{"id":5611,"date":"2020-01-14T14:24:53","date_gmt":"2020-01-14T08:54:53","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=5611"},"modified":"2020-01-14T14:24:53","modified_gmt":"2020-01-14T08:54:53","slug":"global-trading-system-ready-for-a-new-normal","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/global-trading-system-ready-for-a-new-normal\/","title":{"rendered":"Global trading system ready for a new normal"},"content":{"rendered":"<p><strong>Relevance: Mains: G.S paper II: Bilateral trade grouping and its affect India\u2019s interest<\/strong><\/p>\n<p><strong>Context:<\/strong><\/p>\n<ul>\n<li>The tale of two events at two different points of time demonstrate unusual commonalities.<br \/>\n\u2022 One occurred in 2001, and another is about to take place on January 15.<br \/>\n\u2022 While the first event happened against the backdrop of the 9\/11 terrorist attacks and the impending Iraq war, the second is about to unfold amidst escalating US-Iran tensions.<br \/>\n\u2022 In both events, the dramatis personae are the same: the US and China, the world\u2019s two largest economies.<\/li>\n<\/ul>\n<p><strong>Protracted negotiations preceded:<\/strong><\/p>\n<ul>\n<li>The US paved the way for China to join the World Trade Organisation (WTO) in 2001, after extracting a significant price by forcing Beijing to slash its tariffs on industrial and agricultural products to levels that industrialised countries took more than 200 years to bring down. China had also committed to reduce subsidies and other trade-promoting measures for industry and agriculture.<br \/>\n\u2022 Beijing had agreed to reduce its de minimis support for agriculture producers below what was allowed for developing countries.<br \/>\n\u2022 For almost 15 years, anti-dumping investigations against Chinese products were punitively high as they were treated as products originating from non-market economy.<br \/>\n\u2022 China chose to pay the price to establish its presence in the global trading system.<\/li>\n<\/ul>\n<p><strong>US\u2019 allegations:<\/strong><\/p>\n<ul>\n<li>The US says China aggressively promotes 10 advanced manufacturing industries domestically \u201cto replace foreign products with Chinese companies\u2019 products in the China market through a variety of fair and unfair means, including through the extraction of foreign technologies,\u201d according to a 2017 report to the US Congress by the Office of the US Trade Representative in January 2018.<br \/>\n\u2022 The continued ballooning of the US trade deficit which touched $648 billion in manufactured goods last year and the loss of five million jobs during the last 16 years demonstrates that multilateral, regional, and even bilateral trade agreements with Korea and others, have only brought de-industrialisation and destruction.<br \/>\n\u2022 In short, the US argues that ever increasing trade deficits are an offshoot of the manner in which it was duped, cheated, and deceived by its trade partners who refused to play by the rules governing the so-called \u201cfair and free trade\u201d.<br \/>\n\u2022 The new Sino-US normal attempts to cock a snook at the global trading system based on rules and comparative advantage.<br \/>\n\u2022 So, the trade war between the two largest economies in the world has almost paved the way for managed trade in which countries compete not on the basis of their comparative trading strengths but on sheer market and power-based equations.<br \/>\n\u2022 There will be several collateral causalities in the global trade because of this new normal.<br \/>\n\u2022 Countries like Australia, Brazil, Argentina, and other major farm producers will take a hit once orders from China dry up because of the purchase of American farm products.<\/li>\n<\/ul>\n<p><strong>Conclusion:<\/strong><\/p>\n<ul>\n<li>There is no guarantee that trade relations between the two major powers will dramatically improve.<br \/>\n\u2022 Indeed, the trade war could continue for a considerable period of time.<br \/>\n\u2022 It is essentially a battle over who is going to be the hegemon and who is going to lead the fourth industrial revolution,\u201d former South African trade minister Rob Davies told this columnist.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relevance: Mains: G.S paper II: Bilateral trade grouping and its affect India\u2019s interest Context: The tale of two events at<\/p>\n","protected":false},"author":1,"featured_media":3530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[123,18],"tags":[392],"class_list":["post-5611","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","category-general-studies-ii","tag-union-public-service-commission-upsc"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=5611"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5611\/revisions"}],"predecessor-version":[{"id":5612,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5611\/revisions\/5612"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/3530"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=5611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=5611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=5611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}