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The article presents an interview with Dmitry Grozoubinski, a former Australian trade negotiator and diplomat, providing insights into the complexities of international trade relations, particularly concerning the impact of Donald Trump's trade policies on India and the broader global trade order. Grozoubinski's analysis centers on Trump's aggressive negotiation tactics, which he describes as a 'gorilla' approach, and their counterproductive effects on securing trade deals with countries like India. He also addresses the implications of Trump's criticism of India's purchase of Russian oil and the broader erosion of the rules-based order in world trade. Grozoubinski underscores the inconsistency and unpredictability of the Trump administration's trade policies, creating uncertainty and complicating negotiations. This unpredictability stems from the fact that US negotiating teams often lacked clear instructions from the top, making it difficult to finalize agreements. The interviewee also reflects on the potential consequences of US trade policies on the BRICS economic alliance, considering it an opportunity for collaboration. He emphasizes India's growing trade agreements in light of these challenges. The article concludes by exploring Trump's impact on the WTO, with Grozoubinski explaining that the organization is vulnerable to member states' commitment to its rules, and its overall strength. Even as these concerns develop, there is still hope for a future shift away from Trump's disruptive practices.
Grozoubinski characterizes Trump's negotiation style as a power dynamic, where the US, wielding its economic might, seeks to extract maximum concessions from other nations. This 'gorilla' approach, while seemingly advantageous in the short term, often backfires by placing other leaders in politically untenable positions. Modi, for example, whose image is closely tied to strength and defending India's interests, finds it challenging to make concessions under such overt pressure. Grozoubinski argues that Trump's tendency to publicly boast about 'owning' other countries further exacerbates this problem, making it harder for them to make significant concessions. The practical gains achieved through these tactics are often minimal or based on fabricated claims, raising questions about the effectiveness of such an aggressive strategy.
Addressing the controversy surrounding India's purchase of Russian oil, Grozoubinski expresses understanding for India's position. He highlights the rapidly changing geopolitical landscape and the uncertainty surrounding US policy at the onset of the conflict in Ukraine. He notes that Europe, despite investing substantial resources, continues to import significant amounts of Russian oil and gas. Expecting India to abruptly cease its purchases is unrealistic and appears to be a convenient pretext. Grozoubinski, despite his own anti-Russian sentiments, acknowledges the complexities faced by the Indian government in navigating these geopolitical challenges.
Grozoubinski emphasizes the significant difference in scale between traditional trade measures and the tactics employed by the Trump administration. He argues that tariffs are appealing because they are one of the few levers of power that the executive branch can wield unilaterally, bypassing the need for congressional approval. Trump also believes that the American public has accepted the notion that tariffs are paid by foreigners, making them a politically attractive tool. Politicians can exploit the narrative of locals versus foreigners, furthering the allure of tariffs and protectionism.
Grozoubinski acknowledges the erosion of the rules-based order in world trade, particularly with the US adopting unilateral actions. He attributes the WTO's strength to the commitment of its member states to its established rules and underlying principles. The current trend of governments, including India, prioritizing sovereignty and policy space over the predictability offered by the WTO weakens the system. India's growing trade agreements in light of these challenges represent a counterbalance to this trend. However, he expresses hope that the current situation is temporary, anticipating a shift away from Trump's policies in the future. He notes that other countries have not followed suit in violating WTO rules, suggesting a continued belief in the value of a rules-based system, especially given the potential consequences of a lawless trading environment.
Regarding the BRICS alliance, Grozoubinski notes that true regional integration is difficult to achieve, citing the European Union as a rare example. He points out the geographical and political challenges facing the BRICS countries, including border disputes between China and India. He cautions against expecting a level of integration similar to that of the EU. The US is inadvertently strengthening the BRICS alliance through its policies. He emphasizes India's growing trade agreements, and even the first recent Indian leader to visit China. This may represent a shift in global dynamics and may potentially create closer ties between BRICS countries.
Source: Trump’s ‘gorilla’ approach has actually made it harder for India to do a deal