Early Harvest Agreement (EHA) is a term that has gained significant attention in the international trade arena, especially in the context of the India-United States relationship. In this article, we will explore what Early Harvest Agreement is, its significance, and its relevance to the UPSC exam.
What is the Early Harvest Agreement?
The Early Harvest Agreement (EHA) is a bilateral trade agreement between two countries, aimed at accelerating the liberalization of trade in specific sectors. The agreement is a limited trade pact, which covers only a few items, rather than a comprehensive one covering a wide range of products and services.
In an Early Harvest Agreement, both parties agree to reduce or eliminate tariffs on certain goods, usually those that have a significant potential for trade growth. The idea behind an EHA is to enable the early and accelerated implementation of a trade agreement, with the hope that it would spur further liberalization in the future.
Why is the Early Harvest Agreement significant?
For countries that are looking to deepen trade ties, Early Harvest Agreements offer a way to establish a foundation for more comprehensive trade agreements by addressing immediate trade concerns. They provide an opportunity for both countries to identify and address low-hanging trade barriers, which can help boost trade flows in the short run.
Early Harvest Agreements also provide a signaling effect to the wider global trade community, indicating that both countries are serious about reducing trade barriers and promoting freer trade. Furthermore, since EHAs are limited in scope, they can be negotiated more quickly than broader agreements, providing an early win for both countries.
What is the relevance of Early Harvest Agreement to the UPSC exam?
For those preparing for UPSC exams, it is essential to understand the recent developments in international trade and how they could impact India`s economic growth. The Early Harvest Agreement is a crucial concept in this context, as it has significant implications for India`s trade relations with the United States.
In 2018, India and the United States signed an EHA, which aimed to reduce tariffs on certain goods to promote trade between the two countries. The agreement covered 24 agricultural products, which were identified as having significant potential for export growth. The agreement was seen as a step towards establishing a more comprehensive free trade agreement between the two countries.
However, in 2019, the United States terminated India`s participation in the Generalized System of Preferences (GSP), which allowed duty-free exports of certain products from India to the United States. The move was seen as a setback for India`s trade relations with the US, which had been growing steadily over the years.
In conclusion, the Early Harvest Agreement is a trade agreement that focuses on reducing tariffs on specific goods, paving the way for further liberalization in the future. EHAs are significant because they provide an opportunity for countries to establish a foundation for comprehensive trade agreements, and they can be negotiated quickly. For those preparing for the UPSC exams, understanding the concept of Early Harvest Agreements is essential, as it has significant implications for India`s trade relations with the United States.