Prez Trump Unlikely To Make Global Leaders Fall In Line With His ‘Whistles’

The WTO provides developing countries with Special Safeguard Measures (SSM) and there is a reason behind it. Each country, however powerful it may be, must respect to safeguard other countries' need for protecting its food security, farm livelihood, and rural development concerns

When I was a young student at Sainik School, Kapurthala (in Punjab), I was always keen to become a School Prefect. What fascinated me was not only the opportunity to become a head boy of the school but the authority it would provide me to blow a whistle and call the school to 'fall in line' – means, the boys would immediately scramble and stand in three lines, all in attention and awaiting the next directive.

I am not sure whether the 47th US President, Donald Trump, has ever been to a military school, but I see in him the urge to establish himself as the Prefect of the international leadership. Perhaps he too is fascinated by the unique authority that is vested in him, being the head of the most powerful country in the world, that he thinks he can blow a whistle anytime he likes, and thinks the global leadership would scramble, plead, and eventually 'fall in line'. But he forgets, that in a military school, it is hierarchy and discipline that is sacrosanct, but in international relations, you can carry everyone (or most people) along, which depends a lot on the leadership ability you demonstrate and the vision you carry.

Ever since Trump was sworn in as the US President on Jan 20, he has been blowing the whistle quite frequently. With Elon Musk as the cheerleader, most times by his side, he thinks the world can be easily made to 'fall in line'. Let me start with a historical reminder. When Bill Clinton was the US President, he made a statement, saying something like this: "China has a bad human rights record and therefore, the US will not be trading with the Asian giant." A couple of days later, I happened to switch on to BBC World TV and watched a journalist asking the then-Chinese President how he thought the country would respond to the US threat. The Chinese President was cool and said:

"Trading with America. We haven't traded with America for the past 4,000 years. So how does it matter?" This small response made the US industry stand up in a frenzy, forcing the US President to never again talk of human rights in China. Already as we know Trump's threat against two of his key trading partners - Canada and Mexico - have caused widespread alarm. These two neighbours of the US may not be in a position to counter with retaliatory tariffs that hurt and eventually forces the US to backtrack, but let us also not live in an illusion that all that is well for the US industry is also good for the world.

Although Trump plans to impose tariffs on Canada and Mexico, and also slap an additional 10 per cent tariff on China, beginning Mar 4, primarily to stop the 'unacceptable' import of illicit drugs such as fentanyl it has already thrown the global economy into turmoil. This of course is just the beginning. He has also announced to launch the next phase of retaliatory tariffs on April 2, which is going to be much tougher given that these tariffs will match the tariffs other countries are imposing on American goods. To Europe, he has already made it clear that 25 per cent higher tariffs will be imposed. Put together, the tariff war that the US plans to aggressively launch will affect the auto, computer, steel, aluminum, pharmaceutical, cotton, soybean, and farming sectors among others.

For all practical purposes, the tariff war that Trump plans to launch will subsume the multilateral World Trade Organisation (WTO). If one country disregards the globally agreed WTO obligations and commitments, and goes on arbitrarily fixing the tariffs, claiming that these tariffs are 'fair and retaliatory', how long will the world continue to follow the new trade dictates' coming from one country?

Whether we like it or not, country after country will like to pull out of the international trade body in the months to come citing one reason or the other. Sooner than later, WTO will go into history. But before we go any further, it is important to know that retaliatory tariffs are certainly not a good idea because after all these tariffs depend on the level of development each country has achieved. It wouldn't be fair for instance to blame India for higher tariffs on agricultural products, which presently stand at 39 per cent, simply because it needs to protect its farming sector from a surge in imports from the rich and developed countries, which are notorious for heavily subsidizing its farm sectors. In the case of the US, the tariffs it has set are much lower at 4 to 5 per cent. Bringing our tariffs in tune with US tariffs is neither workable nor acceptable and the reality is that opening agriculture to US dictators would mean the beginning of an end of our domestic agriculture.

Take the case of the dairy sector. Even in the US, the big dairy firms have forced nearly 93 per cent of the small dairy farm to pull down shutter since the 1970s. Although milk production has gone up in America, with the large number of sophisticated small dairy farms closing down over the years, the US would like to force India to open up its dairy sector. With the highest milk production level in the world, presently at 225 million tonnes, India will still not be able to stop the flooding of the domestic market with imported milk if the tariffs were to be lowered. The US has already been pushing Canada, Mexico, and many African countries to open up for milk imports. Not only nutritional security, India would like to ensure protection for the dairy sector, which acts as a lifeline for Indian farmers. It is primarily for this reason that the Prime Minister had earlier pulled out from the negotiations underway at the Regional Comprehensive Economic Partnership (RCEP) treaty.

There is a lot to learn from the way the US has been protecting its monumental subsidies being provided to its cotton growers. In an article, entitled: "What caused WTO to collapse? It was cotton subsidies, stupid!" (Institute for Agriculture & Trade Policy, the USA, Aug 8,6, 2008) I had written: "Ever since the cotton issue erupted on the international scene just before the 2003 Cancun Ministerial, the US has received flak for protecting its 20,000 cotton growers as a result of which millions of cotton growers in the four African countries - Benin, Burkina Faso, Mali, and Chad - continue to languish in poverty. The disastrous impact is also being borne by Indian cotton farmers who are priced out." This story needs to be told time and again to ensure that global agriculture does not become a victim of the US hegemony.

The WTO provides developing countries with Special Safeguard Measures (SSM) and there is a reason behind it. Each country, however powerful it may be, must respect to safeguard other countries' need for protecting its food security, farm livelihood, and rural development concerns. If it was a letter in the New York Times by Heads of State of four western African countries that pushed cotton subsidies on the top of future WTO negotiations, I don't think this time the world would remain a mute spectator to the US corporate interests.

(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)