Germany looks eastward as it welcomes Modi

Angela Merkel believes the U.S. and the U.K are no longer dependable and her nation hence has to shift its gaze and find new friends

•A day after warning that Europe can no longer “depend” on its Western partners, the U.S. and the U.K., German Chancellor Angela Merkel met Prime Minister Narendra Modi shortly after he landed in Berlin on Monday.

•Ms. Merkel’s comments are likely to set the atmosphere for her meetings this week with Mr. Modi, followed by Chinese Premier Li Keqiang, who will visit Germany on May 31, as she discusses closer cooperation with leaders from the “East” after her stated disappointment with those from the “West”.

•Mr. Modi and Ms. Merkel, who met informally for dinner at the Schloss Meseberg castle outside Berlin, will address a press conference on Tuesday after the announcement of expected agreements on investment, technology, counter-terror, clean energy and water partnerships as well a joint statement likely to focus on cooperation on global issues such as climate change and UN Security Council reform.

G-20 agenda

•Germany will host the next G-20 summit in Hamburg in July, and Mr. Modi is expected to discuss Chancellor Merkel’s agenda at the multilateral forum.

•Germany is expected to raise issues over trade with India after their bilateral treaty lapsed this year and push for the resumption of the India-EU Free Trade Agreement talks. Mr. Modi is likely to pitch his government’s recent reforms on foreign investment and the rollout of the GST to attract more German investment in India, and take trade beyond its current levels of €17.42 billion.

•“Both (the German and Indian) governments are firmly committed to strengthening economic relations,” Mr. Modi was quoted as saying in an interview with the Handelsblatt newspaper of Germany. “I am very optimistic about our future partnership.”

•After his meeting with Ms. Merkel, Mr. Modi will meet many top CEOs and business leaders to strengthen the push for bettering economic ties.

•While the economy was always expected to top the agenda for the Prime Minister’s Germany visit, it is now likely to be overshadowed by Ms. Merkel’s comments after the just-concluded G-7 summit in Italy as well as the NATO-U.S. summit. The Chancellor told a party convention in Munich on Sunday that the “days when Europe could completely count on others are over to a certain extent”.

•Ms. Merkel was responding to U.S. President Donald Trump’s refusal to commit to the U.N. climate change accord this far, his insistence on more contributions from other NATO partners, as well as Britain’s exit from the European Union.

Concern over OBOR

•In what is being described as her version of the U.S.’s “Pivot to Asia”, Ms. Merkel is expected to discuss closer cooperation with both India and China as part of Europe’s quest for alternative coalitions, raising speculation that the moves could make Germany an unusual new venue for India-China rivalry.

•“It would be wrong to see Germany-India and Germany-China as a zero sum game,” said the spokesperson of the Federal Foreign Office, when asked at a press briefing on Monday in Berlin, ahead of the high level visits. “Improving our relations with any country in the world will not come at the cost of any other.”

•Mr. Modi would also like to discuss shared concerns over China’s Belt and Road initiative that India has refused to join on sovereignty issues. Germany is part of the B&R connectivity initiative, but refused to sign a statement on trade — along with other EU countries — that they said would contravene World Trade Organisation (WTO) commitments.

•“We maintain concerns over China’s ambiguity on free trade commitments and human rights,” conceded a foreign ministry official who didn’t wish to be named. “But the fact is there is no way around China if you want to achieve anything on the global stage in today’s world,” he added, in a possible reference to a bilateral trade partnership of €169.9 billion which saw China surpass both U.S. and France in 2016.

Source.  The hindu��

Regional comprehensive economic partnership

Regional Comprehensive Economic Partnership

What is the issue?

There’s a rush to finalise RCEP this year which is pushing India into covering most tariff lines that destroy its economy.

What is RCEP?

RCEP is being negotiated between India and 15 other countries including the 10-member Asean, Japan, South Korea, New Zealand, Australia and China.
India had very rightly maintained a cautious approach in its FTAs on goods, intellectual property rights, and many new issues such as investment, government procurement and competition policy.

Why RCEP is becoming a disaster for India?

There was clearly huge pressure on India to conclude negotiations this year and to make major concessions in goods, services and investment at the ministerial of the RCEP in Hanoi.
It has the potential to overthrow India’s policies of rural development and industrialisation especially ‘Make in India’, and the promise of the Prime Minister to provide accessible healthcare and medicines to all.
Most important, it threatens the policy flexibility and sovereignty to pursue independent economic, social and environmental policies.
In goods trade, India has already agreed to give up the three-tier tariff reduction proposal that offered different coverage for Asean, Japan and South Korea, and a much lower level of tariff reduction coverage for New Zealand, Australia and China.
In agriculture and allied products, the plantation sector is already reeling from the impact of the India-Asean FTA even with relatively high protection of agriculture and a tariff-coverage of 73-80%.
If tariff cuts cover 92-80% of products, the impact will be huge.
On the other hand, New Zealand’s export-oriented dairy products will decimate India’s growing dairy sector, which is still largely small-scale.
If India has to cut duties on 92% of goods in RCEP, India will face threats from both Asean and China.

What are the other possible threats to Indian economy?

E-commerce commitments, if any, will allow companies such as Alibaba from China to displace Indian manufacturing especially in the SME segment.
Further, India is being asked to eliminate export restrictions on minerals and raw material by Japan and South Korea, which may threaten domestic raw material availability.
India is openly pitching services as its offensive area of interest and may be willing to sacrifice goods tariffs for gains in services.
This can be the most dangerous of India’s current trade policy stance.

India has demands for both Mode 3 (investment) and Mode 4 (movement of people) with a proposal for a RCEP business visa for professionals.
India’s demand for Mode 4 is unlikely to be granted.

What India hopes to gain in Mode 3 for its outward FDI is not clear as it is not competitive in most services except for IT and ITES.

India is under heavy pressure to agree to the investor state dispute settlement provision in RCEP without the safeguards provided in the Model BIT.

The investment chapter in RCEP is also pitching for strong provisions on IPRs.
Agreeing to data exclusivity, extending patent terms and unduly strong enforcement measures will weaken the entire generic medicine sector and take away several health safeguards in India’s Patent Act, notably section 3(d).

This will make medicines inaccessible not only for Indian patients but for those in the entire developing world.

In addition, since India has rightly fought against ‘TRIPS plus’ provisions in its FTA negotiations with EU and European Free Trade Association, there is no rationale for it to change its stance in RCEP.

Source: Business Line

Con of GM mustard

Why in news?

Genetic Engineering Appraisal Committee (GEAC) recently cleared the proposal for genetically modified (GM) mustard.

How effective was Bt Cotton?

Bt cotton promised of higher yield and lower pesticide usage in the 1990s.
Despite increased fertilisers and irrigation, the expectations of enhanced cotton yield have not been realised.
Most of the countries that have higher cotton yields than India do not grow GM cotton.
What are the shortcomings of GM Mustard?

Yield - The yield claims on GM mustard are not very reliable.
U.S. and Canada uses GM mustard.
But the highest yields in mustard are from the five countries which do not grow GM mustard — U.K., France, Poland, Germany and Czech Republic.
Evaluation - The risks to health, environment and agriculture have not been evaluated.
Those inadequate tests which were conducted on Bt brinjal were also ignored, even though mustard is far more extensively grown and consumed than brinjal.
HT (herbicide tolerant) GM crops have been condemned by a number of medical professionals.
Weed - A herbicide-tolerant crop promotes constant exposure to a single herbicide — which eventually results in weeds becoming resistant.
Health - A scientific report from Argentina found a fourfold increase in birth defects and a threefold increase in childhood cancers in HT soya areas.
Studies have shown a strong correlation between growth of GM crops & herbicides used in U.S. and diseases such as acute kidney injury, diabetes, autism, Alzheimer’s and cancers.
Seventeen of the 20 most developed countries — including Japan, Russia, Israel and most of Europe — refuse to grow GM crops.
The millions of poor women who depend on weeding to support their family will be displaced.
Indian will lose its seed diversity and the international competitive advantage of its non-GM mustard.
What should be done?

If India wants to increase its mustard yield rapidly and safely, this can be done by adopting the practice of System of Mustard Intensification.
Successful trials have been done in Bihar through a World Bank and results showed higher yields and better income.

Source: The Hindu
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