When the trade war tightens its griptext_fields
Making international trade independent and transparent as much as possible is one of the fundamental goals enshrined in the Constitution of World Trade Organisation (WTO).
The world powers are all set for an open war by totally sidelining this stance and even the organization. The global media dubs it as trade war. The ripples of the war initiated by Donald Trump’s America against China in March 2018 have now spread to almost all parts of the world including India. If this ‘war’ which has already afflicted the market continues, the experts in this field warn that this would be a retrograde step towards yet another economic emergency.
America instigated the trade war by increasing the import duty of 10 per cent and 25 per cent on Aluminium and steel respectively in March. Alongside making way for huge profits for the steel and aluminium traders in America, Trump through this decision, had aimed to debilitate China which exports the most in the sector. This did not affect China alone. It gave a jolt to almost all countries except Australia and Brazil. With Trump rejecting WTO’s demand to review the decision, several countries increased the duty on different products along the same lines. China retaliated by increasing the duty of 659 products from America to 25 per cent. US will now have an additional liability of 50 billion dollars if it has to import all these products to China.
Although Canada, Mexico, European Union and Turkey made attempts to put America under pressure by increasing the import duty, Trump was fierce in his stance. Even amidst the criticisms from his own country, he announced that his decision was to seize the monopoly of global trade order by imposing an import duty of Rs 20, 000 crore dollars on China again. Trump openly revealed that it was a retaliatory move against China for stealing America’s intellectual property rights and technology. It was amidst this that India intervened. Like the above mentioned nations, India has decided to increase the import duty on 29 products from America. Although the US would have only an additional liability of mere 24 crore dollars through this move, this decision is seen to pave way for the further straining of ties between the two nations. Given that America is India’s largest trading partner, it is yet to be seen how far this decision will be implemented. The fact that these latest developments has come when trade and diplomatic dialogue between the representatives of the two nations are due in the first week of next month is noteworthy. Latest reports say that Japan as well is moving along the same lines as India.
WTO came into effect on January 1, 1995 by ending the General Agreement on Tariffs and Trade (GATT) deal. Since then many had criticized that this organization was formed to retain the trade monopoly of the world powers. It has been evident many a time. The big powers have several times suppressed the developing nations which have been making progress in the production and service sectors, with the support of this organization. WTO has been functioning as the agents of corporate monopolies by imposing heavy import duty on goods from developing nations adversely affecting the trade. Our country has also fallen prey to this. At least six cases with America are pending in WTO. However, those at the top of the organization usually do not show the willingness to intervene in such matters. Even though the current matter is more serious, they have been bowing down before Trump. The world is presently witnessing the competition between the trade monopolies of the east and the west. Countries including India are joining the fray due to several reasons. Thus this has paved way for another ‘world war’. World powers have adopted different means during post-colonialism for retaining the economic and political monopoly even without any technical war or sanctions. This import duty smuggling with the silent permission of the WTO is certainly akin to that. Independent trade becomes possible only when the goods of one country can be exported to another with conditions. The third world countries will be able to achieve progress only through such a trade. However, if additional duty is to be given for that, it is the weapon called ‘sanction’ that is being deployed here. If this sanction is continued, it will be the developing nations which will be affected. Similar indications have already been surfaced. Severe recession is apparent in the market. Even the food products are stuck in this sanction. Therefore, the international community demands immediate intervention to put an end to this crisis. It implies that the world powers and institutions like the UN have a long way ahead on the path to democracy in order to realize a completely transparent trade order.