Archive for the ‘Globalization & International Trade’ Category

18
Sep

India’s Soft Power Advantage

Written on September 18, 2014 by Waya Quiviger in Asia, Foreign Policy, Globalization & International Trade

India’s Soft Power Advantage

During Prime Minister Tony Abbott’s recent visit to India, he was asked to justify Australia’s signing of a deal to sell uranium to the country. In response, the prime minister said, “India threatens no one” and “is the friend to many.” This was no mere diplomatic nicety, but a carefully chosen answer based on India’s international image. It is an image that is rare amongst great powers of India’s size and strength, and will give Delhi a unique soft power advantage in the future multipolar world.

Much of the globe sees India as a relatively non-violent, tolerant and pluralistic democracy with a benign international influence. Its values are seen as largely positive.

The U.S., with its Indo-U.S. nuclear deal, accorded India special treatment in nuclear cooperation. The deal provided benefits usually reserved for Non-Proliferation Treaty (NPT) signatories. Washington justified cooperation with India by highlighting Delhi’s impeccable non-proliferation record. This stance was replicated by other states, including the Nuclear Suppliers Group (NSG) member states who allowed India’s participation in international nuclear commerce and supported the Indo-U.S. deal. The NSG decided to re-engage with India following an India-specific safeguards agreement with the International Atomic Energy Agency (IAEA). The IAEA’s Board of Governors endorsed a nuclear safeguards agreement with India by consensus that would permit Delhi to add more nuclear facilities to be placed under the IAEA safeguards framework. India did not have to have an Additional Protocol like the non-nuclear weapons states who are NPT signatories. India also received favorable treatment from Canada (which agreed to supply “dual-use items” that can be used for civilian and military applications), Japan and South Korea.

This cooperation was not merely driven by these states’ strategic relationships with the U.S. Russia has long cooperated with India on nuclear technology. Even China, as a member of the NSG, did not oppose the group’s decision on India. Today, India is the only known nuclear weapons state that is not part of the NPT but is still permitted to engage in nuclear commerce globally.  Read more…

Published in http://thediplomat.com/

14
May

On Monday 12 May, Dr. Casilda Güell, Professor of Political Science at the Universitat Internacional de Catalunya, addressed the MIR class in a very lively debate on regional integration. Quoting various authors including Barry Buzan and Richard Haas, Dr. Güell discussed the merits of regional integration in addressing the global challenges countries face today including financial crises, epidemics, terrorism, climate change. The nation state is now receding and no country alone can tackle these global problems, not even a superpower.  According to Buzan, the world is changing and we are evolving from a unipolar world dominated by a reluctant hegemon, the US, to a multipolar world with different poles composed of regional unions such as the EU, Mercosur, ASEAN…

Unlike what many pundits affirm, China will not be the next hegemon. It is unwilling to take on that role and should it rise to that position, other poles would counterbalance it.  Dr. Güell then discussed the 5 layers of integration, free trade, customs union, common market, economic union and political union. The EU is currently between the 4th and 5th layers. NAFTA is at the first stage while Mercosur is currently a customs union. Dr. Güell asked the students if economic integration was a prerequisite to political integration: peace through commerce. Opinions were divided even though history shows that political union when it is reached first goes through the stage of economic integration.

The seminar concluded with short student presentations on the pros and cons of NAFTA, Mercosur and the EU. The class was overwhelmingly in favor of regional integration with one of two dissenting voices that made for a richer discussion.

 

 

 

17
Mar

Trade agreements are a subject that can cause the eyes to glaze over, but we should all be paying attention. Right now, there are trade proposals in the works that threaten to put most Americans on the wrong side of globalization.

The conflicting views about the agreements are actually tearing at the fabric of the Democratic Party, though you wouldn’t know it from President Obama’s rhetoric. In his State of the Union address, for example, he blandly referred to “new trade partnerships” that would “create more jobs.” Most immediately at issue is the Trans-Pacific Partnership, or TPP, which would bring together 12 countries along the Pacific Rim in what would be the largest free trade area in the world.

Negotiations for the TPP began in 2010, for the purpose, according to the United States Trade Representative, of increasing trade and investment, through lowering tariffs and other trade barriers among participating countries. But the TPP negotiations have been taking place in secret, forcing us to rely on leaked drafts to guess at the proposed provisions. At the same time, Congress introduced a billthis year that would grant the White House filibuster-proof fast-track authority, under which Congress simply approves or rejects whatever trade agreement is put before it, without revisions or amendments.

Controversy has erupted, and justifiably so. Based on the leaks — and the history of arrangements in past trade pacts — it is easy to infer the shape of the whole TPP, and it doesn’t look good. There is a real risk that it will benefit the wealthiest sliver of the American and global elite at the expense of everyone else. The fact that such a plan is under consideration at all is testament to how deeply inequality reverberates through our economic policies.

Worse, agreements like the TPP are only one aspect of a larger problem: our gross mismanagement of globalization.

Let’s tackle the history first. In general, trade deals today are markedly different from those made in the decades following World War II, when negotiations focused on lowering tariffs. As tariffs came down on all sides, trade expanded, and each country could develop the sectors in which it had strengths and as a result, standards of living would rise. Some jobs would be lost, but new jobs would be created. Read more…

 

By Joseph Stiglitz, Mar. 15, 2014; Published in The New York Times

29
Jan

New forms of political conflict have emerged that are resistant to traditional prescriptions

Faced with a dangerous political threat, governments the world over tend to place their faith in the same magic medicine – economic growth. When world leaders try to address the roots of terrorism, for example, they instinctively assume that prosperity and jobs must be the long-term answer. And when a regional conflict threatens to get out of control – in east Asia or the Middle East – the standard political response is to call for greater economic integration. From Europe to China, governments place their faith in economic growth as the key to political and social stability.

But just as doctors fear the emergence of superbugs that will not respond to existing drugs, so world leaders are beginning to witness the emergence of new forms of political conflict that are resistant to their traditional prescriptions – more trade and more investment, washed down with a good dose of structural reform.

Three political superbugs are causing special concern. The first is the spread of conflict in the Middle East. The second is the growing rivalry between China and Japan. The third is rising inequality in the western world – and the threat of social conflict that goes with it.

Delegates at the World Economic Forum in Davos, which ended last week, are the classic believers that capitalism and globalisation are the best antidotes to conflict. This belief is so deeply ingrained that it no longer even needs to be articulated. You can just see it in the way in which a Davos audience responds to political leaders.

This year it was President Hassan Rouhani of Iran who was received with great enthusiasm, largely because he seemed more interested in trade and investment than in nuclear weapons. Mr Rouhani did not shift Iran’s position on the difficult political issues – such as Syria, Israel or nuclear weapons – in any important way. But he sent a significant signal by beginning his speech with a statement of his ambition for Iran to become one of the 10 largest economies in the world. The Iranian leader also stressed the need to improve his nation’s relations with the rest of the world in order to achieve that goal. This emphasis on economics suggested to those in the audience that President Rouhani is literally a man you could do business with.

As a result, Mr Rouhani is in the novel position, for an Iranian leader, of being regarded as a voice of reason in the Middle East. But the president’s elevated status in the eyes of the Davos crowd is also a sign of how bleak things look elsewhere in the region.

No appeal to economic rationality is likely to end the war in Syria – where both sides are fighting for survival. It is also clear that the jihadists who are flourishing in Syria, Iraq and elsewhere are unmoved by the fruits of globalisation. Unless something goes seriously wrong, they will not be showing up in Davos any time soon.

Many still hope that an improvement in the economic situation of the Middle East will assuage the economic despair on which militant Islam is assumed to flourish. Yet not all jihadists hail from poor countries or impoverished backgrounds. Some of the militants showing up in Syria have travelled from Europe. Others have come from Saudi Arabia or the Gulf states. Jihadism is a disease that does not respond well to the traditional economic drugs.

The rise in tensions between China and Japan is an even more graphic illustration of the fact that economic self-interest is not a cure-all for political problems. China is now Japan’s largest trading partner and the biggest recipient of Japanese foreign investment – facts that many analysts still hope will make conflict between the two nations significantly less likely. Yet in some respects, China’s growing prosperity is actually driving the increase in international tensions in Asia. That is because the rise of China has altered the balance of power between Beijing and Tokyo and – combined with the bitter history between the two countries – that explains why relations are getting worse.

In Europe and North America it is the threat of political and social tensions within nations, rather than international rivalries, that are worrying the global plutocracy. A central element of the Davos creed is the faith that globalisation is good for both the western world and for emerging powers.

However, it is now almost conventional wisdom that the globalisation medicine has had an unpleasant side-effect. Even if it raises overall growth levels it has also powerfully contributed to wage stagnation and increasing inequality in the west. As a result, European politicians are worrying about a possible resurgence of the nationalist right and the radical left. And the Americans are increasingly worried about the gap between the richest 1 per cent and the rest – and the political consequences should the gulf keep widening.

It is easy to mock the global plutocracy – fretting about war and inequality – as they sip fine wines, behind a security perimeter high in the Swiss mountains. Yet global bankers and business people are, at least, largely immune to the viruses of xenophobia and nationalism. Their unofficial slogan is “make money, not war”. And they treat foreigners as potential customers rather than potential enemies.

In that sense, the idea that capitalism and globalisation are the best antidotes to political conflict – for all its flaws – retains a lot of attraction. Even if the old economic treatments for political conflict are losing some of their potency, they are still the best we have.

 By Gideon Rachman As published on Jan. 27, 2014 in http://www.ft.com

 

5
Nov

It is unclear whether a system that is geared to growth can also provide clean air and water

By Gideon Rachman

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Foreign commentators and local bloggers regularly predict that China is heading for an economic and political crisis. But the country’s leaders are in strikingly confident mood. They believe that China can keep growing at more than 7 per cent a year for at least another decade. That would mean the country’s economy – already the second-largest in the world – would double in size. And, depending on the assumptions you make about US growth and exchange rates, it would probably mean that China becomes the world’s largest economy by 2020.

Nobody embodies the leadership’s confidence better than the burly, imposing figure of Xi Jinping, China’s president. Last week, I was part of a group of foreign visitors – brought together by the 21st century Council, a think-tank – who met the Chinese leader in Beijing. Mr Xi’s manner is warmer and less formal than that of Hu Jintao, his slightly robotic predecessor. Yet the staging of the meeting had faint echoes of Chinese history, in which foreign barbarians paid tribute to the leader of the Middle Kingdom.

The president sat in an armchair in a cavernous meeting room in the Great Hall of the People, with a vast mural of the Great Wall of China behind him. Arranged in a semi-circle in front of him was a group of former presidents and prime ministers from other nations, including Gordon Brown of Britain and Mario Monti from Italy. In the semi-circle behind them were some western business leaders, and a smattering of “thinkers”. President Xi started his remarks by pronouncing himself “deeply moved by the sincerity you have shown”. He then proceeded to give a confident presentation of his vision for the “great rejuvenation of the Chinese nation”.

In remarks that were widely picked up by the Chinese media, Mr Xi dismissed the idea that China risks falling into a “middle-income trap” that stalls its development and said he was confident that rapid growth could continue, without the need for further stimulus measures.

Exactly how China will sustain its growth and strengthen its global position is, however, the subject of intense discussion among the country’s leadership – as became clear in a series of other meetings arranged for our group with top military, diplomatic and economic policy makers. Read more…

As published in www.ft.com on November 4, 2013.

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