Day 51 – Q 2.What implications can the ongoing retreat of multilateralism and global trade war have for India? Examine.
2. What implications can the ongoing retreat of multilateralism and global trade war have for India? Examine.
बहुपक्षवाद और वैश्विक व्यापार युद्ध के पतन का भारत पर क्या प्रभाव पड़ सकता है? जांच करें।
INTRODUCTION
Global dynamics have changed from robust borders, importance given to national boundaries from the times of Treaty of Westphalia to a border less and interconnected world due to globalization & increased inter dependence. This increased interconnectedness lead to increase in economic growth & augmented global peace. However, recently events like Great Britain’s exit from EU, USA’s exit from TPP, visa restrictions in the US, protecting the borders from refugees has led to increased protectionism.
BODY
The increased race of protectionism and retreat of multilateralism has lead to questioning of the entire concept of liberalization. It is indicating increased importance of nation states, reduction of multilateralism and showing that the model of global village was probably not sustainable. However, the question lies in whether it is the failure of the concept or changed political narrative developed for appeasement.
Retreat of multilateralism will affect India’s stakes in the following domains-
- Prolong impact on India’s relations with USA
- Change of India’s dynamics with EU countries- also reduced homogeneity of relations with all countries of the EU.
- Impact on the Jobs of IT workers in the USA.
- Effect on the Indian stakes related to security, sovereignty, economic and geo strategic stakes
The implications of the retreat of multilateralism leading to increased trade war, can have the following effects on India-
- Disturbance in Political relations
- Indian relations with USA,EU are mostly dependent on the bedrock of economic exchanges, reduced economic exchanges will affect the relations related to policy, government to government exchanges, issues related to security issues limitations etc.
- Hindrance to Indian economic growth rate.
- Indian trade has started to flourish on the export side off late, hindrances to the trade exchanges will reduce the global competitiveness in trade for Indian manufacturers.
- It will mean reduced economic gains from remittances, reduced import of raw material etc.
- It will affect the macroeconomic fundamentals as well as economic prosperity.
- Geo strategic implications
- Projects like “Belt and Road Initiative” of China are affecting Indian geo strategic interests.
- Increased Chinese projects will change the orientation of countries of Indian neighbourhood from pro India to pro-China.
- Effect on Climate Change
- It is going to affect most of the poor countries the most.
- It needs a collective effort from all countries of the world.
- Withdrawal of countries like USA from treaties like the Paris Climate Deal, is going to have a huge negative impact on poor countries and global effort to fight climate change.
- Implications on Global Power Structure.
- The balance of power will be adversely affected.
- Once again it can lead to division of the world into different blocs.
- Reduced economic dependence can lead to accumulation of weapons and nuclear arsenal.
However, protectionism and retreat of multilateralism can also have positive implication in the long run like-
- It could prove to be beneficial for India’s domestic market in the long run.
- It may lead to reverse brain drain, the skilled labourers and professionals might return to India, due to lack of opportunities and visa restrictions.
- With USA’s protectionism, India can fill up the space previously occupied by USA in various sectors like Textile, Pulses etc.
- There is a chance of rise of regional FTA’s
CONCLUSION
Hence, although retreat of multilateralism can have some positive effects for India in the short term, overall the negatives related to it are quite disastrous and it could mean end of the liberal world order and increased importance to boundaries, which is not sustainable due to increased interdependence and globalization. The need is to combine individual benefit of nations with the larger global peace and peaceful trade leading to prosperity of all.
BEST ANSWER: JOHN NASH
