India and the United States are preparing for a serious dispute: since the cow is revered in India as a sacred animal, the country has banned dairy products of American origin, according to The Economic Times.
The question is not new, but now the administration of U.S. President Donald trump uses the prohibition as the basis for revision of the benefits of Indian goods in the framework of the General system of trade preferences (GSP). GSP provides duty-free access for about 3.5 thousand of Indian goods to the markets of USA.
The dairy industry in the United States actively lobbied their interests in the Trade mission of the USA (USTR), asking to suspend the participation of Indian goods in the GSP, in particular because India does not provide dairy products of the United States “fair and reasonable” access to its market.
The decision to ban American dairy products was passed in India in 2003, It was due to the fact that in the US cows were fed food containing products of animal origin and blood, what in India is considered unacceptable.
To circumvent this problem, the United States proposed a “decision on the marking” in 2015, after Prime Minister Narendra modi came to power. It was suggested to introduce special marking to denote “non-vegetarian” dairy products made of milk from animals that have consumed feed protein in ruminants. India so far has rejected this proposal on the grounds that feeding the cows with proteins of ruminants offend Indian religious and cultural feelings.
On Tuesday, the Council on the export of dairy products of the United States (USDEC) gave trade representation detailed comments on this issue and even asked to testify at the hearing on non-tariff barriers of India on June 19.
“India presents a large and unrealized market opportunity for the dairy industry of the United States. USDEC estimates that addressing this issue could lead to additional exports in the range of $30 million to $100 million… depending on the nature of the decision and growth in the Indian market over the next few years,” wrote the Council in a letter to the trade mission from June 5.
Washington through diplomatic channels has informed new Delhi that he was forced to revise the benefits provided by India under GSP, after repeated representations from the dairy industry. For its part, India said the US, they just have to respect the Indian religious and cultural sentiments on this issue.
As reported “Vesti.Economy,” in may, the U.S. notified the world trade organization (WTO) that India lowers rates of market price support to wheat and rice.
“Judging by the calculations of the United States, India, appear to be significantly underestimates the performance of its market price support for wheat and rice. Calculated in accordance with the WTO agreement on agriculture methodology support India market prices of wheat and rice greatly exceeded the permitted levels of domestic support having a distorting effects on trade,” said the Ministry of agriculture of the United States.
The ECB will discuss the rejection of QE at a meeting in June
The European Central Bank (ECB) will discuss next week the question of rolling program of buying bonds, which is scheduled for the end of this year, said the chief economist of the British Central Bank.
Although politicians generally agree that the purchase should be completed this year, ECB President Mario Draghi avoided any official discussion on the conclusion of the program, trying to find more evidence that inflation is on the path of sustainable recovery.
But the comments of Peter Pratt, a close ally Draghi indicate that the ECB is satisfied with inflation, which increases the risk that the decision may be taken earlier.
“Next week’s governing Council (ECB) will have to assess what progress has been made to ensure the phasing of our net purchases (debt obligations),” said Pratt, in his last speech before the next ECB meeting, noting that it would be a fateful decision.
Bond yields in the Eurozone increased, while the Euro reached a 10-day high against the dollar on comments that Pratt, who is considered one of the most “dovish” (a supporter of soft monetary policy) members of the Board of governors of the Central Bank.
Some analysts believe that the decision to curtail the program of buying bonds (quantitative easing – QE) will be taken at the meeting on 14 June, while others believe that the main debate on this issue will take place in July.
