia-India-Japan-U.S. Quad pressing ahead with plans to produce J&J vaccines at a facility in Hyderabad, officials indicated that the indemnity clause, required by U.S. companies to avoid legal liability for their vaccines, could mean that India will produce the vaccines only for export, and not to supply them domestically.

What is indemnity and why is it sought?

  • In simple terms, indemnity means security against a loss or other financial stress. In legal terms, it means a contractual obligation of one party to compensate another party due to the acts of the former.
  • The law on drugs in India does not have a provision for indemnity related to the grant of approval for any new drug or vaccine in the country. If at all any indemnity is to be granted to any company for a particular drug or vaccine, it can only be in the form of an indemnity bond executed on behalf of the government of India, or a clause or set of clauses in any contract that the government may sign with the supplier
  • There is no precedent for any company getting such indemnity in India for any drug.
  • In the absence of indemnity, overseas manufacturers may load the risk onto the price of the vaccines, making each dose more expensive.

Indian Contract Act, 1872

  • Section 124 of the Indian Contract Act, 1872, defines a contract of indemnity as one by which one party promises to save the other from any loss caused to the latter.
  • Once the government of India grants such indemnity to the vaccine manufacturer or importer, it would mean that if a particular vaccine is perceived to have caused death or any lasting damage to a recipient, any claim of compensation arising from it will have to be met by the government, and not by the company.
  • In the event of a court ordering payment, the company will be in a position to recover the amount from the government.

Civil Liability for Nuclear Damage Act

The Civil Liability for Nuclear Damage Act, 2010 aims to cater to the civil requirements for victims of those who were affected due to nuclear disasters. This act ensures apt compensation as a helping hand for the victims.

The Civil Liability for Nuclear Damage Act, 2010 seeks to create a mechanism for compensating victims of nuclear damage arising from a nuclear incident.

Key Features Nuclear Damage Act, 2010

  • It fixes liability for nuclear damage and specifies procedures for compensating victims.
  • The Bill fixes no-fault liability on operators and gives them a right of recourse against certain persons. It caps the liability of the operator at Rs 500 crore.  For damage exceeding this amount, and up to 300 million SDR, the central government will be liable.
  • All operators (except the central government) need to take insurance or provide financial security to cover their liability.
  • For facilities owned by the government, the entire liability up to 300 million SDR will be borne by the government.
  • The Bill specifies who can claim compensation and the authorities who will assess and award compensation for nuclear damage.

National Green Tribunal Act of 2010 

  • It incorporates the absolute liability principle.
  • Section 17 of the act mandates that the Tribunal should apply the absolute liability principle even if the disaster caused is an accident.
  • A hazardous enterprise is liable even if the disaster is an accident and not caused by the negligence of the company.

Strict Liability Principle: Under it, a party/company is not liable and need not pay compensation if a hazardous substance escapes its premises by accident or by an ‘act of God’ (Force Majeure) among other circumstances.

Absolute Liability Principle: Under it, a party/company in a hazardous industry cannot claim any exemption. It has to mandatorily pay compensation, whether or not the disaster was caused by its negligence.

The Supreme Court, in the M.C. Mehta vs Union of India 1987, found strict liability principle inadequate to protect citizens’ rights and replaced it with the absolute liability principle.

 

5.  Duty cuts, stock limits helped curtail edible oil prices: Govt.

UPSC Syllabus: Mains – GS Paper III – Indian Economy
Sub Theme: Edible oils | UPSC

Context: Prices of many major edible oils have come down due to duty cuts and collaborative efforts by the centre, states, and private players. However, at national level, average prices remain same.

Why prices are high?

  1. Rise in the prices at international markets.
  2. Import duties on edible oils is as high as 35% against global practice of 10-15%.
  3. There is a sudden surge in demand of oil seeds due to revival of economy specially food markets.
  4. Rising per capita income in India.
  5. Changing food habits of people.
  6. Diversification of oilseeds demand in India. Demand of palm oil is ever rising. Olive oil is also finding place in Indian households.
  7. Festive seasons is other reason for high demand of edible oil in India.
  8. Mustard oil faced further pressure given that due to lockdowns, home-cooked food saw increased consumption, which is where mustard oil is mostly used.
  9. Cropping pattern in India is not meeting the rising demand of edible oils due to monotonic nature (high focus on cereals, pulses and horticulture).
  10. Small farm sizes and outdated farming practices mean that Indian farming is one of the most inefficient in the world. For example, the yield of soyabean in Brazil is around than three times that in India.

6.  In Kedarnath, PM hails India’s ‘rishi tradition

UPSC Syllabus: Mains – GS Paper I – Art & Culture
Sub Theme: Adi Sankara | UPSC

Context: Prime minister Narendra Modi has inaugurated several development works in Kedarnath, Uttarakhand, including the unveiling of a statue of Adi Sankara and monuments related to his samadhi.

From UPSC perspective it is important for us to know about Adi Sankara and his philosophy.

Adi Shankara

  • He was also known as Shankaracharya. Born in Kaladi, Kerala in 788 CE.
  • Propounded the Doctrine of Advaita (Monism) and wrote many commentaries on the Vedic canon (Upanishads, Brahma Sutras and Bhagavad Gita) in Sanskrit.
  • His major works included Brahmasutrabhasya (Bhashya or commentary on the Brahma Sutra), Bhajagovinda Stotra and Nirvana Shatakam.
  • He was responsible to revive Hindu philosophy at a time when Buddhism was gaining momentum in India.
  • He is created to establish four Mathas (Hindu Monastaries) at Shingeri, Puri, Dwaraka and Badrinath– for propagation of Sanathana Dharma in four corners of India.
  • Adi Shankaracharya was opposed to Buddhist philosophers.
  • Philosophy of Adi Shankara is part of Vedanta (One of the six schools of Aastik Hindu Philosophy).

Advaita philosophy

Advaita Vedanta refers to the non-dualistic school of Hindu philosophy, which is derived mostly from the Upanishads and elaborated in detail by eminent scholars like Gaudapada and Sri Adi Shankaracharya. Dvaita means duality, and Advaita means nonduality. In simple terms, Advaita means absence of the duality between subject and object.

Advaita school believes that Brahman is the one and only reality and everything else is a mere appearance, projection, formation or illusion. One of the most common examples used to describe the state is momentarily seeing a snake in a rope when it is lying in the darkness. The snake is an illusion, and the rope is the reality. In the same manner the world appears in the mind as a formation over the Self.

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