Global Trade Wars: When Elephants Make Love the Grass Below Will Get Crushed

A few months ago in Bangalore, I was looking for bangles for a friend in Geneva. I went to three places across market segments. All three times, salespeople told me Korean bangles are best as enamel does t wear off and clasp is perfect.

Clasp is perfect. That could well be a metaphor that speaks to India saying country should be rey for tre wars more than ever in 2019 because grasp of industrial majors in global tre is firmly focussed on exports to Indian markets.

Me in China Ganesh idols to slippers, bags to clos to electronic equipment, t to mention solar panels are flooding Indian market even as our leers – across party lines – continue to extoll virtues of soft power and writes tomes on it.

re isn’t anything called soft power unless you believe incense sticks and pearls will open big doors where powers that are militarily and ecomically strong have alrey carved out ir and dug deep. Do t fall for juga logic eir. That kind of tinkering is fine when you want to fix an electric wire in your house or a street lamp in neighbourhood.

country has taken off ecomically based on juga. India’s share of global tre in two percent, manufacturing and services included. global tre dashboard will be extremely volatile in 2019, thanks in large part to ises from Washington and Beijing and a fast deteriorating situation between European Union (EU) and United States (US). In fact, never have relations between US and EU been as b in last 70 years as y are w.

It has been my view for over a dece that making in India for Indians is where India’s success story must begin. Unless Indians start consuming Indian products, healthcare, energy, goods and financial services, re is little point in expecting or countries to help us do so. Even if y were to do so, y would extract blood and make India a dumping ground. Much like in diplomacy where only interest is self-interest, so too in tre where re must be giving without getting.

One of a handful of journalists who reported closely on transition of General Agreements on Tariffs Tre (GATT) to World Tre Organisation (WTO), also called third leg of Bretton Woods organisations ( or two being World Bank and International Monetary Fund), here’s one thing I can say with certainty – if a country recognises India as a soft power, it is t a compliment. It means y are engaging in meaningless conversations to gain market access in India. India is growing at some seven percent as against a global aver of some three percent – that is a signal of something even if ecomists and politicians argue about it. Fact remains that next five years are very critical for India to remain stable and build on infrastructure, health, energy, food supplies and finally water.

In ir book Create, Copy, Disrupt – India’s Intellectual Property Dilemmas, Prashant Reddy T and Sumathi Chandrasakheran have devoted an entire chapter entitled Surrender at Geneva. surrender in question occurred in April 1989 when India succumbed to western pressure on tre-related intellectual property (TRIPS) after pretending it would t budge. Suddenly texts appeared from where and final draft showed that New Delhi h done a complete volte-face from its national position by linking intellectual property and tre. Pharmaceuticals were worst hit by this turnaround and India could secure thing in return, t even a dismissal of Multi-Fibre Arrangement) an international agreement on tre and textiles which was in place from 1974 to 2004 and remained in place even after WTO came into force. A heavy textile exporter, India was among countries most hit.

Geneva-based South Commission (which former Prime Minister Manmohan Singh led from 1987 to 1990) summed it up succinctly when it said, “…In a number of respects outcome of Uruguay Round may vitally affect domestic development and future of countries.”

On 20th September 1986, Uruguay Round of multilateral tre negotiations was launched at seaside town on Punta del Este in Uruguay.* Eighth under auspices of (GATT), this round was billed as most ambitious and complicated of any international tre talks since end of World War 11. It went much beyond facilitating trans border tre in goods and tariffs. 15 items on Uruguay Round’s nda were a mix of tritional and new issues. former consisted of market access and agriculture in particular.

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new issues were where emerging countries like India would be most hit. se were tred in services, and tre-related investment measures (TRIMS) and TRIPS. mould was being recast so as to permanently freeze countries like India at a point in spiral where re was neir going up or down. re were voices of dissent in country, but y were hushed first in New Delhi and later Geneva. In some cases, it seemed as if instructions were coming from India directly to Director General (DG) of WTO bypassing Indian negotiators. India after much drama about how country would never give in did exactly that.

re was worse. While GATT came into being in 1948 as a loose and temporary agreement and remained a provisional treaty for 40 years – a contract between governments acceding to it and t a treaty requiring national ratification - WTO was a new game altoger. It was a single undertaking meaning if a country did t buy almonds from California in US, Washington could impose tre sanctions on country in an unrelated market segment. Retaliation across sectors was born and New Delhi fell between multiple stools. Got thing, was forced to open markets in TRIPS, TRIMS and Services and also face cross-retaliation. According to Chakravarti Raghavan, one of most eminent authorities on international tre wrote in his book Recolanisation – GATT, Uruguay Round, and Third World wrote that Uruguay Round would do to next century ( 21st) what gunboat diplomacy and colonisers did t last (19th) century.

thrust of ir synchronised positions of United States (US), European Union (EU) and Japan were to use negotiations to maintain an international regime to protect foreign capital and techlogy and secure compliance through political pressure. Uruguay round was an attempt t to put clock back, but to remake clock so that developing countries remained constantly behind in curve of ecomic and techlogical progress. Debts were t rescheduled, transfer of techlogy incumbent on a host of factors that impinged on national security, markets were forcibly opened by US and India was often target. t too long ago mangoes from India were banned in EU because of health concerns also called n-tariff barriers (NTB). se carriers can be imposed on many concerns ranging from environment to health.

It was during that time when sentences like thing’s complete till everything is took root. n DG of WTO late Peter Surland said he would bang hes toger if he h to secure a deal in Marrakesh (Morocco) where all of us h shifted or final coming down of gavel. We slept on tables and on floor, drank endless cups of coffee and turned our large pressroom into a home of sorts with each of keeping a look out for or’s stories. When, when, when is all we’d ask Surland whenever we saw him in corridors. You’ll see me dancing on table was his standard answer.

At height of negotiations, a top negotiator told me when two elephants make love, grass below is bound to get crushed. Speaking of which, it is rar important to mention that even as multilateral system is being shaken at its roots. Permanent Five in United Nations (UN) Security Council (US, Russia France, China and doddering United Kingdom) continue to vehemently oppose entry of countries like India, Germany, Brazil etc. to high table. P5 as group is called is in hurry to recast a post World War 11 legacy that has outlived its weight. Even in BRICS re’s Russia and China and latter has been successful in thwarting EU policies through Greece, a country and whose ports it virtually owns.

Much as we rejoice in support from this or that ecomic major, our eyes must be peeled on what India and Indians get. Indian public must be brought into confidence about what is at stake. Geneva Surrender, for example, was a below belt agreement for which Indians are w paying. I do t wish to see India as a country of programmers, assembly line workers and where or countries can dump ir goods. I want to see India as also a major exporter of goods. As markets in developed world mature, growth engines will come from emerging markets. Whoever says growth engines says employment and free tre. India which is potentially democratic world’s largest growing free is where world wants to do business with, but at ir bidding.

Three-piece suits have taken place of gunboats, and only way forward for India is to create jobs and more jobs and compete with best in world however long it takes to get re but as soon as possible. For this to happen, an entire generation of Indians who are used to durbars and dynasties have to make for country to flourish.

*I’ve written about this is detail in my 1997 book 'India Is For Sale' in chapter 'Why Does India Buy Almonds from California'.

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