 Hello and welcome to NewsClick. Today we have with us Prof. Mishu Jidhar and we are going to discuss what we've already discussed a number of times, the renewed trade war, shall we say the trade war that Mr. Trump has started. President Trump has declared a couple of days back again that a new set of measures should be instituted against the Chinese and the threat is of $500 billion of different kinds of sanctions, increase in taxes and so on. Where is it going? Do you think that we are seeing an intensification of the trade war and this is going to destabilize the global market? Will it lead to actually the United States gaining or is it going to lead to everybody losing? Yeah, let me start by saying that this whole thing started in February of 2018 with Trump announcing that he's going to get after countries who are exporting iron, steel and aluminium and after that many commentators said that this is the way of Trump negotiating with the trading partners because that's what he knows. He knows how to cut deals and he is trying to negotiate and bring the trading partners onto the table to negotiate something. Interest being balance the US external account. That is right. So he's saying that in the US is importing too much and that is the reason why you have the rust belt and the only way to get the rust belt, you know, sort of, you know, get oiled and start running is to stop imports from destroying US markets. But those who thought that this was just a threat of Trump sending out, you know, would actually be sad to hear that yesterday from 6th of July, US has actually started collecting taxes on import taxes, you know, and these are import duties are 25% on 34 billion worth of Chinese imports. So again on the face of it, you know, this is not much because the US imports more than 500 million billion from the US 505 billion in 2017. So this would be roughly about less than about 7%. But what you just said that Trump is now threatening that he is going to impose these punitive tariffs on 500 billion worth of Chinese goods. Now this virtually covering the entire imports that of US from China. And this is absolutely ridiculous because in two counts, one is that, you know, the two largest economies just can't destabilize the global economy in this manner. This is completely outside the WTO tariff boundaries. So what have been set within the WTO bound tariffs and so on? Absolutely. This is unilateral is what we call unilateral action. And this is without any information to WTO, without any notice outside the normal dispute settlement process of WTO. Absolutely. So this is this is not, you know, completely disregarding the WTO, which is the thing that I was just going to come, that Trump has embarked on this very dangerous kind of a thing and on two counts. One is that, you know, there is already China has retaliated immediately. Again, you know, the equivalent amount of US imports, they have retaliated and most of the products that Chinese have, you know, very cleverly identified are actually agricultural commodities. And China has, of course, said that if Trump wants to walk that way, then they will also do that. Similar sentiments have been expressed by the European Union. European Union has also, you know, announced unilateral action should Trump actually get after the European Union. Now, many of these countries are actually going on the unilateral pathway without any reference to the WTO. Now, you know that India has also been targeted, you know, Indian steel and aluminum. What India has done is that India has gone and complained to the WTO or rather sent a notice to the WTO saying that it will impose safeguard duties on 29 products that India is importing from the US. What I find very strange is that India should actually notify under safeguards because safeguard action can only be taken when there is a, you know, flooding of imports of particular commodities and you cannot target a single country under safeguard action. You know, it has to be for a particular product, flooding takes place, imports come in from all the sources. But other countries have retaliated unilaterally as well. Yeah. So, India, you know, has shown a bit of restraint, I would say, but not a very clever one by going and taking an action. They are being soft to the US. They are soft to the US and that's what the point is that, you know, they are telling maybe the signal is that, look, we are taking some action for public consumption. But we are not going to hurt you. It's not going to hurt you. You know what it means. But so, India has not walked that path of unilateral action. If you see our earlier discussions and we have been having these discussions for almost a decade now, we have not been particularly fond of the WTO either. We have said shrink it or sink it. These are the slogans that used to be there. The WTO is a platform of which was imposing a whole lot of intellectual property rights regime on countries which could not pay those monopoly profits or monopoly rent as it were. So, all of these things we have been arguing. So, why should we be unhappy with the, you know, shall we say Trump taking a axe to the WTO and dismantling it if this goes on this way? You know, see, actually for, you know, people, you know, who actually were protesting against the WTO, they actually, some of them actually took this extreme position. But I think at the same time, you know, we were very clear that we are taking this position in order to open up certain bargaining positions in the organization. Now, many of us, I think, you know, you will also agree with me, I am sure, that we have not, we have been actually supporting multilateralism. We do not want the, you know, the rich or the powerful to get their way in the global system and therefore, you know, we actually want us very strong multilateral platform, WTO being one of them, where countries which are like-minded, you know, and that they are the, you know, sort of emerging powers or, you know, the lesser developed countries, they could come together, form coalitions and put the pressure on the big guys. So, what you are saying is, if it is not multilateral, then you have the danger of the rich countries bilaterally bullying the smaller countries and getting, in fact, a far better deal. In fact, this is the route that Mr. Trump took. Absolutely. So, now, you know, you will, again, you will recall that, you know, we had been the WTO, the Doha Development Agenda. You know, the first time in the, from, since the inception of multilateral trading system, the word development was put on a, on a sort of negotiating agenda, an off-trade regime. And India was actually instrumental in getting, you know, Brazil, South Africa and many other African countries together to put this agenda on the table. And we were actually negotiating. We wanted to renegotiate agriculture agreement, which is absolutely against India. The TRIPS agreement, we wanted, you know, sort of carve-outs in the TRIPS agreement. And we also know it for a fact that because of the intransitions of the developed countries, the Doha negotiations have come to a standstill, virtually, at the point of breakdown. Now, here you can see what Trump is doing. Trump is actually trying to put the final nail on the coffin of the WTO. So, shall we say that when multilateralism does not serve the interests of rich countries, in this case, the United States being the key one, then they are willing to abandon multilateralism, which they have been doing with all the bilateral treaties, which have been going on for quite some time. And this, in essence, is going back to the law of the juggles. And that's what now Mr. Trump seems to favor. Absolutely. So, this is what he's trying to do, that he's pushing countries away from the multilateral framework, which is not favorable to the U.S. because there's a, you know, there's a serious threat of ganging up by, you know, the small... He's helping everybody to gang up. That is right. So, what he's now doing is pushing countries away, as you rightly said, away from the multilateral framework to a kind of a bilateral, you know, framework, because, you know, there would be the big companies and mothers who would like free trade to happen. And how do they make that free trade happen? And as you know, that all these trade agreements, the bilateral agreements, are not just about tariffs. These are about things like investment, intellectual property and all those. And these are the things the big companies want. So, you know, you can actually see a very clear agenda that, you know, coming of the together of an agenda of the U.S. administration and the big multinationals taking place in this sort of a grand scale, which has happened all the time. But now, you're now seeing the flowering of that kind of an agenda. Would you say that this kind of agenda may help American big business, but it is not going to help revive the Rust Belt or the American people? Absolutely. Absolutely. You know, it's absolutely impossible, because, you know, the Rust Belt is truly rusted. And if Trump thinks that by shutting imports, that the Rust Belt is just going to move on, it's like switching on, you know, a light bulb. It's not that simple. So, what is going to happen? You know, this whole Trump's protectionism is eventually going to hurt the American consumers the most. Because the American consumers from today onwards are paying 25% more for the imports they'll be, you know, the products they'll be importing from China. And this is not going to revive the American imports. And it's not as if costier imports will turn the focus of the consumers to domestic producers, because domestic producers do not exist. So, eventually, Trump is going to hurt his own base. And the point is, how soon does the base realize that this action by the US president is actually going against the interests of the citizens of the country? Coming back to India, India at this particular point of time when there is a trade war, Trump is isolated globally, at least in trade terms. At this time, India wants to talk about signing a FDA with free trade agreement to the United States. How stupid does that sound? Completely stupid. I think, you know, the worst thing that can happen to India at any point, and at this point in particular, is to sign a free trade agreement with the United States. And why I say it's absolutely stupid at this point for two reasons. One is of course, you know, as I said, Trump is completely isolated. He has absolutely no legitimacy left whatsoever in doing deals globally. So, we are going to be actually providing legitimacy to the US and a country which now has the largest population, and therefore, in eyes of many, potentially the largest market. So, Trump can go around saying, telling the whole world, I have kicked the Chinese out, but now the potentially largest market is now in my hands. Now, you know, if you look at the India-China, India-US relations, you know, at least over the past 30 years, since we started liberalizing, there's only one thing that can be said about the relation, which is that the US at every point has not hesitated even once to get after India. It all started with the attack on intellectual property. You know, you are part of this whole struggle. You know, there was the US trade representative, you know, must take her name, Carla Hills, who said that the markets of the partner countries will be pried open with a crowbar. That was the language. And this was the idea. By the way, our economic advisor to the government who just left, he had also given a note supporting that to the US Congress. Exactly. And then I was absolutely coming to that. And then there's a long history of the US Congress investigating, quote, unquote, India's trade and investment policies, the last of which, actually, the report came out from the United States International Trade Commission in 2014. And this report was based on a whole series of, you know, evidences gathered from a cross-section of people and, of course, Arvind Subramaniam. And Arvind Subramaniam gave this evidence in 2013, saying that India's trade and investment policies actually hurt them, hurt the Americans. And therefore, US should start a dispute against India in the WTO in a forthright manner. So this is the trade policy. You know, I don't have the time to actually go over this. But at each and every one area which has been the focus of the US administration all through the past 30 years is intellectual property rights. So India is a country which, according to the US, is a serious violator of intellectual property. Why? Because we produce genetic medicines. And give its shape to the African and other developing countries. Absolutely. So we are the sort of the pharmacy of the third world. Pharmacy of the global poor. Of the global poor. And therefore, this is something that is depriving the big farmer of the markets in Africa and all, where we have all these stories about how they were exploiting AIDS patients. So given this kind of track record, and then, of course, the other thing that the US has now done, and I think we need to discuss this even more in the context of the MSP increase. In May this year, US had gone to the WTO with a complaint that all of India's form subsidies are in violation of the WTO. It's a minimum support price. Minimum support price, which has happened now. So I'm sure in the coming days, you're going to see action, you know, because the US is selectively using the WTO. Wherever it wants to hurt India, it does. So in intellectual, in the health sector, you have under pressure from the United States. In the food sector, food security and livelihoods in the rural areas, we are under pressure from the WTO. And of course, there are other areas too, in the manufacturing and all, whatever little US has left of the manufacturing, they want to exploit the market in India. So under these circumstances, I find it absolutely astonishing that there are these quote unquote, advices of the government who say that this is the opportune moment to jump into the fire and to get burned by doing a FTA with the United States. So even if there is an argument for a FTA with the United States, which probably never was, because it would have been completely one-sided, US today is not a country which is manufacturing goods. It's trying to extract a rent in terms of intellectual property. That's really its basic mode of subsistence today. And of course, printing the dollar. That FTA was never a good idea with the United States. But in today's terms, when there is a trade war and there is, as we discussed, a relative isolation in the United States, we are seen to be publicly siding with the wrong side. You are absolutely correct that doing an FTA with the United States was would have been disastrous under any circumstance. US, India should not think of doing a trade deal, a free trade deal with the US, which has always been trying to exploit India in one way or the other. And this is the history that goes long back. We can look at the thing of the PL 480 and the V Team ports and all that. So this whole history of India-US relations, both in economic terms and the political terms, has been fraught with all kinds of problems. So how can any government in India think of doing a trade deal with a country which has always been wanting to exploit India's markets in a very unfair manner? And absolutely, you're absolutely correct that this is the last thing that we should do now, even think of doing a trade deal with the US. Thank you very much, Vishu Jit. This is all the time we have today. Please do keep watching, do click and also visit our website and our YouTube page.