“The point to remember in respect of the two recent free trade agreements with Oman and New Zealand is that both are not very large economies. They already are fairly open. New Zealand has one of the lowest customs duties anywhere in the world.
“So the incremental gain for our exports from the free trade agreements with both Oman and New Zealand are not likely to be very significant.”
That’s the word from Abhijit Das, former head of the Centre for WTO Studies, during a conversation on The Gist.
He underscored that “Our exports will certainly grow. But the free trade agreements with these two countries cannot really provide the huge boost, the huge momentum to propel our exports to a higher trajectory.”
Equally significant is what he had to say about US moves to “reform” the World Trade Organisation (WTO), set up by the West with the idea of promoting multilateral rules-based trade. Today, the US is seeking to reverse that.
“What we had been suspecting all along for the past few years is, you know, out there at the WTO in writing in black and white. So that leaves no one in any doubt about the motivations and the objectives that the United States wants to pursue.”
The US is challenging the most favoured nation principle, a cornerstone of the WTO, that gives less developed and poorer nations, concessions in terms of their exports to the markets of the rich nations. Donald Trump wants this ended and his reciprocal tariffs have already hit that principle.
Nor does Trump like the “special and differential” treatment for poorer countries, demanding that this apply only to Least Developed Countries and only for a transitory period.
It is also undermining the multilateral and consensus based decision making nature of the WTO with pluri-lateral arrangements. These are agreements signed on by a limited number of WTO members but the US wants such agreements to be included in the WTO rule book.
Given the huge power asymmetry between the US, Europe and Japan on one side, and countries like India, Indonesia, Brazil, Nigeria and others lined up opposite, the latter are at a huge disadvantage and it remains to be seen how they can come together to take on the rich world. This is not a battle that can be fought by individual nations.
Tune in for more in this conversation with Abhijit Das, former head of the Centre for WTO Studies.
Thirty eight years in journalism, widely travelled, history buff with a preference for Old Monk Rum. Current interest/focus spans China, Technology and Trade. Recent reads: Steven Colls Directorate S and Alexander Frater's Chasing the Monsoon. Netflix/Prime video junkie. Loves animal videos on Facebook. Reluctant tweeter.
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