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1. India And European Union

What does the strategy paper focus on?

Strategic Partnership

  • It focuses on developing military-to-military relations under which deploying an EU military advisor in the EU Delegation in New Delhi and vice-versa is being considered.

  • It will focus on negotiation of a broader contemporary Strategic Partnership Agreement supplanting 1994 EU-India Cooperation Agreement and intensify dialogue on Afghanistan and Central Asia.

  • Also supports strengthening technical cooperation on fighting terrorism, countering radicalization, violent extremism and terrorist financing

Maritime cooperation-

  • Efforts will be made to identify common interests of both at policy and operational levels to enhance maritime security.

  • It will focus on working with India and other key regional players such as South Africa to help build the capacity of maritime nations in the Indian Ocean and East Africa.

Renewed focus on trade

  • India and EU since 2007 are unable to strike a free trade agreement called Bilateral Trade and Investment Agreement (BTIA) due to incoherent interest of both.

  • The European Union (EU) now is looking at reworking the proposed free trade pact with India called the Broad Based BTIA in a post-Brexit scenario.

  • Deadlock in Broad-based Trade and Investment Agreement (BTIA) India

  • The deadlock is due to issues including India’s pitch for a ‘data secure’ status (important for India's IT sector to do more business with EU firms) as well as to ease norms on temporary movement of skilled workers

  • For India non-tariff barriers such as sanitary and phytosanitary measures, and technical barriers to trade are also a major concern. The EU has been imposing stringent labeling requirements and trademark norms, which have dented India’s exports.

  • Further in terms of trade in services, India demands strong binding promises by the EU on liberalizing trade in service.

  • EU is keen on finalization of an India-EU Bilateral Investment Treaty (BIT) before the re-launch of the FTA talks while India wants to make ‘investment protection’ a part of the negotiations on the proposed comprehensive FTA.

  • There are differences over the EU’s demands on elimination of India’s duties on goods such as automobiles and wines and spirits, further liberalization of multi-brand retail and insurance and opening up of the currently closed sectors such as accountancy and legal services.

  • India’s model BIT and its Investor-State Dispute Settlement Mechanism which allows companies to seek international arbitration only when all domestic options have been exhausted has also been a contentious issue.

  • Though the strategy paper did not mention BTIA, but it aims to negotiate a “balanced, ambitious and mutually beneficial” free trade agreement (FTA) with sufficient level of ambition to respond to each side’s key interests in trade and investment.

  • Political Partnership - This includes reinforcing cooperation on foreign policy, promoting effective multilateralism and building on common values and objectives.

Why this immediate thrust?

  • After the promising beginnings in 2000s, the EU-India partnership lost its momentum as it largely focused on trade and cultural rather than broad strategic and political issues.

  • Europe’s main focus earlier was on China as its key partner and market in Asia while India viewed Europe largely as a trade bloc.

  • But now the new strategic and power realities have pushed the two towards each other.

 

Chinese Challenge

  • China’s increasing presence in Eurasia and South Asia is creating similar security,

  • political and economic concerns for Europe and India. Both are driven by the need to diversify its partnerships and balance. o BREXIT- a new opportunity

  • Both EU and India can seize an opportunity to work without Britain. Brexit is pushing India to look for new ‘gateways’ to Europe, as its traditional partner leaves the union. A renewed trade and political cooperation are the need of the hour. o Fall of the conventional Liberal Trade Order-

  • Trade war, crumbling WTO and break down of TPP etc has made EU understand the economic importance of India.

  • Also for India, EU is one of the largest trading partner (13.5% of India's overall trade with the world in 2015-16), well ahead of China (10.8%), USA (9.3%), UAE (7.7%) and Saudi Arabia (4.3%).

  • India is the EU's 9th trading partner in 2016 (2.2% of EU's overall trade with the world), after South Korea (2.5%) and ahead of Canada (1.9%).

  • With the rise of protectionism by USA, both have opportunity to increase the trade.

Conclusion

  • The EU sees a larger role of India in the regional (Asian) and global security- economic architecture therefore is working on a new strategy with respect to India.

  • Indian multi-alignment approach has made room for reviving India-EU partnership while rebalancing power relations in Eurasia has pushed Europe to carve out its own Asia policy. Hitherto Europe-India partnership was all about trade but now it is finally shifting to a strategic one.

1.1. India-Australia Relations

What is the vision and Why?

  • A three-pillar strategy- The focus of this report is on building a sustainable long-term India economic strategy. The report identifies 10 sectors and 10 states in an evolving Indian market where Australia has competitive advantages, and where it should focus its efforts. These are divided into a flagship sector (education), three lead sectors (agribusiness, resources, and tourism) and six promising sectors (energy, health, financial services, infrastructure, sport, science and innovation).

  • First Pillar - Economic Ties- India is already in the first tier of Australia's diplomatic relations. It has been a high foreign policy priority for at least two decades. But the economic relationship is stuck in the second tier. This vision thus focuses on upgrading ties into full blown economic partnership.

  • Building on India’s Economic Rise- Over the past decade and a half, India’s economic growth, its appetite for resources, energy demand, skill development, technical knowhow and investments have made it an important trade partner and export destination for Australia.

  • Therefore, this strategic vision aims at capturing this rise of India economy. India’s growing economic weight makes it an unavoidable economic partner, despite the challenges in navigating its market. Australian exports to India are expected to grow from 14.9 billion dollars in 2017 to around 45 billion dollars in the next 20 year, and Australian investment to India rise from 10.3 billion dollars to over the 100-billion mark, reflecting a transformational expansion of the relationship. This investment will be spread over various sectors like resources, education, infrastructure etc.

  • The core of the trade ties are energy resources and now Australia is moving forward in providing assured Uranium supply under Civil Nuclear Cooperation agreement which is important for India’s energy security and economic growth.

  • Second Pillar -Geostrategic Engagement Indo-Pacific – A global Strategic region- Recently there is a shift to Indo pacific which is becoming a centre of economic and strategic gravity. With a high volume of seaborne trade passing through the Strait of Malacca, the Straits of Singapore and the Gulf of Hormuz, the region has become a theatre of competing claims and power plays. India and Australia enjoy strategic position in Indo-pacific and therefore are natural allies in the region.

  • Preserving the status quo - Both Australia and India support a rules based international order which currently is under increasing threat. Its defenders are shrinking and its challengers growing.

  • Chinese revisionism- China is continuously revising its power in the region. Blatant disregard for international law, construction of artificial islands, an active defence strategy weaponising capital and trade, and adoption of a military posture that seeks to keep other powers out from parts of the western Pacific is disturbing the balance of power in the. It provides India and Australia an opportunity to be net security providers thereby ensuring rebalancing.

  • Ambiguous American leadership- Though during the Indo-Pacific Business Forum US laid out a partnership based economic engagement in Indo pacific to reassure friends but still the countries have reservations about its America first policy.

  • In the last decade a large scale has been witnessed in the Indian Diaspora in Australia which now constitute 700,000 strong and the fastest growing large Diaspora in Australia. This Diaspora can play a big role to enhance the partnership by creating personal links, in business, arts, education, politics and civil society.

  • Third pillar -Rethinking Culture-thrust on soft power diplomacy

1.1.1 Concerns

  • Dichotomous Australian Foreign Policy- Historically, a key problem with Australia’s bilateral relationships has been the misalignment of Australia’s economic and political-security interests. While Australia is reliant on the US for its defence and security through the Australia-New Zealand-US treaty, its economy depends on China, which accounts for a huge share in bilateral trade and investment.

  • Challenges of Indian Economy- India is too complicated for its growth story to be linear. Canberra has skepticism about India’s economic progress which is constrained by the political compromises demanded by a diverse democratic federation, held back by thinly resourced institutions, burdened by a interfering bureaucracy, dented by corruption and shaped by a political tradition which puts much greater faith in government intervention than the efficiency of markets.

  • Trade implications for India- India and Australia are “too far apart” to conclude the bilateral Comprehensive Economic Cooperation Agreement (CECA) in the near term.

  • Perception of Indo pacific- There is no coherent Indo pacific strategy as countries do not have one definitive vision for the region. It is largely seen as global construct to arrest China’s rise.

1.1.2 Way forward

  • India-Australia needs to formulate a comprehensive shared Indo pacific vision which ensures inclusivity, transparency, openness and a rule based order.

  • India has to remove various governance bottlenecks and ensure speedy engagement. CECA need to be concluded immediately in order to realize the untapped trade potential.

  • Both sides should share the benefits of increased cooperation equally.

2. India-Us Trade Relations

What is Generalized System of Preferences?

  • It is a non-reciprocal preferential tariff system which provides for exemption from the Most Favored Nation principle of World Trade Organization.

  • It involves reduced MFN tariffs or duty free entry of eligible products exported by beneficiary countries (developed countries) to markets of donor countries (developing countries).

  • GSP measure was adopted at UNCTAD Conference in 1968 and later enacted by General Agreement on Trade and Tariff (now WTO) in 1971.

  • The objective of GSP was to give development support to poor countries by promoting capacity development and trade.

  • 11 Developed countries including the US, EU, UK, Japan etc., extend GSPs to imports from developing countries

2.1. Most Favored Nation

  • MFN clause under WTO requires a country to provide any concessions, or granted in a trade agreement to one nation to all other World Trade Organization member countries.

  • It ensures non-discriminatory trade policy because it ensures equal trading among all WTO members.

  • However, in the case benefits are provided under free-trade agreements, like those laid out in the North American Free Trade Agreement, those are not subject to the MFN clause as long as the goods are traded between the participating countries only.

  • U.S. has a particularly strong GSP regime, under Trade Act, 1974. India has been the largest beneficiary of the GSP. In 2017, India’s duty-free export to the US under the GSP was more than $5.6 billion.

  • Now, 50 products (out of a total of 94 products) from India have been removed from GSP particularly impacting handloom and agriculture sectors.

2.2. Impact of GSP withdrawal on India

  • Impact on Current Account Deficit (CAD) and rupee: GSP withdrawal will cost India $70 million in raised duties from GSP benefits. It will reduce the trade surplus that India has against trade with US leading to higher CAD which also runs the risk of further weakening rupee.

  • Impact on MSME and agriculture: Small and medium size business could be impacted. Especially export of handloom made home textiles products are expected to be affected.

2.3. Implications on Oil import arrangement

Oil trade Overall

  • Energy trade anchors the Indo-Iranian relationship, helping to ensure each country gives due consideration to the interests of the other.

  • Iranian exports to India followed these trends in oil trade, peaking in 2008 ($13.8 billion) and 2012 ($13.3 billion) and dropping to a low in 2015 ($6.2 billion).

  • In 2017, Iran provided 11.2 percent of India’s crude oil imports, the third largest source after Iraq (18.6 percent) and Saudi Arabia (17.5 percent).

  • Again the same fear is looming large whereby India has started reducing oil imports. This again tells impermanence in Oil import arrangement of India-Iran jeopardising the energy security of India in particular and India-Iran relations in general.

Impact on Iran

  • Fossil fuels contributed more than 53 percent of Iran’s exports in 2017-18, and accounted for close to 15 percent of its US$ 440-billion Gross Domestic Product. The U.S. has managed to reduce Iran’s oil exports from 2.7 million to 1.6 million barrels a month, according to internal U.S. estimates.

 

Bliss for China

  • The one country that has decided to take the sanctions as an opportunity is China. It has already shown interest in developing transportation and communication infrastructure in Iran. This October, China was the destination for 44 percent of Iranian crude exports, significantly rise from 26 percent in January-June.

  • This is crucial in Beijing’s aim to reshape the global oil market, specifically by greater use of its own currency in oil trade. It fits in conveniently with Iran’s proposed approach to circumventing the sanctions  conducting trade in currencies other than the US Dollar.

2.4. Challenge to autonomous strategic alignment

  • Time and again US has been a major roadblock in full nurturing of India-Iran. US sanctions leads to arm twisting of India as over past years India has become entangled with US foreign policy interests.

  • • This severely puts India in a pickle w.r.t Iran and forcing political downturns (Iran’s support for Kashmir). Also, it pushes Iran to Chinese side thus having huge implications for India strategically and economically (Iran’s support for a non-Indian all open Chabahar port).

 

Way Forward

What India needs to do?

  • It’s high time that India strategically aligns with both countries on an autonomous and need based approach. For this, India has to take bold steps. As a leading power it cannot buckle under pressure of any country.

  • Short term course can be developing alternate mode of payment to Iran and promoting flexibility in investment mode.

  • Carrying out high level talks with US about the security and strategic concerns of India Vis a Vis China.

  • In the long term, India has to keep aligning with the other members of Iran nuclear deal to carry out peaceful solution to end nuclear terrorism. The Iran nuclear deal is a fair deal and US cannot unilaterally end it.

  • The engagement with Iran has to be fastened and the work on various Indian projects in Iran has to speed up. The engagement with Iran has to be moved to a partnership level e.g. development of Farzad B oil site.

  • India also needs to develop a comprehensive energy policy to arrest its west Asian energy dependence.

  • As India has learnt the art of de-hyphenation, its time it brings a consistent and autonomous Iran policy.

 

Collective Effort

  • There is a need to collectively resist American efforts to isolate Iran. Collective bargaining is the key to thwart American unilateralism.

  • America minus implementation of the JCPOA is first step to deal with these sanctions. Also alternate payment arrangement will hugely impact American sanction diplomacy.

 

3. Afghan Peace Conference

Background

  • During the early Cold War, Afghanistan attempted to maintain a non-aligned status, receiving aid from both the Soviet Union and the United States, but ended up relying heavily on assistance from the Soviets.

  • Taliban, ultraconservative political and religious faction that emerged in Afghanistan in the mid-1990s following the withdrawal of Soviet troops and the subsequent breakdown in civil order and were later ousted from power by (NATO led) International Security Assistance Force in 2001.

Russia’s Role in Afghanistan

  • Russian policymakers have extended their hand to the Taliban for the following four strategic reasons: • It reminds the West not to ignore Moscow’s interests in discussions of the Afghanistan agenda at regional and international platforms.

  • It intends to strengthen barriers to US interests in the region.

  • Russia feels a threat from the Islamic State (ISIS) in Afghanistan and in the Middle East, particularly its expansion to the north of Afghanistan into Central Asia and Russia.

  • Afghan opium is another headache for Moscow. Afghanistan supplies 90 percent of the world’s illicit opiates, which are mostly being produced in territory controlled by the Taliban.

  • In a proposal made at the Kabul Process conference in February, 2918, President Ghani offered a ceasefire, the removal of sanctions, release of prisoners, the recognition of the Taliban as a political party, the conduct of fresh elections, and a review of the constitution.

  • The Taliban rejected his overture, declaring that they were ready to engage in direct talks only with the Americans. Taliban considers the US/NATO presence to be a foreign occupation and their main objective has always been to bring it to an end.

  • Now Russia is trying to bring various parties to the conflict in Afghanistan around a table to kick-start a peace process. A previous attempt by Moscow to host Afghan peace talks had failed, after the Afghan government objected, arguing that any such move should be Afghan-led. US and India had also declined to attend.

  • Currently, the talks known as the “Moscow format/Moscow Talks” include a “high-level” delegation from the Taliban as well as a delegation of Afghanistan’s “High Peace Council (HPC)”, along with representatives of 12 countries. First time an Indian delegation, in unofficial capacity, also has represented India. While the United States embassy in Moscow also sent a representative to observe the discussions.

3.1 India’s Participation

  • On one hand there are views saying that India’s participation in the conference is a departure from it earlier stance where it held that any peace talks should be Afghan-led, Afghan-owned, and Afghan-controlled and with participation of the government of Afghanistan. While on the other hand there are many countering this view by showing that India has already participated in the earlier ‘Moscow Format’ by retired officers.

  • The reasons behind India’s decision to participate are seen to be-

  • The current policy needs to be recalibrated in accordance with the changing regional and global power dynamic. It is part of this reassessment that saw India participating in the multilateral conference in Moscow despite its aversion to any engagement with the Taliban.

  • Essentially, India has bowed to the inevitable since the US, Russia, China and even the Afghan government have all indicated that they are ready to talk with the Taliban.

  • Also, in participating in these talks, India takes the view that since the Afghan government, through the High Peace Council, is present, there should be no problem. The HPC is a government body responsible for reconciliation efforts with the Taliban.

  • The decision was the outcome of “close discussions with the Afghanistan government,” and it was felt necessary for India to have a “presence” there.

  • Russia’s invitation to India to participate in Moscow talks is a recognition of India’s stakes and its role. India’s engagement demonstrates commitment to the idea of a stable, independent and peaceful Afghanistan.

Conclusion

  • Given Russia’s overarching security interests, align with Afghan and American objectives, engaging with the Taliban for humanitarian causes and the initiating of a peace process is inevitable. However, Russia’s peace-making efforts must meet Afghanistan’s needs, which include initiating negotiations, achieving a political solution, and ultimately peace, and then maintaining that peace. This entails encouraging the Taliban to the negotiating table without undermining the Afghan government. Afghanistan can only achieve and maintain peace when the Afghan state is capable of governing, accountable to its citizens and acts as a responsible member of the international community.

4. G-20 SUMMIT

Background

  • In 2009, the global financial crisis led to the formation of G20 as a platform for major economies to coordinate policies with respect to global finances.

  • Today the challenges that the economies face range from protectionism to trade war to slowdown in economic growth to oil price volatility to disenchantment with Globalization.

  • Amidst this, G20 summit holds significance particularly for developing countries like India.

4.1.India at G20

  • India took to the task of managing these global challenges through a multidimensional approach in congruence with its national interests. Major News Highlight were-

  • 9 point agenda- India presented a 9 points agenda whereby G20 countries should cooperate to take action against fugitive economic offenders. Important takeaways include-

  • Collaboration at legal level- Often incoherence in legal processes of countries is seen as an inefficient way in acting against economic offenders therefore India has called for streamlining the legal process by effectively freezing of the proceeds of crime, early return of offenders and efficient repatriation of the proceeds of crime.

  • Reinforcing UN principles- India has suggested that all principles of UNCAC (United Nations Convention Against Corruption) and UNOTC (United Nations Convention Against Transnational Organized Crime), particularly the International Cooperation should be fully and effectively implemented.

  • Upgrading FATF- India has asked for stronger cooperation that FATF should observe for information exchange among financial units and competent authorities. Also, FATF should formulate a standard definition of fugitive economic offenders.

  • FATF should also develop a common SOP (standard operating procedure) related to identification, extradition and judicial proceedings for dealing with fugitive economic offenders to provide guidance and assistance to G20 countries, subject to their domestic law.

  • Promoting Multilateralism- India advocated strengthening of global governance institutions like WTO. It emphasized on the need to reform WTO to be able to carry out free and fair trade especially forming global value chain in Agriculture sector. India also promoted regional stability and cooperation through BRICS, SCO, East Asia summit etc.

  • Balancing act-Summit level diplomacy- India used G20 as a platform to showcase it emerging power status thereby conducting trilateral meetings independently for the first time simultaneously at the summit level. This strategic autonomy manifested in the form of Russia-India- China (RIC) meeting or Japan- America –India (JAI) meeting is a new feather in India’s independent foreign policy conduct.

 

FATF

  • The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.

  • The FATF Secretariat is housed at the OECD headquarters in Paris.

  • FATF consists of thirty-six members (including India) and two regional organizations, the European Commission and the Persian Gulf Co-operation Council.

5. Asia Pacific Economic Cooperation

5.1. More on news

  • This was first such instance in the history of APEC when a consensus could not be achieved on final declaration.

  • The unprecedented impasse blamed on tensions between China and the United States presents an opportunity of Asia Pacific Economic Cooperation

  • Established in 1989 APEC is an inter-governmental forum for 21 Pacific Rim member economies.

  • APEC aims for regional economic integration by promoting balanced, inclusive, sustainable growth.

  • Admitting India as a member — both in recognition of the country's status as a major market and as a means to avoiding a similar impasse in future.

5.2. Current relation between India and APEC

  • India was allowed in APEC summit in 2011 as an observer state.

  • Although India has been attempting to join APEC since 1993, but still has not got the membership as: o India’s geographical location isn’t conducive for India’s membership in APEC as India does not border the Pacific Ocean.

  • Some APEC members have expressed concerns that India’s inclusion could shift the focus of the grouping away from its Pacific Rim.

  • India's economic policies are generally considered as protectionist and inward which is considered against the liberalized and free market principles of APEC.

  • India’s record in trade negotiations, bilaterally as well as in the World Trade Organization (WTO), has made some APEC economies concerned that including India would slow momentum for achieving the forum’s objectives

  • In 1997 a moratorium on membership was put in place for a ten-year period which was extended further till 2010. However currently there is no moratorium on membership.

Why India belongs to APEC?

New challenges to APEC in changing geopolitical situations

  • New trade agreements: Emerging trade regimes like Comprehensive and Progressive Agreement for Trans-Pacific Partnership or Regional Comprehensive Economic Partnership (RCEP) are throwing challenges to the dominance and existence of APEC.

  • Changing view of Asia-Pacific: View of Asia-Pacific as a geographical entity has changed over time and integrated with Indian Ocean Region to develop a single entity of Indo-Pacific.

  • China’s assertiveness: In recent times China has adopted an aggressive posture in Asia Pacific region (South China Sea) and even violated international norms and laws (UNCLOS).

  • Changed US policy: Trump administration has adopted inward looking policies e.g. it pulled out from Trans-Pacific Partnership (TPP) and focuses more on transactional relationships.

  • Change in regional power dynamics: USA’s economic leverage in Asia has receded at the time China’s trade and investment links Belt and Road Initiative have increased.

Economic angle:

  • Size of Economy: India is 6th largest economy of World and 3rd largest economy of Asia. Also as the world’s fastest-growing major economy, India represents a significant long-term source of growth for the world economy. This mandates an economy based forum such as APEC to take cognizance of India.

  • Opportunities in India: India is projected to be the world's third largest economy by 2030 and will need well over $1 trillion of investment in infrastructure over the next decade. Its burgeoning middle class, estimated to number 450 million in 2030, will offer huge opportunities for APEC countries which are experiencing sluggish growth.

  • Changed Conditions: At the time of inception of APEC (1989), India had not liberalized and was out of sync of APEC economic principles. However, India starting from 1991 has liberalized and India’s trade stands at 40% of GDP now. India even has extensive trade relations with all the APEC member economies.

  • Strengthening Economic Integration: Emerging trade regimes could create gaps between the standards and policies adopted by their members and those pursued by non-members. By including a key economy such as India, APEC can play a constructive role by helping bridge such gaps.

  • Alternative to China: For APEC members, greater integration with India could offer an alternative source for manufacturing goods. Also India’s large labor market (largest in the world by 2030), will help offset the impact of aging populations and shrinking work forces in APEC economies and offers advantages for sourcing services — in IT, financial services, etc.

Strategic angle:

  • Strategic Balance: Inclusion of India could bring a strategic balance and ease the tension within the grouping. India’s record of Non Alignment could bring confidence among the smaller members of APEC amid the impasse between USA and China. Especially, joint efforts of Japan, India and Australia could reduce tension between US and China.

  • Political counter weight to China: As a major power in the Indian Ocean, India could provide a balancing counterweight to China for smaller Asian countries that may be wary of the alternative hard stand provided by the US.

  • New Indo-Pacific policy of USA: USA under Trump regime has changed the view of Asia Pacific to Indo-Pacific. Inclusion of India in APEC is in coherence with the new approach of US in the region.

5.3. Benefits to India

  • Act East Policy: For further strengthening of economic ties of India East and Southeast Asia through higher trade volumes and greater physical connectivity, APEC membership streamlines the process by standardizing the trade related negotiations.

  • Creating Synergy: Through its processes and guidelines, APEC will facilitate India’s implementation of the economic reforms, boost competitiveness and the ease of doing business. APEC membership would also help India prepare for potential inclusion in emerging trade agreements such as TPP (now CPTPP), if India considers joining these in the future.

  • Economic Growth: India’s current economic program relies on greater access to foreign markets, investment sources, and value chains to bolster manufacturing and create jobs at home.

  • India-US Relations: Supporting India’s APEC bid would demonstrate an American commitment to help strategic partner India gain the greater role in institutions of global governance.

Way forward

  • Diplomatic investment: To gain support of its candidacy of APEC, India needs to work diplomatically with key members like United States and Japan. Also, India could ask China, Korea, Australia, and Vietnam to provide vocal support and diplomatic resources to India’s cause.

  • Extensive Study before inclusion: APEC could commission studies assessing the benefits and costs of Indian accession which will help its members to develop consensus on the question of Indian membership.

  • Transitional membership: Before providing full membership of APEC a transitional membership could be provided. Transitional memberships could gradually integrate India in ways that satisfy current members and allow India to benefit from APEC’s processes and technical support.

6. East Asia Summit

6.1. About East Asia Summit (EAS)

  • It is an annual meeting of regional countries which was started in 2005. It is an ASEAN-centred forum which can only be chaired by an ASEAN member.

  • The members include 10 Association of South East Asian Nations (ASEAN) nations plus 8 other nations such as Australia, China, India, Japan, New Zealand, South Korea, Russia and the US.

  • The EAS membership represents around 54% of the world's population and accounts for 58% of global GDP.

  • There are six priority areas of regional cooperation within the framework of the EAS. These are –

  • Environment and Energy,

  • Education, Finance,

  • Global Health Issues and Pandemic Diseases,

  • Natural Disaster Management,

  • ASEAN Connectivity.

6.2. East Asia Summit acts as a bridge for Indo-Pacific region

  • Reaffirms India’s diplomatic engagement: East Asia Summit has provided a relatively bigger platform (due to participation of 18 countries) to India for better endorsement of Act East Policy, and historical, cultural and economic linkages with East Asian Communities.

  • Balancing the role of China: Majority of EAS participant countries like Singapore, Vietnam and Indonesia are embracing India’s role of balancing China on the front of Indian Ocean region and collaboration with other stakeholders’ countries on South China Sea.

  • Thrust to Regional Comprehensive Economic Partnership: It provides a platform to India for rebalancing the Asia strategy and an acknowledgement of linkage between the Indian and Pacific Oceans.

7. BREXIT

What is Brexit?

Arguments in favor of Brexit

  • Trade benefits- UK feels that it can secure better trade deals with important countries like US, China, India.

  • Arresting reckless spending-Britain can stop sending £350 million (equivalent to half England’s school budget), to Brussels every week. This money could be spent on scientific research and new Industries.

  • New Immigration laws- Some believe that leaving EU could help Britain reform its immigration policies which currently is expensive and ungovernable hence can offer an open door to EU and non EU immigrants, who could contribute to Britain’s economy.

  • Reasserting National sovereignty-Those in favor of Brexit argue that leaving EU would allow Britain to recapture its lost position in international bodies hitherto captured by EU.

7.1. Terms of agreement of the deal

  • A draft 585-page agreement on Britain's withdrawal from the European Union is a legally-binding text that sets out the terms of the UK's departure. It includes:

  • Commitments over citizens' rights after Brexit - people will be able to work and study where they currently live, and to be joined by family members

  • A 21-month transition period after the UK's departure, to allow time for trade talks

  • The UK would continue to follow all EU rules during this period in order to give governments and businesses more time to prepare for long term changes

  • A "fair financial settlement" from the UK - also known as the £39bn "divorce bill"

  • A "backstop" arrangement to keep the Irish border unmanned if trade talks don't come up with a way of avoiding that happening.

7.2. Arguments against Brexit

  • Trade Imbalance: Britain avoids exporter tariffs and red-tape, which is important because nearly 45% of its trade goes to EU. Another benefit is that being a member, Britain can obtain better trade terms, because of the EU’s size. Brexit would damage Britain’s export competitiveness.

  • EU Budget: The benefits outweigh the costs. According to the Confederation of British Industries UK’s annual contribution to the EU is equivalent to £340 for each household but trade, investment, jobs etc leads to £3,000 per year benefit to each household because of EU membership.

  • Immigration: Leaving EU will not stop immigration to the UK. Migration crisis especially refugee crises is a global issue requiring global efforts it’s not a country specific problem.

7.3. Brexit consequences on EU:

  • Trade buoyancy- Disintegration of largest single market and labor market will hugely impact trade patterns and global value chains.

  • The EU’s share in global exports of goods and services at current prices and exchange rate will fall from 33.9% to 30.3 percent. In terms of world GDP, in purchasing power parity, the EU share will decrease from 17.0% to 14.6%, and in current international dollars from 23.8 to 20.0 percent.

  • Geopolitical standing -EU will become smaller and weaker both in economic and geopolitical terms. It will become less united and may lead to further exit referendums e.g. GREXIT. Further it may be less vocal and influential in dealing with global issues and loose the bargaining power. Economic crisis may get deep with far reaching effects on EU as a regional organization.

  • Globalization- Restricting the free movement of people, goods and services may lead to increased xenophobia and de-globalization.

November International Relations

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