A Meeting of Minds?
Donald Trump had referred to Kim Jong-un as a “sick puppy”, “a maniac” and “little rocket man”. Kim, in turn, not to be outdone, had quipped, calling Trump a “mentally deranged US dotard”. Despite these mutual insults, quite miraculously, the two had agreed on holding the summit in Singapore on July 12. Worse still, even after agreeing on the date for the event, Trump, for reasons that still remain mostly unfathomable, had called it off. However, for reasons that can only be speculated upon, the plans for the meeting were restored.
While few statements ensued from the North Korean side, Trump, in a manner that is all too characteristic of him, stated that he did not need to “prepare very much” for the summit as it was all “about attitude” and that it was “going to be a very fruitful meeting”. He went on to add that the meeting was a “one-time shot” at pursuing denuclearisation. This usual bluster notwithstanding, most informed observers concluded that the meeting would be an initial step which could then lead to further discussions about how best to proceed with the vexed issues that the two sides have sought to tackle.
At issue, of course, was what the two sides had in mind when they referred to the issue of denuclearisation. For Trump and his closest advisors, it meant the formal, verifiable dismantling of North Korea’s nuclear weapons programme. For Kim, in all likelihood, it would amount to a mere freeze on the country’s painfully acquired extant capabilities.
Sadly, despite the language of the joint statement in the wake of the summit in Singapore, which committed North Korea to a process of nuclear disarmament, it is far from clear that such a prospect is imminent. Instead, the language of the statement is quite reminiscent of past promises. Similar statements had been made in both 1994 and 2005, but they both broke down over questions of interpretation and the issue of verification. Consequently, to say the least, it is far from clear that this promise from North Korea amounts to what Trump, with his usual penchant for hyperbole, has described as a “really fantastic meeting”.
Beyond the vague pledge of complete disarmament, Kim has also indicated a willingness to locate the remains of American soldiers who were killed during the Korean War. Once again, Trump has sought to highlight this agreement as a major achievement. In fact, however, it is of little more than symbolic and emotional significance for the progeny of their families.
The US, on the other hand, has made at least two stunning and significant concessions: the first involves the annulment of its military exercises with South Korea. This decision, without any question, caught the South Koreans and Japan by surprise. Trump also stated that he was willing to provide North Korea with security guarantees. The precise features thereof, however, remain unclear at this juncture. Beyond these two striking concessions, he has also indicated that he is entertaining the possibility of inviting Kim to the White House.
What are the ramifications of these agreements for the immediate region and for the rest of Asia? Quite frankly, despite Trump’s attempts to portray this brief summit as a major step toward the denuclearisation of the Korean peninsula, in actual fact, it merely constitutes a possible and quite uncertain step toward that eventual goal. In the meanwhile, Kim’s nuclear weapons and ballistic missile programmes still remain in place. South Korea and Japan will need to carefully monitor the likely negotiations that now lie ahead, which could potentially lead to the dismantling of North Korea’s vast nuclear infrastructure.
Beyond the concerns of these two key states in East Asia, India too has an interest in seeing an ultimate end to North Korea’s nuclear and ballistic missile programmes.
Though mostly forgotten, it is well worth recalling that North Korea played a critical role decades ago in boosting the Pakistani ballistic missile programme, possibly with the connivance of the People’s Republic of China. Given North Korea’s dubious record of adhering to prior bilateral agreements, it may behoove India to devote some diplomatic and intelligence resources to monitoring any possible progress that is made toward undoing North Korea’s vast nuclear estate. Sumit Ganguly is a Distinguished Professor of Political Science at Indiana University, Bloomington, and an Alexander von Humboldt Research Fellow at the University of Heidelberg for 2018-2019
of which are collectively worth over $12 billion. The most controversial of these is the purchase of four S-400 missile systems from Russia worth over Rs 40,000 crore. US lawmakers have specifically opposed this missile system on the grounds that it is ‘noncompatible’ with US equipment even as India and the US try to forge ‘interoperability’—the ability to operate together—by conducting a large number of air, naval and army exercises.
This is important because in December 2016, the US designated India as a major defense partner, allowing it to access sensitive US technology like a $2 billion deal for Guardian drones that is currently under negotiation. Over the past decade, India’s arms imports from the US surged from zero to $15 billion, second only to Russia, a position the US would like to maintain, if not surpass. The Modi government has been slow to move on signing defence deals with the US, partly because of an acute budgetary crunch and also because of a Make in India programme where it aims to make defence equipment indigenously.
India has also signed only one of the three ‘foundational agreements’ that are meant to enhance interoperability with the US. It signed the Logistics Exchange Memorandum of Agreement (LEMoA) in 2016 but not the Communications Compatibility and Security Agreement (COMCASA), which will enable the installation of high-end communication systems in its platforms to talk to US systems, and Basic Exchange and Cooperation Agreement (BECA) which facilitates the exchange of geospatial data. India’s recalcitrant approach has frustrated the US. This month, the US Senate inserted four new clauses under Section 1292 of the Act ‘Enhancing Defense and Security Co-operation with India’ in its defence budget, which Indian officials say hand the US significant leverage and could be used by the Trump administration to extract concessions in the form of defence deals or compliance on contentious issues. The new clauses also empower the Trump administration to suspend CAATSA sanctions against India. A senior US official said, “We need to raise the level of trust between us. We are committed to a strong India.”
PUSHING HARD ON TRADE IMBALANCE
Another contentious issue that Trump will push hard on in the coming months is the trade imbalance between the two countries. The IndiaUS goods trade, worth $74.5 billion (in 2017-18), is dominated by the export of products such as textiles, fisheries, pharmaceuticals and precious stones from India. In terms of value, aircraft, spacecraft and their parts, nuclear reactors, boilers, medical and surgical equipment, semi-precious stones and cultured pearls are the leading products that are imported from the US. India has a $21.3 billion trade surplus in its merchandise trade with the US (in 2017-18) and the attempt is to pressurise India to make imported goods from the US cheaper and thereby turn itself into a more at-
THIS WAS REALLY A MOUNTAIN PRODUCING A MOLE. TRUMP IS SHAKING EVERYTHING LOOSE AND INDIA MUST DECIDE WHAT IT WANTS AND GO OUT AND GET IT, IRRESPECTIVE — SHIVSHANKAR MENON Former National Security Advisor
tractive market for US companies.
Trump chose Harley Davidson as a catchy way to drive home this point. The US company has a modest sale of over 4,000 bikes in India annually, though the global luxury motorbikemaker considers India a promising market. Trump mocked Prime Minister Narendra Modi for reducing the duty on luxury bikes like Harleys only from 75 per cent to 50 percent when he wanted it waived entirely. Trump now threatens to impose higher duties on products imported from India unless duties on ‘Made in America’ products are reduced, if not eliminated. Already, the US has unilaterally slapped 25 per cent and 10 per cent import duties on steel and aluminum products, respectively. India has now approached the World Trade Organization, citing violation of global trade norms.
Trump has begun another retaliatory offensive on the trade front. In April, the office of the United States Trade Representative (USTR), the agency that advises the US president on trade policy matters and is responsible for developing America’s international trade, announced its plans to review the concessional tariffs the US has been offering on export of about 3,500 goods from India to that country. India was among the 121 developing countries and 44 least developed countries that have been enjoying these concessional tariffs under a US scheme called Generalised System of Preferences (GSP), which facilitates trade opportunities for developing countries by offering them concessional tariffs for products that are needed for US consumers and businesses, and for inputs or raw materials used by US manufacturers. The USTR decision to initiate a GSP eligibility review of India was primarily based on complaints from two lobby groups—the US dairy and medical device industries—who said that they are not gaining reciprocal market access in lieu of the concessional tariffs offered to Indian exporters for a wide range of products.
The GSP review has become the most potent weapon in the hands of Trump, who minces no words to remind India that the continuation of the concessional tariffs will depend on how India reciprocates with tariff cuts and elimination of nontariff barriers for US industries and businesses. The threat becomes serious as the United States is India’s biggest export destination. India exported $47.88 billion worth of goods to the US in 2017-18, almost 16 per cent of the country’s total goods exports of $303.38 billion during the year. “The US is an extremely important market for India. In the textile and leather sectors, more than 50 per cent of exports go to the US. Roughly a third of our pharma exports are to the US. So is the case with IT and IT-enabled services,” says Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations (FIEO). While the impact of GSP is being evaluated, India will have to gear up fast to meet the challenge. Biswajit Dhar, a professor of international economics at Delhi’s Jawaharlal Nehru University, says “the tendency to announce unilateral trade restrictions should be kept under check. I am worried that if it is not nipped in the bud, the US will get emboldened to do more”. Economic mercantilism is at the heart of the Trump administration and in the coming months he is likely to show his displeasure if India doesn’t play ball.
HOW INDIA SHOULD DEAL WITH TRUMP
For New Delhi, Trump’s unpredictability and belligerence offer both opportunities and risks. On the one hand, the Trump effect has forced a realignment in major power relations that has opened up new strategic opportunities for New Delhi, particularly with China and Russia. Unnerved initially by the developments on the Korean Peninsula—from Trump’s threat of war to his stunning turnaround—Beijing unusually found itself on the sidelines, to begin with. This coincided with a Chinese effort to mend fences with both India and Japan, as it sought to bring some stability to its periphery. In recent months, there also appear to be signs of a subtle shift in New Delhi’s calculus, evinced in its outreach to China, through the April 28 informal Wuhan summit, which was proposed by PM Modi last summer, as well as an effort to bolster relations with Russia.
“There is perhaps a greater readjustment on the Chinese side than ours,” says former foreign secretary Shyam Saran. “Maybe the unpredictability and uncertainty injected into the regional and global landscape requires them to readjust their policies, and to not leave themselves exposed on too many fronts. There was initially an assumption that Trump can be handled, they were confident enough to deal with the uncertainty. That has been shaken by the developments on the Korean Peninsula. We are also responding to these changes. Maybe our confidence in the JapanAustraliaUS coalition has not crystallised as we’d have expected. We don’t entirely know what the US calculus is going to be.”
As Saran puts it, “A period of flux is also a period of opportunity.” This also appears to be Delhi’s thinking. As a senior official says, India is looking to be “nimble” and “make the most of the present opportunities”. “If this presents us a greater opportunity to do more with China or Russia, we will do it. But this doesn’t mean we will slow down what we are doing with the US or Japan. The idea is to do more with everyone.” At the same time, there are signs that Trump’s unpredictability is giving India some pause for thought. Trump has spoken of wanting to reduce America’s “security burden”, evident in his dismissing what was once seen as crucial USSouth Korea military exercises as a mere waste of money. This comes just as India has overcome what Prime Minister Modi described as “hesitations of history” to forge closer military ties with the US, from a landmark logistics supply deal to last year’s revival of the US, India, Japan, Australia quadrilateral, or Quad, security dialogue. This year, India chose not to invite Australia to join its annual Malabar exercise with the US and Japanese navies.
Srinath Raghavan of the Centre for Policy Research in Delhi says this uncertainty has led to “a wider attempt [by New Delhi] to bring in greater balance in sets of relationships with great powers”. Given the huge swings in US policy, most evident in North Korea, there is a greater sense that New Delhi needs to hedge. “There was a greater tilt to the US from the prime minister’s September 2014 visit to Obama’s January 2015 visit, when he was the chief guest at the Republic Day parade and both sides outlined a joint strategic vision for Asia,” says Raghavan. “Now, there is a feeling that nobody in New Delhi is confident that the US will be a permanently reliable partner. With Trump, the perception is everything will be about a quid pro quo and there’ll be twists and turns we should be prepared for.” Yusuf argues that the Trump administration deals on parallel tracks: “While it could champion the NSG issue for India, it could also come down hard on trade.”
Tellis believes that Trump has introduced a paradox in IndoUS relations. The strategic relationship with the US is in reasonably good shape though some irritants have emerged. Powerful US departments like national security, state and defense remain convinced that India is important for longterm strategic relations. But, as Tellis points out, “Unfortunately, the people who have not got the memo are those who run the US’s economic policy. Not just India, but even for American allies, the economic policymakers are divorced from the imperatives of the security establishment. So we have a schizophrenic administration which is unsettling for those like India that have to deal with the US.”
Like Saran, Tellis believes the Modi government has subtly recalibrated its foreign policy to deal with the uncertainty, lack of continuity and unreliability that the Trump administration projects. He sees the recent moves by Modi to reset relations with China and strengthen relations with Russia as “India taking out an insurance policy where it does not have to solely rely on the US”. Menon thinks that, faced with a chaotic and incoherent US administration, given the frequent changes of key actors that Trump makes, India should get away with the old methods of dealing with the US. “Whatever we want we should go to whoever can deliver in the US—whether the Congress, Pentagon, a business corporation—we are not dealing with a formal state as we knew it in the past. India must do what we want to do regardless of the pressure Trump puts,” he says.
Trump is likely to step up his campaign to prove that he is the greatest dealmaker born. Korea is only the beginning. The Modi government must ensure that India cannot be blindsided.