Indian Prime Ministerand Chinese Presidentmight have had a successful Sino-Indian summit at Mamallapuram in Tamil Nadu during 11-12 October.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]
However, when it comes to protecting trade interests, the government has adopted a tough stand, especially in reaching an agreement on the Regional Comprehensive Economic Partnership (RCEP).
RCEP is the government’s most ambitious trade agreement planned to date. The agreement is based on its existing free-trade agreements (FTAs) with the 10-nation Association of Southeast Asian Nations (ASEAN) and five other nations.
The pact will include China, Japan, South Korea, Australia and New Zealand, with which ASEAN has trade agreements.
Japanese wire agency Kyodo quoted an unnamed Singapore official as saying that India “almost banged the table” during the negotiations. Thailand termed the ministerial meeting as “tough and serious”, and that the agreement was inconclusive due to India’s tough stand that stalled the negotiations.
What was the stand taken by India that stalled the talks? India insisted that it wants a safety valve or a process to safeguard its interests against at least 50 per cent of Chinese imports under RCEP if they flood the Indian market.
New Delhi also expressed its concern over issues such as e-commerce, investments, taxations, small and medium enterprises (SMEs), and regulations fixed by local bodies. It sought that the framework on these be reworked before it can sign the deal.
India contends that its taxation policy changes shouldn’t be questioned, while its obligations towards its SMEs should be allowed to be met. It has demanded more favourable investment rules, wanted its local bodies’ norms to be respected and asked Japan to address its concerns on e-commerce.
India faces a real dilemma with regard to the RCEP deal. On the one hand, it doesn’t want to miss out on an opportunity to be part of a large trading bloc. Trade among the bloc is worth around $2.8 trillion annually.
On the other hand, the fear in signing the deal is that it could trigger a deluge of imported Chinese goods — like electrical and electronic goods — in its domestic market.
India’s trade deficit with China, the largest exporter among the bloc to India, is $54 billion, more than half of the total $105 billion trade deficit with the bloc of nations that form the group.
India’s problems do not end with the threat of Chinese imports. The agriculture sector, particularly dairy and plantation industry, is worried that imports of dairy products, rubber, cardamom, pepper, and other spices could affect them adversely.
These products will likely come from New Zealand, Malaysia, Vietnam and Australia.
For example, India currently imposes a 64 per cent duty on import of dairy products. If it signs the RCEP agreement, the duty will have to slowly be reduced to zero, most probably over a 20-year period.
This could affect the Indian dairy farmers, who number over 100 million compared to 10,000 farmers in New Zealand. Thanks to its vibrant domestic market, India exports only a fraction of its milk products from 180 million tonnes (mt) it produces annually.
In comparison, New Zealand ships out over 90 per cent of the 22 mt it produces. Also, Indian farmers get 70 per cent of the milk price as their returns, while it is 30 per cent in New Zealand.
The manufacturing industry — especially metals like iron, steel, and aluminium — also fears it could be affected by the RCEP deal.
Trade observers say India’s exports to the countries that are part of the RCEP pact are only 20 per cent of its total shipments abroad, while imports from these nations make up 35 per cent of the consignments that arrive at the ports.
Those opposed to the deal also point at various FTAs that India has signed with countries such as Sri Lanka and Japan, and Malaysia and Singapore that are part of ASEAN.
According to a 2017 Niti Aayog report, exports from India are lower than imports from partnering countries with whom it has signed the FTAs. Indian exporters, too, are not taking full advantage of the agreements, thus resulting in New Delhi losing out.
China is the one that is pushing India to sign the RCEP agreement. The issue figured at the Mamallapuram summit and the Chinese premier reportedly assured India that its concerns would be addressed.
Commerce Ministry officials are of the view that one way of checking the deluge of Chinese goods is to have an auto-trigger mechanism to alert them for some of the imported products. Once an imported product crossed a pre-determined threshold, the mechanism is triggered, and India would begin imposing duties on these products.
The RCEP deal will allow importing of 74 per cent Chinese products duty-free but developing nations are pressing for allowing 90 per cent of their products to be duty-free.
India also says the trigger mechanism would cover over 65 per cent of the Chinese products, but China, predictably, is not in favour of such a triggering mechanism for so many of its products.
And trade experts say that the connectivity between Indian ports isn’t good enough to set off the alerts effectively.
There is, however, one agreement among the bloc: the pact will result in 28 per cent of the traded goods being made duty-free in the first phase. In the second phase, 35 per cent of all products will be free of any import levy.
India believes its professionals in the Information Technology field, medical personnel, and chartered accountants would stand to gain from the deal and hence, it would be good to sign it.
Despite pressure from China, India is insisting on a balanced and equitable deal. With India standing firm in protecting its interests, the bloc of nations looking to sign the deal has two options before them.
One, they can sign a limited deal with India that will protect everyone’s interests. Or two, they can try and address all of India’s concerns in a fair way and then sign the pact.
Recent Posts
The United Nations has shaped so much of global co-operation and regulation that we wouldn’t recognise our world today without the UN’s pervasive role in it. So many small details of our lives – such as postage and copyright laws – are subject to international co-operation nurtured by the UN.
In its 75th year, however, the UN is in a difficult moment as the world faces climate crisis, a global pandemic, great power competition, trade wars, economic depression and a wider breakdown in international co-operation.
Still, the UN has faced tough times before – over many decades during the Cold War, the Security Council was crippled by deep tensions between the US and the Soviet Union. The UN is not as sidelined or divided today as it was then. However, as the relationship between China and the US sours, the achievements of global co-operation are being eroded.
The way in which people speak about the UN often implies a level of coherence and bureaucratic independence that the UN rarely possesses. A failure of the UN is normally better understood as a failure of international co-operation.
We see this recently in the UN’s inability to deal with crises from the ethnic cleansing of the Rohingya Muslims in Myanmar, to civil conflict in Syria, and the failure of the Security Council to adopt a COVID-19 resolution calling for ceasefires in conflict zones and a co-operative international response to the pandemic.
The UN administration is not primarily to blame for these failures; rather, the problem is the great powers – in the case of COVID-19, China and the US – refusing to co-operate.
Where states fail to agree, the UN is powerless to act.
Marking the 75th anniversary of the official formation of the UN, when 50 founding nations signed the UN Charter on June 26, 1945, we look at some of its key triumphs and resounding failures.
Five successes
1. Peacekeeping
The United Nations was created with the goal of being a collective security organisation. The UN Charter establishes that the use of force is only lawful either in self-defence or if authorised by the UN Security Council. The Security Council’s five permanent members, being China, US, UK, Russia and France, can veto any such resolution.
The UN’s consistent role in seeking to manage conflict is one of its greatest successes.
A key component of this role is peacekeeping. The UN under its second secretary-general, the Swedish statesman Dag Hammarskjöld – who was posthumously awarded the Nobel Peace prize after he died in a suspicious plane crash – created the concept of peacekeeping. Hammarskjöld was responding to the 1956 Suez Crisis, in which the US opposed the invasion of Egypt by its allies Israel, France and the UK.
UN peacekeeping missions involve the use of impartial and armed UN forces, drawn from member states, to stabilise fragile situations. “The essence of peacekeeping is the use of soldiers as a catalyst for peace rather than as the instruments of war,” said then UN Secretary-General Javier Pérez de Cuéllar, when the forces won the 1988 Nobel Peace Prize following missions in conflict zones in the Middle East, Africa, Asia, Central America and Europe.
However, peacekeeping also counts among the UN’s major failures.
2. Law of the Sea
Negotiated between 1973 and 1982, the UN Convention on the Law of the Sea (UNCLOS) set up the current international law of the seas. It defines states’ rights and creates concepts such as exclusive economic zones, as well as procedures for the settling of disputes, new arrangements for governing deep sea bed mining, and importantly, new provisions for the protection of marine resources and ocean conservation.
Mostly, countries have abided by the convention. There are various disputes that China has over the East and South China Seas which present a conflict between power and law, in that although UNCLOS creates mechanisms for resolving disputes, a powerful state isn’t necessarily going to submit to those mechanisms.
Secondly, on the conservation front, although UNCLOS is a huge step forward, it has failed to adequately protect oceans that are outside any state’s control. Ocean ecosystems have been dramatically transformed through overfishing. This is an ecological catastrophe that UNCLOS has slowed, but failed to address comprehensively.
3. Decolonisation
The idea of racial equality and of a people’s right to self-determination was discussed in the wake of World War I and rejected. After World War II, however, those principles were endorsed within the UN system, and the Trusteeship Council, which monitored the process of decolonisation, was one of the initial bodies of the UN.
Although many national independence movements only won liberation through bloody conflicts, the UN has overseen a process of decolonisation that has transformed international politics. In 1945, around one third of the world’s population lived under colonial rule. Today, there are less than 2 million people living in colonies.
When it comes to the world’s First Nations, however, the UN generally has done little to address their concerns, aside from the non-binding UN Declaration on the Rights of Indigenous Peoples of 2007.
4. Human rights
The Human Rights Declaration of 1948 for the first time set out fundamental human rights to be universally protected, recognising that the “inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world”.
Since 1948, 10 human rights treaties have been adopted – including conventions on the rights of children and migrant workers, and against torture and discrimination based on gender and race – each monitored by its own committee of independent experts.
The language of human rights has created a new framework for thinking about the relationship between the individual, the state and the international system. Although some people would prefer that political movements focus on ‘liberation’ rather than ‘rights’, the idea of human rights has made the individual person a focus of national and international attention.
5. Free trade
Depending on your politics, you might view the World Trade Organisation as a huge success, or a huge failure.
The WTO creates a near-binding system of international trade law with a clear and efficient dispute resolution process.
The majority Australian consensus is that the WTO is a success because it has been good for Australian famers especially, through its winding back of subsidies and tariffs.
However, the WTO enabled an era of globalisation which is now politically controversial.
Recently, the US has sought to disrupt the system. In addition to the trade war with China, the Trump Administration has also refused to appoint tribunal members to the WTO’s Appellate Body, so it has crippled the dispute resolution process. Of course, the Trump Administration is not the first to take issue with China’s trade strategies, which include subsidises for ‘State Owned Enterprises’ and demands that foreign firms transfer intellectual property in exchange for market access.
The existence of the UN has created a forum where nations can discuss new problems, and climate change is one of them. The Intergovernmental Panel on Climate Change (IPCC) was set up in 1988 to assess climate science and provide policymakers with assessments and options. In 1992, the UN Framework Convention on Climate Change created a permanent forum for negotiations.
However, despite an international scientific body in the IPCC, and 165 signatory nations to the climate treaty, global greenhouse gas emissions have continued to increase.
Under the Paris Agreement, even if every country meets its greenhouse gas emission targets we are still on track for ‘dangerous warming’. Yet, no major country is even on track to meet its targets; while emissions will probably decline this year as a result of COVID-19, atmospheric concentrations of greenhouse gases will still increase.
This illustrates a core conundrum of the UN in that it opens the possibility of global cooperation, but is unable to constrain states from pursuing their narrowly conceived self-interests. Deep co-operation remains challenging.
Five failures of the UN
1. Peacekeeping
During the Bosnian War, Dutch peacekeeping forces stationed in the town of Srebrenica, declared a ‘safe area’ by the UN in 1993, failed in 1995 to stop the massacre of more than 8000 Muslim men and boys by Bosnian Serb forces. This is one of the most widely discussed examples of the failures of international peacekeeping operations.
On the massacre’s 10th anniversary, then UN Secretary General Kofi Annan wrote that the UN had “made serious errors of judgement, rooted in a philosophy of impartiality”, contributing to a mass murder that would “haunt our history forever”.
If you look at some of the other infamous failures of peacekeeping missions – in places such as Rwanda, Somalia and Angola – it is the limited powers given to peacekeeping operations that have resulted in those failures.
2. The invasion of Iraq
The invasion of Iraq by the US in 2003, which was unlawful and without Security Council authorisation, reflects the fact that the UN is has very limited capacity to constrain the actions of great powers.
The Security Council designers created the veto power so that any of the five permanent members could reject a Council resolution, so in that way it is programmed to fail when a great power really wants to do something that the international community generally condemns.
In the case of the Iraq invasion, the US didn’t veto a resolution, but rather sought authorisation that it did not get. The UN, if you go by the idea of collective security, should have responded by defending Iraq against this unlawful use of force.
The invasion proved a humanitarian disaster with the loss of more than 400,000 lives, and many believe that it led to the emergence of the terrorist Islamic State.
3. Refugee crises
The UN brokered the 1951 Refugee Convention to address the plight of people displaced in Europe due to World War II; years later, the 1967 Protocol removed time and geographical restrictions so that the Convention can now apply universally (although many countries in Asia have refused to sign it, owing in part to its Eurocentric origins).
Despite these treaties, and the work of the UN High Commission for Refugees, there is somewhere between 30 and 40 million refugees, many of them, such as many Palestinians, living for decades outside their homelands. This is in addition to more than 40 million people displaced within their own countries.
While for a long time refugee numbers were reducing, in recent years, particularly driven by the Syrian conflict, there have been increases in the number of people being displaced.
During the COVID-19 crisis, boatloads of Rohingya refugees were turned away by port after port. This tragedy has echoes of pre-World War II when ships of Jewish refugees fleeing Nazi Germany were refused entry by multiple countries.
And as a catastrophe of a different kind looms, there is no international framework in place for responding to people who will be displaced by rising seas and other effects of climate change.
4. Conflicts without end
Across the world, there is a shopping list of unresolved civil conflicts and disputed territories.
Palestine and Kashmir are two of the longest-running failures of the UN to resolve disputed lands. More recent, ongoing conflicts include the civil wars in Syria and Yemen.
The common denominator of unresolved conflicts is either division among the great powers, or a lack of international interest due to the geopolitical stakes not being sufficiently high. For instance, the inaction during the Rwandan civil war in the 1990s was not due to a division among great powers, but rather a lack of political will to engage.
In Syria, by contrast, Russia and the US have opposing interests and back opposing sides: Russia backs the government of the Syrian dictator Bashar al-Assad, whereas the US does not.
5. Acting like it’s 1945
The UN is increasingly out of step with the reality of geopolitics today.
The permanent members of the Security Council reflect the division of power internationally at the end of World War II. The continuing exclusion of Germany, Japan, and rising powers such as India and Indonesia, reflects the failure to reflect the changing balance of power.
Also, bodies such as the IMF and the World Bank, which are part of the UN system, continue to be dominated by the West. In response, China has created potential rival institutions such as the Asian Infrastructure Investment Bank.
Western domination of UN institutions undermines their credibility. However, a more fundamental problem is that institutions designed in 1945 are a poor fit with the systemic global challenges – of which climate change is foremost – that we face today.