The Second Shot ?
----------------------
Or , is it a “ beginning of the end “ of #WTO ,
#Globalization ?
It was only yesterday , that I blogged :
Then read the following in today’s media :
Bloomberg :
CNBC :
Trump
slaps China with tariffs on up to $60 billion in imports: 'This is the first of
many'
https://www.cnbc.com/2018/03/22/trump-moves-to-slap-china-with-50-billion-in-tariffs-over-intellectual-property-theft.html
And here is what Washington
Post reported :
“We’re doing things for this country that should have been
done for many, many years,” the president said before signing a memorandum
setting in motion the trade actions.
The president blamed China for the loss of 60,000
factories and 6 million jobs, a
number that most economists say blends the impact on U.S. employment of both
Chinese competition and automation.
Trump said that unfair Chinese trade
practices are responsible for the yawning U.S. trade deficit with China, which
has reached a record $375 billion on his watch.
The White House expects the new taxes, which could reach up
to 1,300 specific imports, will have a “minimal impact” upon consumers.
“The era of economic
surrender is over,” added Vice President Michael
Pence.
Zhang Xiangchen, Beijing’s ambassador to the WTO said :
“ China is preparing for a range of responses to the US
tariffs and will stand up to protectionism but still hopes for a dialogue .
This is a legitimate right for China to do that. But I would not exclude other
options because if the flood
approaches, you have to bank up to keep it out “
And the American Eagle has included India among the
top five countries to be targeted for “ Getting Even “ !
I do hope Indian Government and Indian Companies
introspect and ask :
“ How fast can we turn India into a , LOW COST ECONOMY ? “
When fighting a #TradeWar , even WTO cannot mandate a
,
Level
Playing Field ? [ 11 June 2016 ]
23 March 2018
www.hemenparekh.in
/ blogs
From: Hemen Parekh
[mailto:hcp@recruitguru.com]
Sent: 22 March 2018 17:02
To: Cabinet Ministers; assocham@nic.in; ficci@ficci.com; info@cii.in; siam@siam.in; chiefminister@maharashtra.gov.in; BJP National Executive
Cc: ssbhalla@gmail.com; bibek.debroy@gov.in; ashima@igidr.ac.in; rr1@nipfp.org.in; ratanp.watal@gov.in; ceo-niti@nic.in; Indian Think Tanks; TV Anchors; Editors; Shereen Bhan; Gurudatt Kundapurkar; Haridas Shenoy; vch-niti@gov.in; Pradeep Talpade; Indrajit Sethi; L&T G K Apte; hcp@recruitguru.com
Subject: ENEMY WITHIN ? or OUTSIDE ?
Sent: 22 March 2018 17:02
To: Cabinet Ministers; assocham@nic.in; ficci@ficci.com; info@cii.in; siam@siam.in; chiefminister@maharashtra.gov.in; BJP National Executive
Cc: ssbhalla@gmail.com; bibek.debroy@gov.in; ashima@igidr.ac.in; rr1@nipfp.org.in; ratanp.watal@gov.in; ceo-niti@nic.in; Indian Think Tanks; TV Anchors; Editors; Shereen Bhan; Gurudatt Kundapurkar; Haridas Shenoy; vch-niti@gov.in; Pradeep Talpade; Indrajit Sethi; L&T G K Apte; hcp@recruitguru.com
Subject: ENEMY WITHIN ? or OUTSIDE ?
A #TradeWar Epidemic ?
----------------------------------
Not everyone agrees but there are unmistakeable
symptoms
For differing reasons, all countries want to #export
more and #import less
Emerging countries believe that an export-led economic
growth could raise per capita income of its poor citizens and create jobs for
millions of their #unemployed youth .
They think their own domestic consumers just don’t
have enough money to consume more of locally produced goods
Then there is USA , which believes that , in order to
correct the #trade-imbalances , other countries must :
# buy more from USA
# export less to USA
#DonaldTrump also believes that local Industries – and
jobs within those industries – can be saved from getting decimated by imposing
high #import-duties on imports into USA
By imposing 25 % duty on Steel / 10 % duty on Aluminum
/ 70 % duty on Solar Panels , he thinks he can save 170,000 American jobs
But some economists think , this step will destroy
450,000 jobs in the US automotive industry , since input costs will push up
selling prices, which in turn , will reduce the demand ( local + export )
At the same time, Trump has agreed to exempt Canada /
Mexico from these revised duties
Other major steel-exporting countries ( to USA ) , are
asking similar exemptions !
Some ( like EU ) are even threatening counter measures
on US exports to them !
As of yesterday , US has slapped a “ #AntiDumping Duty “ on stainless steel flanges
imported from India , claiming these are priced 18 % to 145 % below their fair
value !
Not leaving things at this, last week US has lodged a
complaint with #WTO against India !
US wants India to stop all #ExportSubsidy to its exporters , as mandated by #WTO clause
{ Since, India’s per capita #GDP exceeded $ 1,000 per year for 3 years in a
row }
"These #Eexport-Subsidy programs harm American
workers by creating an uneven playing field on which they must compete,"
said US Trade Representative Robert Lighthizer.
I believe India’s Export Subsidies , add up to $ 7 billion per year
No doubt , Commerce Minister Nirmala Sitharaman and
Commerce Secretary Rita Teaotia , will defend India’s position at #WTO
They may even succeed in getting extension of a few
years for India to phase out / dismantle its current practice
But, at the most , they may succeed in “ postponing
the evil day “ !
As FIEO , Director General , Ajay Sahai told PTI :
"It is a huge
concern for export sector and the industry feels that the so
called export subsidies should be eliminated gradually
"
We , in India , must
realize the following :
·
Trade wars will intensify with all countries
trying to protect local jobs / industries
·
In this “ dog eat dog “ world, WTO cannot
continue to provide much protection, where large importing countries want to “
balance their trade surpluses / deficits “
·
#Multilateralism will gradually give way to
#Bilateralism
·
Bilateral Trade Agreements will be a matter of “
trade off / give and take “
·
In this war there will be neither permanent
friends nor permanent enemies
·
Even an enemy of your enemy, may not count as
your friend !
·
Only way to survive, will be by ensuring
that we turn India into a :
#LOW-COST-ECONOMY,
where we can compete with
the rest of the world ( for our share of the World trade ), on the basis of a BETTER QUALITY / LOWER PRICE / FASTER DELIVERY , of our products and
services
We must immediately
implement #REFORMS which will help our
companies lower their costs of :
#
Manpower ( Salaries /
Wages )
#
Materials
( Raw materials / Components / Sub Assys )
#
Money
( Funds / Finance / Capital )
#
Space
( Constructed factories / offices / homes )
#
Management ( Manufacturing and
Marketing Overheads )
#
Compliance ( Forms /
Reports to be filled / filed )
#
Corruption (
Bribes to be paid to Govt Agencies / IT dept )
#
Non-Governance ( MPs – MLAs fail their responsibility )
As far as enabling Indian
companies to lower their costs is concerned , ( - thereby ,
effectively making them more
competitive in export market ), there is an urgent need for our governments ( both at the Centre and
at the States ) , to :
Speed up
the pace of #REFORMS already initiated during past 4 years
Initiate
NEW REFORMS
During the past 4
YEARS , I have sent many suggestions to our Policy Makers
It is not possible to list all of these here
But , readers interested to know , may look up a few
of these at :
Agenda
for Reforms [ 01
Oct 2015 ]
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