The contest is not merely for politics, it is for dominance of technology and the global economy for the coming years, says Meera Shankar, former Ambassador to US.
ET Now: At G20, everything is centered around America and China. Americans want to protect their turf, and the Chinese do not want a trade war. But if there were one, they would not desist from protecting their turf. What can one expect in term of China-America and India-America when it comes to trade-war tensions?
Meera Shankar: Firstly, I think President Trump has somewhat softened on Chinese trade tension front because he has not imposed tariffs on the additional $300 billion worth of Chinese imports into the US, as he had threatened. Secondly, he said that he was ready for a deal and that there could be one, but it is very unpredictable. Perhaps the best you could get out of this meeting is a decision to re-engage and commence talks, because since talks broke down, US and China have not been in touch as far as negotiations are concerned.
So, you will possibly see the two agreeing to resolve issues through discussions, and resume negotiations. Perhaps the same may hold true for India-US, where the US says India's tariffs are very high. But actually, weighted average tariffs are not that high; averaging 13.8%.
Most developing countries, including Brazil, South Korea, and others, have tariffs roughly in the same range. Tariffs that abound in the WTO are higher, and that is because we have a somewhat fragile balance of payments situation that we want to cushion, should it deteriorate and need to restrain imports arises.
As we import far more than we export, given our dependence on imported energy, trade protectionism is going to be high on the agenda. Iran will certainly be high on the agenda, too, because the meeting is taking place even as Iran-US tensions touch an all time high, threatening to spill over into actual hostility. Both sides have pulled back, as of now, from letting it spill over into active hostility.
Then there are the perennial developments, climate change and so on. So, there are many issues on the agenda this G20 and arriving at a consensus will mean somehow bringing the Americans on-board because the first-time President Trump refuses to even refer to free trade. He has painted the US as a victim of unfair trade practices by other countries; which is somewhat incredible given that the US continues to be the largest economy, the most powerful country, and has a robust economy growing at a faster pace than it has in years. Unemployment levels are near 4%, which is very low and probably the best that theRead More – Source