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Calling out American trade illegality
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Context
The U.S. announced reciprocal tariffs, bypassing WTO rules, though implementation was paused for 90 days (except for China). This move has triggered global backlash over violation of WTO's Most Favoured Nation (MFN) principle, while India has remained notably silent, despite positioning itself as a leader of the Global South and supporter of multilateral trade norms.
Global Response to U.S. Trade Illegality
- Violation of WTO Principles: U.S. tariffs openly undermine the MFN principle, a core tenet of WTO law. Countries like Singapore, Brazil, and China have explicitly labelled the tariffs as a repudiation of global trade rules.
- Assertive Legal and Trade Countermeasures: Nations such as China, Canada, and Japan have taken legal and retaliatory action. China filed a WTO dispute and imposed counter-tariffs; Canada challenged U.S. tariffs on automobiles before WTO tribunals.
- Mixed Diplomatic Reactions: While some countries (e.g., Fiji, Italy) described the tariffs as “unfair” or “a mistake,” others have avoided direct legal or diplomatic condemnation, weakening global solidarity on rule-based trade.
India’s Ambiguous and Passive Stance
- Silence Despite Legal Clarity: India has not issued a strong public statement nor joined 40 other WTO members supporting multilateralism, despite clear violations by the U.S. under WTO obligations.
- Bilateral Trade Negotiation as Justification: India’s hesitation is attributed to ongoing Bilateral Trade Agreement (BTA) negotiations with the U.S. However, this is inconsistent as the U.S. has repeatedly criticised India's tariffs during similar negotiations.
- Missed Opportunity for Diplomatic Assertion: India’s silence undermines its image as a defender of Global South interests and weakens its claim to leadership in creating a fair trading order, especially when China and Canada act despite WTO dysfunction.
Legal, Strategic, and Normative Implications
- WTO Dispute Settlement Crisis Not a Justification: Though the Appellate Body is defunct, filing disputes still signals rule-of-law commitment; legality is not only about outcomes but normative legitimacy and challenging arbitrary power.
- Strategic Costs of Non-Alignment: India’s silence may be perceived as strategic appeasement, leading to loss of credibility among developing nations who expect India to lead coalitions defending multilateral rules.
- Erosion of India’s Trade Diplomacy Ethos: India, traditionally vocal on equitable global trade, risks diluting its long-standing advocacy for multilateralism, thus compromising both its strategic leverage and normative standing.
Practice Question
Q. “India’s passive stance on U.S. reciprocal tariffs reflects a strategic inconsistency between its global trade rhetoric and diplomatic conduct.” Critically examine this in light of India’s commitment to multilateralism and leadership of the Global South.More Articles
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