03 January, 2021 - Daily Current Affairs Analysis & MCQs - The Daily News Simplified from The Hindu
- The BREXIT deal - (International Relations)
- Trade Deficit (Economy)
- FATF - (International Relations)
- Deepor Beel - (Environment)
- Question for the day (Environment)
UPSC Current Affairs: The Brexit Deal | Page - 12
UPSC Syllabus: Prelims: International Relations | Mains – GS Paper II – IR
Sub Theme: Brexit | Impact of Brexit | UPSC
What is Brexit?
Brexit - British exit - refers to the UK leaving the EU.
The UK voted to leave the EU in 2016 and officially left the trading bloc - it's nearest and biggest trading partner - on 31 January 2020.
Both sides agreed to keep many things the same until 31 December 2020, to allow enough time to agree to the terms of a new trade deal.
What is the European Union?
- The EU is an economic and political union involving 28 European countries. It allows free trade and free movement of people to live and work in whichever country they choose.
- The UK joined in 1973 (when it was known as the European Economic Community). UK is the first member state to withdraw from the EU.
UK-EU Trade and Cooperation Agreement
- The deal contains new rules for how the UK and EU will live, work and trade together.
- It retains the ‘zero tariffs’ and quotas trade regime of the past on all imports of goods.
- Under the terms of the deal both sides had to agree to some shared rules and standards on workers' rights, as well as many social and environmental regulations.
- There will be no taxes on goods (tariffs) or limits on the amount that can be traded (quotas) between the UK and the EU from 1 January
- Some new checks will be introduced at borders, such as safety checks and customs declarations.
SERVICES AND QUALIFICATIONS
- Businesses offering services, such as banking, architecture and accounting, will lose their automatic right of access to EU markets and will face some restrictions.
- There will no longer be automatic recognition of professional qualifications for people such as doctors, chefs and architects.
EUROPEAN COURT OF JUSTICE AND OTHER DISPUTES
- There will be no role in the UK for the European Court of Justice (ECJ), which is the highest court in the EU.
- Disputes that cannot be resolved between the UK and the EU will be referred to an independent tribunal instead.
What changes after January 1 2021?
- Freedom to work and live between the UK and the EU also comes to an end, and in 2021, UK nationals will need a visa if they want to stay in the EU more than 90 days in a 180-day period.
- The UK is free to set its own trade policy and can negotiate deals with other countries. Talks are being held with the US, Australia and New Zealand - countries that currently don't have free trade deals with the EU.
- Disruption at borders - There may not be new taxes to pay at the border, but there will be new paperwork, and the potential for it to cause delays is a serious concern
What all is not finalized? Decisions are still to be made on data sharing and on financial services, and the agreement on fishing only lasts five years.
BREXIT Impact on India
- Since the existence of EU single market, UK had been the bridge through which Indian companies used to enter into EU. Now Post Brexit, the Indian companies would have to strive separately for these two different markets.
- For Example: Brexit will increase overhead cost and setting up of new headquarters perhaps, in both EU and UK separately.
- Another example for elaboration: SO far, Jaguar, which is owned by TATA had enjoyed 0 customs duty in EU market. But post Brexit, they may face higher logistic costs and customs duties and other regulation, which will make these cars uncompetitive.
- Exchange rate uncertainty
- Due to Brexit, Pound may collapse rapidly leading wider ramifications on Indian rupee. This shall have Impact on
- Worsening CAD as dollar will be strengthened.
- The bonds raised by Indian firms will see rise in servicing costs.
- Indian exports to UK will suffer due to collapse of Pound
But there are also positive impacts of the Brexit on India. Lets discuss those:
- Post Brexit, UK would actively look for trade partners and following points will work in India’s favor:
- India’s traditionally strong ties with Britain.
- India’s emerging economy with large market.
- UK would be freed from strict rule based trading regime of EU and hence will make it easier for negotiating an FTA.
- Also the compulsions of arriving at consensus among various countries will be relieved, hence providing greater independence to UK.
- Freedom of movement shall be curtailed post Brexit and hence UK will have to look for other countries like India for Human resource.
UPSC Current Affairs:Trade Deficit grows to $15 Billion in December | Page - 1
UPSC Syllabus: Prelims: Economy, Schemes| Mains – GS Paper III – Economy
Sub Theme: Trade Deficit | Current Account Deficit | UPSC
India’s Merchandise Trade Performance- Composition and Direction of Foreign Trade
Trends in Merchandise Exports: Between 2009-14, the merchandise exports accounted for 16% of
However, since then the merchandise exports as % of GDP has steadily declined to 11.3% of GDP in first half of 2019-20.
Top 5 Export commodities: Petroleum Products, Pearls and Precious Stones, Drug Formulations, Gold
Jewelry, Iron and Steel.
Top 5 Export Destinations for India: USA, UAE, China, Hongkong and Singapore.
Trends in Merchandise Imports: Between 2009-14, the merchandise imports accounted for 24.3% of
However, since then the merchandise imports as % of GDP has steadily declined to 17.6% of GDP in the first half of 2019-20
Reasons for the decline in merchandise Imports as % of GDP:
- Decline in the International Crude oil prices (Crude oil accounts for 26% of India’s imports)
- Slowdown in the Indian Economy on account of declining demand has also led to decline in
Top 5 Import Commodities: Crude Oil, Gold, Petroleum Products, Pearl and Precious stones, Coal and
Coke, Top 5 Exporters to India: China, USA, UAE, Saudi Arabia, Iraq.
UPSC Current Affairs:LeT leader held ahead of FATF meet | Page - 01
UPSC Syllabus: Prelims: International Relations | Mains – GS Paper II– International Relations
Sub Theme: FATF | Money Laundering | UPSC
- The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog.
- The inter-governmental body sets international standards that aim to prevent these illegal activities and the
- harm they cause to society.
- As a policy-making body, the FATF works to generate the necessary political will to bring about national
- legislative and regulatory reforms in these areas.
- With more than 200 countries and jurisdictions committed to implementing them. The FATF has developed the
- FATF Recommendations, or FATF Standards, which ensure a co-ordinated global response to prevent organised
- crime, corruption and terrorism.
- They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other
- The FATF also works to stop funding for weapons of mass destruction.
- The FATF reviews money laundering and terrorist financing techniques and continuously strengthens its
- standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies
- gain popularity.
- The FATF monitors countries to ensure they implement the FATF Standards fully and effectively, and holds
- countries to account that do not comply.
- FATF does not address at all issues related to low tax jurisdiction or tax competition.
- The FATF mandate focuses only on the fight against laundering of proceeds of crimes and the financing of
- FATF issues a report containing a set of Forty Recommendations, which are intended to provide a
- comprehensive plan of action needed to fight against money laundering.
- In 2001, the development of standards in the fight against terrorist financing was added to the mission of the
- FATF thereby further adding 9 Special Recommendations.
- FATF has formed 40 recommendations against money laundering and 9 special recommendations against
- terrorist financing, which forms the commonly known ‘40+9’ FATF Standards.
- Mutual Evaluations
- The FATF conducts peer reviews of each member to assess levels of implementation of the FATF
- It provides an in-depth description and analysis of each country’s system for preventing criminal abuse of the
- financial system.
- FATF Listings
- FATF issues a list of ‘Non-Cooperative Countries or Territories’ (NCCTs), commonly called the FATF Blacklist.
- These countries or territories are considered to be uncooperative in international efforts against money
- laundering and terrorism financing.
- The grey list is a list of countries or territories with strategic anti-money laundering/countering the financing of terrorism deficiencies for which they have developed an action plan with the FATF.
SECURITY COUNCIL COMMITTEE ESTABLISHED PURSUANT TO RESOLUTION 1267
(1999) CONCERNING AL-QAIDA AND THE TALIBAN AND ASSOCIATED INDIVIDUALS
- The Committee was established on 15 October 1999 under resolution 1267 which imposed sanctions on Taliban-controlled Afghanistan for its support of Usama Bin Laden and Al-Qaida
- The sanctions regime has been modified and strengthened by subsequent resolutions, including resolutions 1333 (2000), 1390 (2002), 1455 (2003), 1526 (2004), 1617 (2005) and 1735 (2006).
- As of January 2002, the sanctions no longer exclusively target territory in Afghanistan but now apply to the individuals, groups, undertakings and entities designated on the Consolidated List wherever they may be located. 1267 Sanctions Committee
- The 1267 Committee oversees the implementation by UN Member States of the 3 sanctions measures. It considers names submitted for listing and de-listing as well as any additional information on listed individuals and entities.
- It also considers exemptions to the assets freeze and travel ban measures.
- The 1267 Committee is assisted by a Monitoring Team of 8 experts with expertise related to activities of the Al-Qaida organization and/or the Taliban, including counter-terrorism and related legislation; financing of terrorism and international financial transactions, including technical banking expertise; alternative remittance systems, charities, and use of couriers; border enforcement, including port security; arms embargoes and export controls; and drug trafficking.