An opportunity for doing better trade,  India has to up the ante in EU and elsewhere ;US, China Trade war : Some updates


An opportunity for doing better trade,  India has to up the ante in EU and elsewhere ;US, China Trade war : Some updates

While most of the countries are now in the process of the Corona virus vaccination program, the trade war started during President Trump tenure continues in different forms. Meanwhile, U.S. President-elect Joe Biden named Katherine Tai as his choice for the U.S. trade representative — a critical position that will negotiate trade with China. Tai, a Mandarin speaker and expert on China, will likely carry on a tough line against Beijing, according to former Trump trade negotiator Clete Willems. But Tai would favor working with allies as she handled joint disputes by U.S. and partners — including the European Union, Mexico and Japan — at the WTO against China. Importantly for the US and the world, Congress also reached a deal Sunday on a $900 billion coronavirus relief package, according to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer.

President Biden had also said that he will not immediately roll back tariffs imposed unilaterally by President Trump without taking partners into full confidence,  and would  want to consult with allies to develop a “coherent strategy” on China. 

Australia- China trade spat:

Besides, the true colour of an aggressive China was seen as the trade spat between China and Australia made news last week. The two countries’ relationship has deteriorated since Australia supported the growing call for an international inquiry into China’s handling of the coronavirus. China has slapped tariffs on Australian wine and barley exporters. Restrictions on coal, lobsters, timber, red meat and cotton exports from Down Under have also been placed, though China has not introduced any restrictions on Australia’s biggest export to the country: Iron ore.

Australia is one of the nations that exports more to China than imports. India can use this trade war to its advantage. Australia plans to challenge China at the World Trade Organization over Beijing’s decision to impose hefty tariffs on its barley.

However the problem is India does not need as much meat or wine ( top Australian exports) but still can look for other items ( timber etc) .

India however can try to increase her exports to Australia and also push to strengthen bilateral relations as well as strategic interests.  India and Australia have gone well in the sports arena and there is a liking between the two nations in the domain of cricket. China has sent millions of her students to Australia, EU, and America and has made them as bargaining chips. India has to think of such bilateral exchanges to boost ties as an example. 

European Union:

The European Union is also going through endless pain with Brexit showing no signs of a proper settlement. Germany and France, two of the most powerful nations of EU are on the other side of Brexit , where Germany supports Brexit while France is making sure that the treaty does not work out soon. On the surface though the EU looks a stable coherent group of countries but there is a lot of inter rivalry between many of them. Unexpectedly President Emmanual Macron seems to be following an aggressive policy on many issues including Brexit and Islamic bans. There is a good opportunity for India to enter the European Union in a big manner. 

India has shown interest in a FTA with the EU in principle though things have not moved much on ground.  India is open to the idea of a preferential trade agreement with the EU to get faster outcomes before hammering out a more ambitious free trade agreement (FTA) that has been negotiated since 2007. The earlier discord between the two nations is giving way to more optimism and positivity as the world has seen the fragility of relations and aggression of China.

India will hold the UN Security Council seat in 2021-22 and the G20 presidency in 2022. This is an opportunity to move forward on a shared vision of rules-based multilateralism. As a champion of the rules-based international order, the EU is being increasingly challenged by the proliferation of exceptionalism. The EU and India must join forces to promote rules-based multilateral institutions, with the WTO first in line.

A new  by the European Parliament assesses the potential gains of an EU-India trade agreement at between €8 bn and €8.5 bn from increased trade for both sides. The 15th EU-India summit has come out with a comprehensive roadmap for 2025 which is seen very positively. study


We have taken the examples of two trade blocks both are quite big. Australia and EU. As the world goes to find new relationships amidst US-China trade uncertainties and other developments there is an opportunity for India to increase her presence and trade deals with countries. India’s position of late has been strengthened after the short shrift with China and countries are now seeing India as a strong nation that can handle many global challenges, trade being one of them. 

However as we have seen in the case of manufacturing out of more than 50 companies that moved out of China last year to new locations only 4 made their way for India. There are still many bottlenecks to deal with. CoronaVirus pandemic has taken a big toll that is still not fully come out. The government has to seize opportunity and go for a big push to increase trade with Australia, EU, Britain and other parts of the world. A person or a country who makes the most of the opportunity is finally able to survive the travesty of time. 




Asheesh Shah
Author: Asheesh Shah

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