 Hello and welcome to NewsClick. We are going to today discuss the issue of WTO and Trump's declaration of war, essentially on China. This follows, of course, his earlier declaration regarding tariffs on steel and aluminum. Mr. Jit, we have discussed these issues earlier. Does it appear that in continuation of what we saw as the tariff raising of tariffs on aluminum, steel, etc., which was really unilateral, didn't go through WTO process? I think WTO has not even been notified of this. Now, again, US has taken a unilateral decision against Chinese goods and has decided to sanction them, essentially. This is outside the WTO framework. So what does it really mean for WTO? What does it mean for future trading system in the world? This is a very serious challenge to the global trading system because if the largest economy, the most powerful in this unilateral world, takes a step like this, and I would say a series of steps. We've just taken the second step two days back. Then this doesn't augur well for the multilateral trading system at all, the rules-based system. We are virtually then thrown into a world of lawlessness where no one actually follows any rules. Does everything that suits the political establishment and whatever they want to do with the domestic constituencies and just carry on in that kind of a framework. So I think that we are now stepping into a huge unknown territory, something that we have not seen in the past 70 years. And now the situation is quite different because from what we saw pre-war, in the interwar years, in the depression years, because you have countries which huge stakes in the global economy. The globalization project in the 30s was not as elaborate as we have today. So there are countries which huge stakes in the global economy and if the two largest economies are fighting it out in this manner, and why I'm saying fighting it out because China is not going to take it lying down. So China is going to use this unilateral ways quite surely and it's going to come very soon. And one of the things that the Chinese do very well is currency manipulation. So they have their instruments to counter what Trump has been doing. So we are in a situation where because of these two big elephants fighting out there, there's going to be a lot of collateral damage in the sense that a lot of smaller developing countries could actually get crushed because of this kind of uncertainty. There have been an argument that the WTOs helped the developing countries much less than the developed countries. In fact, the burden of the global trading system has been borne largely by the developing countries and the Doha round which was supposed to address this did not really address this. So why should we as developing countries be worried about the collapse of the trading system if it didn't help us at all? I think it's a question of the relative that we are talking about. It relatively did not help us. I would not say it did not absolutely help us because we still have the dispute resolution mechanism where India did take US and the European Union, some of the larger countries to dispute. Some of the disputes we actually won and we were always hopeful that somewhere down the line we would be able to push the Doha agenda forward and we would be able to get some outcomes which will be more favorable to us in the coming years. It's a different matter that because of the hesitance of even a country like India not really putting his best foot forward, especially after the 2008 downturn that we are in this kind of a mess. So I don't think that we have anyone else to blame but ourselves on a very large extent. What you are arguing is that the demise of the trading system is the worst outcome for everybody and including the developing countries that essentially though the developed countries benefited much more, the developing countries had also seen some benefits and this is now going to actually reduce. Coming back to the issue that you raise about India, it does not appear that India is willing to take this to the multilateral platform. They seem to be seeking a direct dialogue with the United States to resolve for instance a steel and aluminum issue. Similarly, the European Union is also very reluctant to take it to the WTO system itself. They are not willing to take the United States to the WTO system but they seem to resolve it bilaterally. If this happens, wouldn't you argue that Trump's agenda seems to be working? True. I think what Trump has done with the European Union is also offering some sops because Trump ultimately has been advised I think that you can't take the European Union head on. You have to have this broad western coalition otherwise you are going to be in trouble when you are negotiating with maybe North Korea and China or even Russia for that matter and Russia has now become a major threat to the Americans. So I think there is a pattern which is following in terms of giving these concessions. First he gave to Canada and Mexico and now he is talking about, he hasn't actually announced, he is talking about giving some to the European Union. With us he is going to be very different. I do not think he is going to have any feelings for us in sense that we don't fall in his kind of an orbit although we think that we are part of this whole big American set of coalition. I don't think Trump really counts us as one of his allies. What Trump is actually interested in is large markets and this is what he has sold to his constituency that look I'm going to act in a decisive manner so that you get access to large markets and number two wherever I find that countries are maintaining trade surplus vis-à-vis us we are going to clamp down and ensure that there is what he is now called reciprocity in trade. Now that's a you know reciprocity will have to be now redefined you know there's going to be Trumpism that I think we'll have to have all these definitions on reciprocity once again. And no attempt to have a global discussion but defining it as he sees it that means every country has to have trade equality as it were in terms of balances with the United States and of course US balances doesn't really matter because that's not what is addressing and complete unilateral definition of things like reciprocity and so on which have never been a part of the WTO mandate. And of course you know for as long as you can see the global governance structure you know go back in time there have always been a case for non-reciprocity as far as the smaller country is concerned so you have never done this reciprocity thing. What I'm also worried about is the way he's been now using the provisions in the US trade law for instance the latest attack is using the section 301 of the trade act which also puts India the dog. That is right now and we have to see we have to wait for another few weeks to see what kind of an action is there because the report is going to come out in the end of next month. Now the 301 there was a dispute that the EU had brought against the US in the late 90s and there there was a compromise reached you know it was kind of a settlement you know there were no winners and losers where the US was allowed to do the investigation by the WTO but with a very clear guidance that you will not be able to exercise all the provisions of your trade act and get after countries and retaliate. So short of retaliation you can do on all the investigation you can name and shame and do whatever. Now all the administration since then have followed that golden rule. Trump has now crossed that line yeah with China and without really allowing the WTO to adjudicate and find out whether US intellectual property is being you know sort of illegally used in China. He is determined and the report that has been presented to him has determined that there is a 50 billion dollar loss. Now that determination in the WTO system has to be done by the WTO. WTO would actually investigate the dispute process, make a determination of what is the extent of loss and then you know give the country which is suffering or which has actually suffered the loss you know I would say instruments in this case tariffs of equivalent proportion to the loss that has been incurred. So this has to be worked out by an independent authority. Now the US has taken on itself to be the judge you know to to be the investigator to be the judge and ultimately the executive. So this is a fantastic world that we are in and we may think that you know is getting after China and there might be some you know a lot of people who are happy that China is being put in place by the Americans but we shouldn't be because you could be next in line. And if I remember correctly our current economic advisor had advised the US committee I think the congressional committee that we should be put India should be put under sanctions because it was violating under 301 act 301 provisions some of us so called intellectual property that the US has. Is that correct? Precisely in you know there was this investigation done by the US government investigator the US International Trade Commission which had done a thorough review what they call quote unquote of the Indian trade and investment policies where our chief economic advisor is on record of having advised the US government that India is a default and India needs to be challenged in the WTO so the American government should do it as soon as possible. So I don't think that American government is going to take note of the advice that CEA gave that India should be taken to the WTO I think they'll do exactly what they have done with the Chinese they might come with their own unilateral kind of declaration and then and in our case the situation is could be a bit more complicated because the you know apart from patents issue which we all know on the compulsory licensing and all the big chunk of American angst against us is about copyright enforcement. Now enforcement is a very very dangerous area and you know if our government actually sort of yields to American pressure and allow the Americans to ensure that compliance of IP is you know takes place in takes place in a you know in the way the Americans wanted that means a direct interference in the way we govern this country that could be the entry point giving police powers to the Americans within India. Absolutely I didn't want to say that so absolutely they have to enforce the laws yeah and and and so if that happens then you know we are down the slippery slope I don't think many people are recognizing that fear that we are actually we are sitting on a precipice and we need to you know sort of take cognizance of the dangers that are that lie ahead. Thank you very much Mr. Jit for being with us we'll continue to discuss these issues with you and other issues as well. This all the time we have with Newsclick today we will continue to watch what the United States does and what the Indian government's response is on the issue of trade and also look at what the other global players are doing.