Sample Economic Paper on U.S.-India Agreement on Stockpiles

U.S.-India Agreement on Stockpiles


International trade refers to the movement of goods across the national borders. The environment in which international trade is conducted has laws, agreements, and policy systems that collectively define the ease with which business is carried on. As such, the factors also influence food security among nations that share the same negotiation table. Stockpiling is the process of identifying, procuring, and storing large quantities of essential inventory items to offset probable shortfalls. For instance, India constantly employs this strategy to safeguard its poor citizens from possible food shortages. As such, the Indian administration buys cereals from farmers and reserves in the public distribution system to resell at lower prices (Thirani par. 8). This program has been termed ineffective, prompting the United States to negotiate in the best interest of global trade deals.


The recent agreement between the United States and the Indian government is a step forward in easing major trade obstacles in international trade. The arrangement allows India to continue extending its food subsidy program without negatively affecting the cross border movement of goods. Therefore, the improved customs procedures, reduced red tape, and an enhanced border infrastructure warrant vast economic developments particularly in the developing countries. This deal has gained credit in the view that approximately $1 trillion would be added to the global economy besides creating 21 million jobs (Thirani par. 4). However, critics argue that the arrangement would require extensive investment on ports and borders, hence causing a huge waste of resources. Food security is a critical issue that every government seeks to promptly resolve by providing safe, nutritious, and sufficient food to the people. As such, there is a need to promote joint operations in support of a long-term solution to the food problem both internally and globally.

The world trade organization was constituted to boost international trade by making the market a bit friendlier to all parties. To achieve this level of success, WTO undertakes to bridge the gap amid nations in terms of production, stockpiling, and market relations. On this note, countries such as the United States and Pakistan have expressed fears on a possible reduction in food prices if the India regime were to release surplus grain on the global market (Thirani par. 9). Due to these fears, WTO members agreed that temporary solutions including government subsidies should be applied to assure food security pending a lasting solution. The peace clause signed by India and the United States is meant to protect members from being legally penalized under the WTO rules if they acted contrary to the laid down policies. This gives member states a platform to negotiate on the issue deterring sound business deals, hence establishing useful insights. The agreement provides a better global environment that positively influences bilateral and transnational business operations.


International trade is one aspect that determines a country’s domestic product as well as the attained level of economic growth. As such, attempts to induce better performances in the global market helps nations to develop in terms of social and economic welfare. On that note, the United States intervention on the Indian stockpiling program helped to ease tension among business allies in the international framework, hence promoting trade (Thirani par. 10). Therefore, the agreement signed does not only enhance universal trade confidence, but also promotes socioeconomic as well as political security. Thus, supporting infrastructural development and policy implementation in the developing countries warrants comparative advantage, which would subsequently enhance output.




Works Cited

Thirani, Neha. “U.S.-India Agreement on Stockpiles of Food Revives a Trade Deal.” New York Times 13 Nov. 2014: Print.