The TPP and RCEP: Grand trade schemes are victims of US and Indian protectionist policies

In the wake of the withdrawal by India from the Regional Comprehensive Economic Partnership (RCEP), AURIOL WEIGOLD provides a timely

Analysis Of The Implications For

multilateral trade agreements such as RCEP and the Trans-Pacific Partnership (TPP) of the growing tendency towards protectionism in both New Delhi and Washington.

Background

The Trans-Pacific Partnership (TPP) was the central piece of President Barack Obama’s strategic pivot to Asia and was to become a multinational trade agreement between 12 countries, covering 40 per cent of the global economy, and which also served to blunt China’s economic assertiveness by keeping that country out of the agreement.

In withdrawing the United States from the TPP, President Trump argued that the agreement would be harmful to American manufacturing and, consequently, would result in reduced employment, lower wages for local workers and increased inequality.

The remaining TPP countries responded by developing a new agreement, the Comprehensive and Progressive TransPacific Partnership (CPTPP), effective a year ago but commanding a much smaller share of the global market while keeping most of the original TPP provisions in place.

In November 2012, however, negotiations were launched at the ASEAN Summit in Cambodia for a Regional Comprehensive Economic Partnership (RCEP), framed as Asia’s commitment to free trade, with sixteen prospective signatories, including India and China, but not the US (member states of both the CPTPP and RCEP can be seen online).

The RCEP was expected to be signed by all participating countries at the ASEAN summit meeting in Thailand on 3-4 November 2019, but India withdrew, arguing that the trade deal did not provide it with adequate protection against surges in imports –essentially targeting China, with which India has a massive trade deficit. New Delhi claimed that unsustainable trade deficits need to be addressed, but also that it has ‘long pushed for other countries to allow greater movement of labour and services’ if it opened up its own market. Modi’s argument for at least temporarily remaining outside RCEP is protective, and thus not dissimilar to Trump’s reasons for walking away from the TPP.

The crux of the US and Indian leaders’ arguments for withdrawing support is domestic economic policy, expressed succinctly by their respective campaign slogans, respectively “Make America Great Again” and “Make in India”.

Comment

Protectionist policies are the imposition of restrictions, such as tariffs on imports, ostensibly to protect that country’s industries, with the countries affected by the higher tariffs almost invariably responding in kind with levies or increased tariffs of their own.

Trump has put in place steep tariffs on many goods from Canada, the European Union, Mexico and, most visibly damaging, from China.

India, too, claims unsatisfactory terms in relation to its trade with China. Its stated concern is that China would “flood” its market with cheap imports, and that it does not have adequate protection against such “surges”. India has so far unsuccessfully sought an “auto-trigger” mechanism that would allow it to raise tariffs in instances where imports cross a pre-determined threshold. India’s protectionism may be compared to Trump’s US, where a lack of local jobs has also been characterised as, if not a fear of China, at least a result of unequal trading terms and other issues.

India has pushed for other countries to allow greater transfer of labour and services, in return for opening up its own market, in areas where Indian businesses can benefit. It also has issues about its trade deficits associated with its bilateral free trade agreements already in place with states that are part of RCEP.

RCEP has been described as less ambitious that the CPTPP, an aim is to lower tariffs between member countries. India’s desire to be cut some slack is, for the present at least, outside that frame.

The US-India “trade war” may be seen as a case study of an economic imbroglio between countries that are committed to nationalism rather than multilateralism, and thus halts or limits global or Asian trade schemes as those envisaged above.

In its latest report on global trade barriers, the 2019 National Trade Estimate Report, the US Trade Department singled out India as having the highest tariffs ‘of any major world economy’ – 13.8% – under its Most Favoured Nation (MFN) tariff rate (Report, p.235). The report also states that India’s tariff regime is favourably affected by disparities between the World Trade Organisation’s bound tariff rates on, for example, agricultural products, which can be extraordinarily high (Report, p.236).

The Report also described Indian trade policy as opaque and unpredictable, often leaving US firms overwhelmed by red tape and paperwork. India is one of the world’s main outsourcing destinations, with many of its workers engaged in IT systems such as call centres and software development in India, while supplying highly-skilled workers to the US, primarily in the IT industry, utilising a preferential visa system that the US seeks to restrict. Arguably retaliating under the US Generalized Scheme of Preferences programme, a trade preference scheme for designated developing countries under which more than a thousand products may enter the US duty-free, Trump announced in mid-2019 that he had terminated India’s entitlement after “determining” that New Delhi had not assured the US that it would provide Washington with “equitable and reasonable access” to its markets.

In a concluding assessment, Modi’s Bharatiya Janata Party promised in both his 2014 and 2019 election campaigns to make India the world’s third largest economy by 2030, encouraging investors to “Make in India”: a promotion to build his country’s manufacturing capacity, taking advantage of a massive workforce and low rates of pay. It is a not dissimilar aim to President Trump’s election slogan of “Make America Great Again”, achieved in part by restricting imports from other countries to protect or increase job opportunities, or by imposing tariffs on imported goods, as noted above.

Also accused of retaliation by the US, India has announced its intention to raise tariffs on a variety of products from the US, and impose tariffs on formerly duty-free items, following the US refusal to exempt India from higher steel and aluminium tariffs. A trade war between the two is under way and, arguably, could be a pattern repeated between countries in the watereddown CPTPP, as well as within RCEP.

Dr Auriol Weigold is Senior Visiting Fellow at the Perth-based Future Directions International. This article first appeared on www.futuredirections.org.au

Cyclone Bulbul: Seven dead, 2.97 lakh affected in Bengal

Severe Cyclone Bulbul has left behind a trail of destruction in West Bengal, taking seven lives in three districts, affecting 2.97 lakh people and damaging over 28,000 houses, senior ministers said in early November. The storm also uprooted hundreds of trees and affected power supply in the state.

Five deaths were reported from Basirhat sub-division in North 24 Parganas district, while South 24 Parganas and East Midnapore districts recorded one death each in the storm which crossed the Bengal coast close to Sundarban Dhanchi forest between 8.30 p.m. and 11.30 p.m. on 9 Nov.

Disaster Management Minister Javed Khan said 2.97 lakh people were affected, while 1.78 lakh persons were sheltered in 471 relief camps.

“The storm fully damaged 2,473 houses. 206 houses suffered severe damages, while the number of partially damaged houses is 26, 000,” Khan told media persons.

State Food and Supplies Minister Jyotipriyo Mullick said that in the worst-hit Basirhat sub-division alone, 3,100 houses suffered damage. Mullick, who toured the Bulbul-hit areas in Basirhat, said the condition of Sandeshkhali was “very bad”.

“There has been massive damage to agricultural land. We have to meet the crisis on a war footing,” he said.

Six teams of National Disaster Response Force and four State Disaster Response Force teams alongside 15,000 volunteers were carrying out relief and rescue operations in the affected areas, Khan said. So far, 46,000 tarpaulin sheets have been distributed, and 373 group kitchens were operating.

Prime Minister Modi has assured West Bengal Chief Minister Mamata Banerjee of all possible assistance from the Central government.

Banerjee, who led from the front by stationing herself in the special control room set up at the secretariat Nabanna, took an aerial survey of the cyclone Bulbul hit areas around Namkhanaand Bakkhali in South 24 Parganas district and reviewed relief and rehabilitation measures in Kakdwip with the district administration.

Ayodhya, post-verdict: Expedited plan and alternative land

Within 2 days of the Ayodhya verdict, Centre has started the process to set up a trust that will oversee the construction of a Ram temple in Ayodhya, as mandated by the Supreme Court in its ruling on the title suit. Top officials from the Ministries of Home and Finance will be part of deciding on the constitution of the trust and its rules.

According to sources, the government is studying the apex court judgement on Ayodhya, and a team of bureaucrats is studying the technicalities and nuances of the verdict.

"The opinions of the Law Ministry and the Attorney General will be taken on how to set up the trust," a senior officer said.

In its landmark ruling on 9 Nov 2019, the Supreme Court had unanimously ruled that the disputed 2.77 acres of land would be awarded to the deity Ram Lalla for building a temple. The bench, headed by Chief Justice Ranjan Gogoi, gave the government three months to set up a trust for the same. The Muslim side was given a 5-acre plot at a

"prominent site" for building a mosque.

The Supreme Court-awarded five-acre land to the Muslims in the Ram janma bhoomi title dispute case is not available in the Ayodhya town, administrative sources said, adding that the land may be allotted at some other location, such as across the river Saryu where the Uttar Pradesh government plans to develop a township, or at Muslimdominated Shahenwan village, about 5km from the temple town.

The Sunni Waqf Board, one of the litigants in the Ayodhya title dispute case, has said that a final decision on accepting the offer of the plot will be taken later. Shahenwan village has a mausoleum ('mazaar') believed to be of Mir Baaqi, the general of Mughal emperor Babar, who built the Babri Masjid in the 15th century.

Before the verdict came in, prominent Muslim community leaders were under the impression that if they lost the case, they would be given land in the acquired area on the basis of provisions in the Ayodhya Act 1993, facilitating acquisition of 67.7 acres in and around the disputed site where the Babri Masjid stood till 6 Dec 1992. The Central Government had done so in order to check communal tension.

Meanwhile, the Uttar Pradesh government has started the process to identify the alternative sites in and around Ayodhya for the proposed site of the mosque. An officer on the condition of anonymity said, "We have been asked to find the land for mosque at a prominent place."

Deep in red: Sept industrial output shrinks 4.3%

Contraction in manufacturing and mining activity and subdued demand dragged India's September factory output deep into the red.

The Index of Industrial Production (IIP) declined (-)4.3 per cent in September from (-)1.40 per cent in August 2019.

On a year-on-year basis, the growth rate of factory output during the month under review was lower than the 4.6 per cent recorded during September 2018.

"The Quick Estimates of IIP with base 2011-12 for the month of September 2019 stands at 123.3, which is 4.3 per cent lower as compared to the level in the month of September 2018," the Ministry of Statistics &Programme Implementation said.

"The cumulative growth for the period April-September 2019 over the corresponding period of the previous year stands at 1.3 per cent," it added.

As per the data, the output rate of the manufacturing sector contracted by (-)3.9per cent in September from a YoY rise of 4.8 per cent.

Similarly, other notable sectors such as mining and electricity saw a decline in production.

According to the data, mining activity declined by 8.5 per cent from a flat growth of 0.1 per cent and the sub-index of electricity generation was lower by (-)2.6 per cent from 8.2 per cent.

According to ICRA's Principal Economist Aditi Nayar, "The industrial performance in September stood out as the worst YoY performance in the current series. Moreover, the lead indicators point to a continued weakness in October, which, coupled with an unfavourable base effect, may well result in a further deterioration in the just-concluded month."

India Ratings & Research's Chief

Economist Devendra Kumar Pant said, "This is the first time after November 2012 that all three broad based sectors have contracted and it is the lowest monthly growth in the 2011-12 base year. In the old base year (2004-05), IIP in October 2011 contracted by 5 per cent. On quarterly basis, Q2 FY20 IIP contracted by 0.4 per cent, the lowest quarterly in 2011-12 base... IIP has been very volatile and the small momentum of couple of months fizzles out soon. The Indian economy is presently facing a structural growth slowdown originating from declining household savings rate and low agricultural growth."

Emkay Wealth Management's Head of Currency Rahul Gupta said, "The persistent slowdown in industrial growth may force the RBI to go for another round of policy rate cut. However, a possible rise of headline inflation above the medium term target of RBI (4 per cent) may act as a point of caution before the RBI goes for a rate cut."

Brickwork Ratings Chief Economic Advisor M. Govinda Rao said, "The decline in the IIP for the month of September does not come as a surprise. This calls for immediate intervention by the government. Specifically, the time is opportune for the government to increase public spending financed by actively pursued strategic disinvestment."

Reverse gear: Festive season fails to revive automobile sales

Despite the expected traditional hike in sales during the festive season, the slump in the domestic automobile sector continued unabated in October with the overall sectoral off-take plunging 12.76 per cent to 2,176,136 units sold (as per Society of Indian Automobile Manufacturers, SIAM).

Reasons such as low rural demand along with a slowdown in economic activity have been cited for the de-growth. SIAM President Rajan Wadhera told reporters that healthy PV retail sales have been reported and that the coming months of NovemberDecember are expected to be better than the corresponding period of last year. Also, the current figures are only wholesale numbers and not retail data.

Speaking factually, here’s what the numbers look like:

Passenger’s cars' sales de-grew by 6.34 per cent to 173,649 units. Utility vehicle sales grew by 22.22 per cent to 100,725 units, whereas vans' off-take went down by 35.08 per cent to 10,653 units against that in the same month a year ago. The sale of three-wheelers in September declined by 3.60 per cent to 66,985 units. In the case of two-wheelers, which include scooters, motorcycles and mopeds, the sale edged lower by 14.43 per cent to 1,757,264 units. However, exports across categories were higher by 2.72 per cent at 395,964 units.

The sales decline has also dented production levels, causing job losses. The domestic passenger car production has fallen by 30.22per cent to 162,343 units from 232,649 units.

Operation Maa: Indian Army’s motherly tactic to save youth from terrorism

The Indian Army has weaned away nearly 60 local youth of Jammu and Kashmir, who had been recruited by Pakistan-backed terror outfits, through a targeted program undertaken over the past eight months.

The program 'Operation Maa' was launched by Chinar Corps (15 Corps) of the Indian Army in Jammu and Kashmir in February this year, soon after Lieutenant General K.J.S. Dhillon was appointed its commander.

"The basic objective behind the program is to ensure that youth indoctrinated into militancy by Pakistan-backed terror groups are brought back into the fold of mainstream society. The program has been designed to help rehabilitate only the local youth of the Valley who have chosen the path of militancy," a senior Army officer told IANS.

Explaining the modus operandi of the program, the Army officer told IANS that local youth recruited by terror groups were contacted through their 'mothers'.

"Though the Army had been appealing to misguided youth in the Valley in the past too, the operation launched this year is specifically targeted through their mothers. Also, the new program is further focused at convincing the youth that there will be no consequences pursuant to their abandoning of terror groups," the officer added.

The Army is also working towards bringing back the 'fringe elements' in the Valley into the mainstream. The 'fringe elements' have been identified as youth in the age group of 21 to 24 years who do not join terror groups per se but are involved in anti-social activities such as stone pelting or issuing threats upon civilians.

"Recruitment drives are being conducted by the Army regularly targeting youth in the age group of 21 to 24 years," added the official.

ISKCON’s food charity to feed 20,000 childrenin Karnataka’s Mandya district

ISKCON's (International Society for Krishna Consciousness) Akshaya Patra Foundation opened a massive kitchen in Karnataka's Mandya to feed a whopping 20,000 children at state-run schools in Mandya and Mysuru districts under the midday meals scheme.

"The hi-tech kitchen will serve freshly cooked, nutritious and tasty mid-day meals to about 20,000 students six days a week in government schools across Mandya and Mysuru districts," said Foundation chairman Madhu Pandit Dasa on the occasion.

Lauding the Foundation for serving mid-day meals to 18lakh children in their schools across the country every week, the multilingual south Indian actress-turnedlawmaker said thousands of students would get nutritious food prepared hygienically.

Besides students in state-run schools, the Foundation will feed about 600 wards of Anandalwar High School at Mahadevapura in the district 6 days a week.

The kitchen also provides jobs to hundreds of locals for being a part of its supply chain from cooking to serving girls and boys in schools across the two districts.

"Mid-day meals act as a stimulus for children to go to school and continue education. It has been our endeavour to reach and serve more children," Dasa told the gathering, including students, teachers and parents.

The centralised and partly mechanised kitchen has the capacity to prepare 20,000 meals at a time. The facility is equipped with a roti-making machine, cold storage, an effluent treatment plant for wastewater treatment and a blender for rice fortification.

Adhering to the practice of serving food in accordance to the local palate, hot bisibele bath, rice, sambar, upma, payasam, kesari bath, vegetable khootu (sabji), curd, kharapongal and cornflakes will be served to the students in a cyclic manner.

The city-based not-for-profit Foundation is one of the registered organisations which has been implementing the state-run scheme since 2000, leveraging technology to feed 18 lakh children in 16,856 schools across 12 states and two Union Territories in the country in partnership with the central and state governments through the year.

Young women cab-drivers challenge stereotypes on Delhi roads

On Indian roads, where women’s safety remains a burning concern, few women dare to take up driving as a profession.

Though women-run pink cabs by branded hail-a-taxi services intend to change the lopsided scenario, most of their cab drivers are still middle-aged women.

The number of young women cab drivers is still few and far between as fear of safety, family disapproval, peer pressure by male colleagues, and non-acceptance from customers make the going difficult for them from the start.

Aanchal Chauhan has been working as a driver for six years. The 26-year-old says she had picked up driving as a hobby and her family owned a car. “But my family was baffled when I told them that I wanted to drive a cab. I got my driving licence and then found myself a job as a driver,” said Chauhan.

However, instead of appreciating their daughter’s passion, Chauhan’s family would ridicule her for her choice of profession. “Earlier when I used to return home after completing my shift, my mother and brother used to taunt me saying ‘see here comes the driver’. They would also hide my profession from our friends and relatives,” she told IANS life.

Rinky Singh, another young woman driver with Uber, is pursuing graduation in Political Science and History from IGNOU and faced a similar ordeal. “As the only child of a Rajput family in which family honour is held high, my parents wanted me to stay at home and focus on my studies. But I always wanted to do something different. So I got myself trained, got a driving licence and started working as a driver without telling my family about it,” said Singh.

According to the two girls, clients also tend to discourage women cab drivers citing security concerns. “We the people make a profession good or bad. I’ve taken up driving professionally not to make a statement but it will help if it can change existing notions,” said Chauhan.

Singh says she faced verbal abuse from one of her clients for being a woman. But she turned back and gave a befitting reply.

A resident of Rohini, Chauhan drives for 8-10 hours a day on weekdays and manages to earn Rs 10,000-12,000 a week. “Driving is a job that pays according to the work you do, unlike other jobs. It makes me really proud to say that I’m an independent individual. I don’t have to depend on anybody,” she said.

But why did she choose to be a cab driver? “No other job can match the freedom and convenience that driving a cab gives,” she added.

First Sikh Football Cup to mark 550th Prakash Purb

To promote the Punjabi Sikh identity globally, non-profit organisation Khalsa Football Club in association with the Global Sikh Sports Federation is organising first Sikh Football Cup, 2019 in Punjab.

Dedicated to the 550th Prakash Purb (birth anniversary) of Guru Nanak Sahib, the tournament will be held from 23 November to7 December under FIFA rules.

"Our prime motive is to encourage the Punjabi youth to engage in sports as 'keshadhari' (unshorn hair and beard) players," club president Harjeet Singh Grewal told IANS.

He said the Khalsa Football Club team would play matches with prominent teams in India as well as football clubs in different countries. The club, affiliated with the Punjab Football Association, would act as launching pad for promising players to enter contracts with top ranked Indian as well as European football clubs, he said.

Also, the unique 'keshadhari' event would help promoting Punjabi culture and Sikh identity worldwide and weaning away the youth from drug abuse.

Marengo sachintendulkar: Fan names newly discovered spider species after Tendulkar

Arguably one of the greatest cricketers of all times, Sachin Tendulkar's name is rarely ever out of the spotlight. Six years have gone past since the batting great played his last Test match in front of a Wankhede stadium that was packed to the rafters but Tendulkar remains one of the biggest names in Indian cricket.

In what has to be one of the most unique ways to pay tribute to the master blaster, a research scholar pursuing a PhD in spider taxonomy decided to rename one of two newly discovered species after Tendulkar.

"I named (one spider) Marengo sachintendulkar because Sachin happens to be my favourite cricketer," Dhruv Prajapati as by The Times of India. "Another name is inspired by Saint Kuriakose Elias Chavara who was a crusader in creating awareness about education in Kerala."

Prajapati is a junior researcher with the Gujarat Ecological Education & Research (GEER) Foundation.

IANS