(a)
• The WTO recognizes as Least-Developed Countries (LDCs) those countries which have been designated as such by the United Nations.
• There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether they are “developed” or “developing” countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries. (UN declares a list of developing economies also)
• Under the normal WTO trade laws, the WTO members must give equal preferences to trade partners. There should not be any discrimination between countries. This trade rule under the WTO is called the Most Favoured Nation (MFN) clause/principle. The MFN instructs non-discrimination i.e. no favourable treatment to a particular country. At the same time, the WTO allows members to give special and differential treatment to developing and LDC countries (like zero or less tariff imports). This is an exemption to MFN principle. The Generalized System of Preferences (GSP) given by developed countries including the US is an exception to MFN.
• Under GSP, developed countries offer preferential trade treatment on a non-reciprocal basis to products originating in developing countries. The reason for the non-reciprocalarrangement was to provide differential and more favourable treatment with a view to incentivising developing countries and promote their fuller participation in global trade.
• Effective from 5th June 2019, US terminated India’s designation as a ‘beneficiary developing country’ under the GSP programme.

(c)
• The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
• The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally. In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.
• FATF has put Pakistan on its ‘watch list’ or ‘grey-list’ till June 2020 and has been asked to comply with the action plan to control funding to terrorist groups. Grey-listing Pakistan may result in a downgrade of its debt ratings, making it more difficult for it to tap into international bond markets.

(c)
• Remission of Duties or Taxes on Exported Products (RoDTEP)
• Before GST, any taxes on import (customs duties) of inputs required to manufacture exported products were refunded through Merchandise Export of India Scheme (MEIS) by giving Duty Credit Scrips to exporters. This means if I export goods worth Rs. 100 crores then govt used to give me a paper (Duty Credit Scrip) worth Rs. 2crore (some % of export value) which I could use to pay/adjust my customs duties on import of raw materials. There were certain exemptions on domestic taxes also in case of exports.
• But WTO said that the MEIS scheme is not compliant with the WTO trade rules (no need to go into it) and in 2020 it was replaced by Remission of Duties or Taxes on Exported Products (RoDTEP).
• Under GST regime, Govt. exempts GST/IGST (taxes paid in case of domestic production and import of raw materials) in case of exports and this is called “exports are zero rated”. Because first exporters pay GST/IGST (the standard rate) to the government and then they provide a proof to the government that it is a case of export (sold abroad) and the government reimburses the entire GST hence effectively no tax on exports.
• However, certain products are outside GST and the taxes/duties/levies imposed on these products are still not refunded in case of exports even in the present GST regime. These taxes are VAT on fuel used in transportation, Mandi tax, taxes on electricity, petroleum products etc (which becomes embedded in the product price). Under the new RoDTEP scheme, these taxes will be refunded to exporters in their ledger accounts with Customs. The credits can be used to pay basic customs duty on imported goods/raw materials. The scheme is available for all kinds of exports from 1st Jan 2021.

(d)
• SDR allocation to a member country is dependent on QUOTA assigned to the member country which depends on the country’s GDP and few other parameters.
• The IMF allocates each member country SDRs which acts as a debt for the member country.
• SDRs are not present in hard currency and are thus called paper gold or notional currency and can be held only by Govt. entity.

• Free Trade Agreements (FTA): A free trade agreement is a preferential arrangement in which members reduce tariffs on trade among themselves, while maintaining their own tariff rates for trade with non-members.
• Customs Union (CU): A customs union is a free trade agreement (FTA) in which members apply a common external tariff (CET) schedule to imports from non-members.
• Common Market (CM): A common market is a customs union (CU) where movement of factors of production is relatively free amongst member countries.
• Economic Union (EU): An economic union is a common market (CM) where member countries coordinate macro-economic and exchange rate policies.