View: All are winners in Trump’s trade truce

Hours after US President Donald tossed new trade threats at G20 partners China and India, he flew out of Osaka after productive meetings at the G 20 summit, signalling truce. The latest pause in trade hostilities between the US and China, the two largest economies of the world, will help contain the collateral damage that the rest of the world would have otherwise suffered. It will reverse the likelihood of asteep slide in global growth, prevent a full-fledged trade war and the prospect of supply destructions that could have led to flight to capital from emerging markets to the safety of the home market and made currency and interest rates move in undesirable ways. Analysts reckon that Trump seems to have realised that ‘go-at alone approach’ from trade talks, security to climate change may not work, even in the interest of his own country. That is a reasonable assumption. He told reporters in Osaka that he would refrain from slapping new levies on additional $ 300 billion worth of Chinese goods that would have effectively extended tariffs to everything China. “We are right back on track and we’ll see what happens.. We are holding back on tariffs and they are going to buy farm products” he said. Of course, he made it clear that existing import tariffs levied on imports from China would not be lifted. But more retaliation against one another would stop and that’s good news for the world, and India. His interaction with PM Modi was seen to be a fruitful one. “A very big deal” with India was in the offing. “I think we were going to have some very big things to announce. Very big trade deal,” he observed. Later, both India and the U.S. said the leaders had a “productive” meeting in areas such as trade, 5G technology, energy security and the Iran crisis. Earlier, the US had warned the Indian government that companies found supplying equipment or other products of American origin to Huawei or its units could face punitive action. But now that US firms would be able to sell components to the world’s biggest telecom network gear makers where there was no national security problem, it would ease the pressure on India that was hoping to let Huawei to participate in 5 G trails. What stands out in the G 20 declaration is the commitment of the world leaders to stand for a rules based world order that India has been championing. True, there has been no outright denouncement of protectionism, but the G 20 declaration shows that there has been ‘give and take’ due to political coordination. “We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open. International trade and investment are important engines of growth, productivity, innovation, job creation and development. We reaffirm our support for the necessary reform of the World Trade Organization (WTO) to improve its functions. "We reaffirm our commitment to further strengthening the global financial safety net with a strong, quota-based, and adequately resource International Monetary Fund (IMF) at its centre. An open and resilient financial system, grounded in agreed international standards, is crucial to support sustainable growth. We remain committed to the full, timely and consistent implementation of the agreed financial reforms." it said. The need now is to push for the appointment of members of the appellate body in the Dispute Settlement Mechanism — the US has so far been blocking appointment of members to the appellate body. Strengthening the WTO will immensely benefit India that should also desist excessive protectionism.

Source: The Times of India

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