Feature Article

USA, China agree on 90-day ceasefire on trade war, India to reaffirm US defence ties

[TamilNet, Sunday, 02 December 2018, 14:45 GMT]
Unlike the Asia-Pacific Economic Cooperation (APEC) summit that ended without a final statement amidst US-China disagreements in Papua New Guinea two weeks ago, the summit of 20 powerful economies of the world (G20) has concluded in Argentina with consensus among the capitalist actors resolving to “strengthening the global financial safety net with a strong, quota-based, and adequately resourced IMF at its centre.” The G20 has also resolved to reform the World Trade Organisation, which has been viewed by US President Donald Trump as something designed by the rest of the world to screw the USA. While the G20 vowed to “improve a rules-based international order,” Mr Trump has agreed with Chinese President Xi Jinping to begin negotiations on structural changes to resolve longstanding trade disputes within the next 90 days, which is seen as a ceasefire on trade war between China and the USA.

Trump - Xi Jinping meet
[Photo courtesy: Kevin Lamarque/Reuters]

What has taken place on the ground as far as South Asia is concerned is that the USA has strengthened its foothold in the Indian Ocean Region outsourcing the security matters to India as its major strategic partner to look after the smaller state actors through the Bay of Bengal Initiative.

This approach is shaped through what is known as the “Better Utilization of Investments Leading to Development Act” (BUILD Act).

At the same time, the US Indo Pacific Command (USINDOPACOM) expects military-to-military engagements through annual Cooperation Afloat Readiness and Training (CARAT) maritime exercise to military-to-military engagement with the Bay of Bengal states and the largest international naval warfare exercise known as the Rim of the Pacific Exercise (RIMPAC). The SL Navy joined the RIMPAC for the first time in 2018.

In the meantime, SL Navy Commander Vice Admiral Sirimevan Ranasinghe and SL Army Commander Lt. Gen. Senanayake along with other SL military officers attended a lecture by Pakistan's High Commissioner Dr Shahid Ahmad Hashmat at an event organised by SL Association of Retired Flag Rank Officers (ARFRO) on Friday the 30th November. The lecture was on China Pakistan Economic Corridor (CPEC) and was titled: “A New Vision for Regional and Global Connectivity and Economic Cooperation”.

Pakistan's High Commissioner in Colombo was describing CPEC as a framework of regional connectivity. He said it would not only benefit China and Pakistan but will have a positive impact on Iran, Afghanistan and Sri Lanka amongst others in the region.

Meanwhile, Indian Defence Minister Nirmala Sitharaman has left New Delhi Saturday night and is headed for the USA to reaffirm the bilateral defence partnership and to discuss the last remaining foundational agreement, the Basic Exchange and Cooperation Agreement(BECA). Sitharaman will be meeting her US counterpart Jim Mattis on December 3. She is also expected to visit the USINDOPACOM headquarters at Honolulu in Hawaii during her 5-days trip, according to Indian media reports.

Press Trust of India, on Sunday, reported that the top officials of the Indian Foreign Ministry led by Indian Foreign Secretary Vijay Keshav Gokhale, are set to brief a parliamentary panel on India-Sri Lanka relations on December 14. Rahul Gandhi, the chief of the Congress party, is a member of the Parliamentary Standing Committee on External Affairs, which is set to pose questions about the ongoing political crisis in the island “as the stability in the island nation is in India's interest especially from the security point of view,” the PTI report said.

At this juncture, Eezham Tamils, as a stateless nation and Tamils in general as a people having no role in the international state-order, should be concentrating on a strategy aimed at creating a de facto situation to protect their rights-based interests, Tamil political activists in Jaffna commented.

The Tamils should be joining hands, also with other stateless nations and peoples, to shape their future without allowing them to be exploited by the actors locked in the trade war,

Trump - Xi Jinping meet
[Photo courtesy: Xinhua]

US President Donald Trump has agreed with Chinese President Xi Jinping that on January 1, 2019, “he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time,” a statement from the White House said on Saturday.

Both the parties have agreed to immediately begin negotiations on structural changes to resolve longstanding trade disputes, and they decided to complete the negotiations within the next 90 days.

If the negotiations didn't end as expected, the USA would be increasing the 10% tariffs to 25%.

“Cooperation is the best option for the two countries,” Chinese President Xi Jinping was quoted as saying by Chinese news agency Xinhua.

“China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” the White House statement further said.

In September, the USA announced its first round of 10 per cent tariffs on $200 billion of Chinese products. China retaliated with its decision to raise tariffs on $50 billion of US products.

Before the meeting, scheduled during the G20 Buenos Aires summit and termed by media as high-stakes trade talks between the two biggest geopolitical rivalries of the world, Donald Trump had threatened to escalate the tariff battle to another level by involving further $267 billion of Chinese imports. The USA imports much more than China does from its counterpart at the moment.

“China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs, including marketable products from the United States, to gradually ease the imbalance in two-way trade,” China's top diplomat, State Councillor Wang Yi, was quoted as saying by Reuters.

External Links:
The White House: Statement from the Press Secretary Regarding the President’s Working Dinner with China
G20.org: G20 Leaders’ 2018 declaration
The Times of India: Nirmala Sitharaman headed for US to reaffirm strategic ties
Financial Express: BECA to be inked soon between India & US? It is topping Sitharaman’s agenda in US next week
Outlook India: MEA officials to be questioned by parliamentary panel on political crisis in Sri Lanka
Hindustan Times: Predator drones on top of Nirmala Sitharaman’s agenda in US visit
Urdu Point: CPEC Is Framwork Of Regional Connectivity: High Commissioner Of Pakistan In Colombo



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