US-CHINA TRADE SPAT: IN­DIA NEU­TRAL

In­dia suo motu has been the sup­porter of the rule­based mul­ti­lat­eral trad­ing or­der, Niti Aayog vice-chair­man Ra­jiv Ku­mar said

Financial Chronicle - - FRONT PAGE - KJM VARMA

In­dia said it would not take sides in the on­go­ing trade spat be­tween the US-China as it con­cluded the key strate­gic eco­nomic di­a­logue with Bei­jing dur­ing which dif­fer­ences per­sisted over BRI.

In­dia on Sun­day said it would not take sides in the on­go­ing trade spat be­tween the US and China as it con­cluded the key strate­gic eco­nomic di­a­logue with Bei­jing dur­ing which dif­fer­ences per­sisted over China’s con­tro­ver­sial ‘belt and road ini­tia­tive’ (BRI).

Re­marks by Niti Aayog vice-chair­man Ra­jiv Ku­mar came as he held the fifth strate­gic eco­nomic di­a­logue (SED) di­a­logue with his Chi­nese coun­ter­part He Lifeng, the chair­man of China’s top plan­ning body the na­tional de­vel­op­ment and re­form com­mis­sion (NDRC), here on Satur­day.

Dur­ing the talks, the ‘belt and road ini­tia­tive’ also came up for dis­cus­sion.

“In­dia suo motu has been the sup­porter of the rule­based mul­ti­lat­eral trad­ing or­der. In that sense, we don’t have to take sides ei­ther oneway or the other,” Ku­mar told the me­dia when asked about In­dia’s stand on the cur­rent trade spat be­tween China and US.

The strate­gic eco­nomic di­a­logue, a key plat­form be­tween In­dia and China to dis­cuss trade and eco­nomic is­sues, was re­sumed this year af­ter last year’s dis­rup­tion amid Dokalam stand­off.

The meet­ing took place amid grow­ing rap­proche­ment be­tween the two coun­tries af­ter the stand­off. “In­dia has al­ways taken in­de­pen­dent po­si­tion on trade is­sues,” Ku­mar told the In­dian me­dia.

His re­marks came as the US and China an­nounced tit-for-tat tar­iffs on each other’s prod­ucts. US pres­i­dent Don­ald Trump is ramp­ing up pres­sure on China to cut the $375 bi­lat­eral bil­lion trade deficit.

“While In­dia does not like any mea­sures that harm the rule-based in­ter­na­tional trade regime, there is no rea­son to take sides in this,” he said. “We are not that level of player in the mar­ket. Our shares are much smaller. We are the tak­ers of the rules than mak­ers,” he said.

Ku­mar men­tioned the US and Ja­panese trade war in late 1980 when Wash­ing­ton suc­cess­fully pres­sured Ja­pan to cut the trade deficit. “That is what the US is still ex­pect­ing. If you no­tice, both sides have an­nounced their po­si­tion (to cut tar­iffs) but they have not given the dates. This is pos­tur­ing,” he said. “I don’t think any­body is in­ter­ested in trade war trade cri­sis,” he said.

In his ad­dress at the strate­gic eco­nomic di­a­logue on Satur­day, Ku­mar made a strong pitch for China to al­low In­dia’s ex­ports of soy­bean and sugar. Soy­bean is re­garded as most im­por­tant for US farm­ers and China is the largest im­porter. China has threat­ened to im­pose 25 per cent tar­iffs on its im­ports if Trump went ahead with his tar­iff plan for China. Elab­o­rat­ing on his stand in ask­ing China to im­port soy­bean and sugar from In­dia, he said, “My hint was much more to­wards agri­cul­tural tar­iffs in China than any­thing else”.

China’s agri­cul­tural tar­iffs are high and In­dia’s agri­cul­tural ex­ports suf­fer as a re­sult of it.

Asked whether the USChina trade spat is ad­van­ta­geous to In­dia, he said, “If war hap­pens, ele­phants fight and grass gets af­fected. We are part of the grass. We don’t want that” Ku­mar said, adding that the US and China be­ing the world’s top two economies are giants. “We are not there yet,” he said.

Ap­par­ently, China has raised the ‘belt and road ini­tia­tive’ at the strate­gic eco­nomic di­a­logue for which In­dia re­sponded rais­ing its con­cerns over the sovereignty is­sue re­gard­ing the China-Pak­istan eco­nomic cor­ri­dor (CPEC) as it is be­ing laid through Pak­istanoc­cu­pied Kash­mir (PoK). Ku­mar said Chi­nese brought up the ‘belt and road ini­tia­tive’ is­sue and the In­dian del­e­ga­tion re­sponded by say­ing it is a mat­ter of sovereignty which can­not be com­pro­mised.

The Chi­nese side “ex­tolled” the ‘belt and road ini­tia­tive’ virtue and em­pha­sised how it is “com­pletely non­con­flict­ual and re­spect­ful of sovereignty and in­de­pen­dence”, he said. “Af­ter hear­ing In­dia’s re­sponse they chose to ig­nore it,” he said.

But at the same time there was no ref­er­ence to CPEC and it is cov­ered in the sovereignty-re­lated con­cerns raised by In­dia, Ku­mar said. “Both sides recog­nise the dif­fer­ences over the is­sue. But there is suf­fi­cient scope within the de­fined red­lines to take the de­vel­op­ment co­op­er­a­tion for­ward,” he said.

There was a dis­cus­sion at the strate­gic eco­nomic di­a­logue about the Bangladesh, China, In­dia and Myan­mar (BCIM) cor­ri­dor. While China says it is a part of the ‘belt and road ini­tia­tive’, In­dia says the project pre­dates that.

Ku­mar said the main fo­cus for In­dia is Asian tri­lat­eral high­way. The BCIM is work in progress.

Cur­rently Bangladesh and Myan­mar are not in­ter­ested in it in view of the Ro­hingya refugee cri­sis, Ku­mar said.

China for its part ap­pre­ci­ated In­dia’s Act East Pol­icy to im­prove con­nec­tiv­ity in the north-east­ern states.

He said the core mes­sage from the strate­gic eco­nomic di­a­logue was that “we must fo­cus in­ces­santly and un­remit­tingly on the de­vel­op­ment co­op­er­a­tion pos­si­bil­i­ties de­spite dif­fer­ences”.

“Ma­jor take away for In­dia was that China has ex­pressed in­ter­est in join­ing the In­ter­na­tional So­lar Al­liance mooted by In­dia,” Ku­mar said. “It seems we have an open­ing. If that hap­pens it can be a big shot the arm,” he said. —PTI

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