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India Torpedoes Us/western Trade Hegemony

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It seems to me that this is an important story.

http://www.zerohedge.com/news/2014-08-01/india-slams-us-global-hegemony-scuttling-global-trade-deal-puts-future-wto-doubt

Yesterday we reported that with the Russia-China axis firmly secured, the scramble was on to assure the alliance of that last, and critical, Eurasian powerhouse: India. It was here that Russia had taken the first symbolic step when earlier in the week its central bank announced it had started negotiations to use national currencies in settlements, a process which would culminate with the elimination of the US currency from bilateral settlements.

Russia was not the first nation to assess the key significance of India in concluding perhaps the most important geopolitical axis of the 21st century - we reported that Japan, scrambling to find a natural counterbalance to China with which its relations have regressed back to World War II levels, was also hot and heavy in courting India. “The Japanese are facing huge political problems in China,” said Kondapalli in a phone interview. “So Japanese companies are now looking to shift to other countries. They’re looking at India.”

Of course, for India the problem with a Japanese alliance is that it would also by implication involve the US, the country which has become insolvent and demographically imploding Japan's backer of last and only resort, and thus burn its bridges with both Russia and China. A question emerged: would India embrace the US/Japan axis while foregoing its natural Developing Market, and BRICS, allies, Russia and China.

We now have a clear answer and it is a resounding no, because in what was the latest slap on the face of now crashing on all sides US global hegemony, earlier today India refused to sign a critical global trade dea. Specifically, India's unresolved demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline.

WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight that "we have not been able to find a solution that would allow us to bridge that gap."

Reuters reports that most diplomats had expected the pact to be rubber-stamped this week, marking a unique success in the WTO's 19-year history which, according to some estimates, would add $1 trillion and 21 million jobs to the world economy.

Turns out India was happy to disappoint the globalists: the diplomats were shocked when India unveiled its veto and the eleventh-hour failure drew strong criticism, as well as rumblings about the future of the organisation and the multilateral system it underpins.

Shockingly, and without any warning, India's stubborn refusal to comply with US demands, may have crushed the WTO as a conduit for international trade, and landed a knockout punch when it comes to future relentless globallization which as is well known over the past 50 or so years, has benefited the US first and foremost.

"Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes," Australian Trade Minister Andrew Robb said on Friday. "There are no winners from this outcome – least of all those in developing countries which would see the biggest gains."

Broke, debt-monetizing Japan, which as noted previously, was eager to become BFFs with India was amazed by the rebuttal: "A Japanese official familiar with the situation said that while Tokyo reaffirmed its commitment to maintaining and strengthening the multilateral trade system, it was frustrated that such a small group of countries had stymied the overwhelming consensus. "The future of the Doha Round including the Bali package is unclear at this stage," he said."

Others went as far as suggesting the expulsion of India:

Some nations, including the United States, the European Union, Australia, Japan and Norway, have already discussed a plan to exclude India from the agreement and push ahead, officials involved in the talks said.

However, such a move would clearly be an indication that the great globalization experiment is coming to an end: "New Zealand Minister of Overseas Trade, Tim Groser, told Reuters there had been "too much drama" surrounding the negotiations and added that any talk of excluding India was "naive" and counterproductive. "India is the second biggest country by population, a vital part of the world economy and will become even more important. The idea of excluding India is ridiculous." ... "I don't want to be too critical of the Indians. We have to try and pull this together and at the end of the day putting India into a box would not be productive," he added.

And yes, the death of the WTO is already being casually tossed around as a distinct possibility:

Still, the failure of the agreement should signal a move away from monolithic single undertaking agreements that have defined the body for decades, Peter Gallagher, an expert on free trade and the WTO at the University of Adelaide, told Reuters.

"I think it's certainly premature to speak about the death of the WTO. I hope we've got to the point where a little bit more realism is going to enter into the negotiating procedures," he said.

But the one country that was most traumatized, was the one that has never before been used to getting a no answer by some "dingy developing world backwater": the United States, and the person most humiliated, who else but John Kerry.

"U.S. Secretary of State John Kerry told Prime Minister Narendra Modi on Friday that India's refusal to sign a global trade deal sent the wrong signal, and he urged New Delhi to work to resolve the row as soon as possible." "Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India," a U.S. State Department official told reporters after Kerry's meeting with Modi.

Wrong signal for John Kerry perhaps, who is now beyond the world's "diplomatic" laughing stock and the man who together with Hillary Clinton (and the US president) has made a complete mockery of US global influence in the past 5 years. But just the right signal for China and of course, Russia.

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India needs the world more than the world needs India.

India doesn't need 'World' organizations that were designed to propagate and support US hegemony.

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That's not what I said, nobody needs them.

http://uk.reuters.com/article/2010/06/03/idINIndia-49016720100603

From 2010, look at the linked graphs.

The issue here is whether this decision by India will put a nail in the coffin of the WTO, which has been a primary driver in the advance of globalaisation and therefore the advance of western interests.

It should be Considered in relation to the recent BRICS meeting which set up a Development Fund and a Currency Stabilization Fund, as well as other moves by China, Russia, India and others to reduce the demand for Us dollars.

India is not an insignificant player on the world stage. Unlike the UK for instance, it can send space probes to Mars.

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India needs the world more than the world needs India.

For the time being, indeed. India is energy resource poor and has a trade deficit in no small part because of this.

Longer term, India has vast thorium reserves, if it could utilize that, it might be a game changer.

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India needs the world more than the world needs India.

Yes, but just standard trading will suffice. Using local currencies or gold etc. What India does not need is an American/Western system of rules and regulations designed to permit the West to bring developing nations to their knees.

People around the world are waking up. The dollar will be isolated and then dropped.

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It is a reasonably interesting story but Zero Hedge appears to selectively quote to suit its political point of view (who'd have thunk it?)

http://mobile.reuters.com/article/idUSKBN0G009R20140801?irpc=932

The title of the article is "India says WTO deal not dead, can sign in September if concerns addressed", not the rejection of the WTO the OP suggests. Indeed a perusal of the article indicates India simply wants an exception for their food subsidies, which us part of the usual horse trading. The main objection by other countries appears to be that the likelihood of the veto was not well signposted by India and was a bit clumsily done.

The idea of India throwing their lot in with China and Russia appears to be made up by Zero Hedge, cannot see it from the article or my general knowledge. To my mind India sees itself as a future democratic, multicultural superpower with a mindset very different from the autocratic tendencies of Russia and China. Certainly they will not wish to or be willing to be a US ally in the style of Japan, but the idea of them being a part of some sort of anti-US alliance is very far fetched, especially in view of their border disputes with China. Regarding their relationship with Japan - Japan isn't trying to be BFF, they have strong and deep links with India going back to the beginning of the post war era. I think we can safely add Asian geopolitics to the long list of things Zero Hedge doesn't understand.

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Yes, but just standard trading will suffice. Using local currencies or gold etc. What India does not need is an American/Western system of rules and regulations designed to permit the West to bring developing nations to their knees.

People around the world are waking up. The dollar will be isolated and then dropped.

India isnt some tiny vunerable little flower, with the BRICS starting up their own IMF, it'll be India doing the predation!

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The issue here is whether this decision by India will put a nail in the coffin of the WTO, which has been a primary driver in the advance of globalaisation and therefore the advance of western interests.

It should be Considered in relation to the recent BRICS meeting which set up a Development Fund and a Currency Stabilization Fund, as well as other moves by China, Russia, India and others to reduce the demand for Us dollars.

India is not an insignificant player on the world stage. Unlike the UK for instance, it can send space probes to Mars.

india as a rising power is nothing to be frightened of.we need to work WITH them,rather than be in competiton with them

as a nation they are quite mellow people

I think when their turn comes for world domination they will probably follow the "old"british model of eccentricity,philosophy etc.rather than outright corporatism.

they do also have a caste system, much like our aristocrats, but I think on the whole they would be a benevolent power.

india I think is going to be the new britain,while china will become the new US.

china are very shrewd businessmen,and do posess that ruthless streak, hence my view that china would go "corporatist" if certain safeguards aren't put in place.

(as for china remaining communist..forget it, if you've seen how these guys behave in a casino...there's no chance of communism when they're off the leash, they are born speculators,and they play to win.)

Edited by oracle

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The idea of India throwing their lot in with China and Russia appears to be made up by Zero Hedge, cannot see it from the article or my general knowledge. To my mind India sees itself as a future democratic, multicultural superpower with a mindset very different from the autocratic tendencies of Russia and China.

to a point I'd agree., which is why I don't mind investing in indian infrastructure etc.

they are certainly the best hope of democracy in the world if we and the yanks feck it all up.

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It is a reasonably interesting story but Zero Hedge appears to selectively quote to suit its political point of view (who'd have thunk it?)

http://mobile.reuters.com/article/idUSKBN0G009R20140801?irpc=932

The title of the article is "India says WTO deal not dead, can sign in September if concerns addressed", not the rejection of the WTO the OP suggests. Indeed a perusal of the article indicates India simply wants an exception for their food subsidies, which us part of the usual horse trading. The main objection by other countries appears to be that the likelihood of the veto was not well signposted by India and was a bit clumsily done.

The idea of India throwing their lot in with China and Russia appears to be made up by Zero Hedge, cannot see it from the article or my general knowledge. To my mind India sees itself as a future democratic, multicultural superpower with a mindset very different from the autocratic tendencies of Russia and China. Certainly they will not wish to or be willing to be a US ally in the style of Japan, but the idea of them being a part of some sort of anti-US alliance is very far fetched, especially in view of their border disputes with China. Regarding their relationship with Japan - Japan isn't trying to be BFF, they have strong and deep links with India going back to the beginning of the post war era. I think we can safely add Asian geopolitics to the long list of things Zero Hedge doesn't understand.

Russia and China aren't suggesting any kind of 'anti US' alliance either. They are just not prepared to exist under a dollar hegemony. The world will be multi-polar. No one power will have control or lead. People will be free to trade in whatever they see fit, without needing the US to approve their plans or otherwise.

The dollar is in the process of being marginalised. The process is ongoing. It's not anti-American, per se - just a sensible policy for world development.

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Yes, this decision by India has to be seen in the context of other recent decisions by the BRICS - that's why I fear some sort of military confrontation.

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If you follow cricket you will know that India are very keen on throwing their weight around these days.

If they want to apply their general crickety bolshiness to the petro dollar too, then fine.

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Yes, this decision by India has to be seen in the context of other recent decisions by the BRICS - that's why I fear some sort of military confrontation.

By who over what? A food subsidy?

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Russia and China aren't suggesting any kind of 'anti US' alliance either. They are just not prepared to exist under a dollar hegemony.

They are not anywhere near powerful or influential enough to do anything about the dollar hegemony. China cannot even take Taiwan and Rusdia struggles to control Ukraine. Moreover neither currency IIRC is tradeable like the dollar.

The world will be multi-polar. No one power will have control or lead. People will be free to trade in whatever they see fit, without needing the US to approve their plans or otherwise.

The dollar is in the process of being marginalised. The process is ongoing. It's not anti-American, per se - just a sensible policy for world development.

We are good half century to a century from that, if it occurs, assuming Russia and China arent crippled by their aging societies.

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They are not anywhere near powerful or influential enough to do anything about the dollar hegemony. China cannot even take Taiwan and Rusdia struggles to control Ukraine. Moreover neither currency IIRC is tradeable like the dollar.

We are good half century to a century from that, if it occurs, assuming Russia and China arent crippled by their aging societies.

that's where you're wrong.

putin, being rather handy at judo, has a strategy.(use the force of aggressive assailant against them)

basically exacerbate the conflict in the middle east so the US is put into a position where they have to use nukes(albeit a smallish number) or lose face horribly in a protracted war of attrition

once the big red button is pressed and the middle east is turned into a charcoal briquette, then putin and chums can throw their hands up in horror and lead a chorus of international outrage against uncle sam.....throwing in a few trade embargoes for good measure and turing the USA into an international pariah state.

Edited by oracle

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They are not anywhere near powerful or influential enough to do anything about the dollar hegemony. China cannot even take Taiwan and Rusdia struggles to control Ukraine.

Neither have even tried to do either. America, meanwhile, did try to take over third-world countries and was beaten by a bunch of poppy farmers with AK47s.

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Neither have even tried to do either. America, meanwhile, did try to take over third-world countries and was beaten by a bunch of poppy farmers with AK47s.

You mistake military failure for political failure - Putin got further in Ukraine because many people there are genuine collaborates who are less alien than the Afghan tribes, but unfortunately it's become his Iraq as soon as said collaborators allegedly shot down a Western passanger plane.

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You mistake military failure for political failure - Putin got further in Ukraine because many people there are genuine collaborates who are less alien than the Afghan tribes, but unfortunately it's become his Iraq as soon as said collaborators allegedly shot down a Western passanger plane.

Yeah, he's lost thousands of Russian troops fighting the native Ukrainians who don't want them there, so he can steal their oil and impose a puppet government.

Oh, hang on, no, he hasn't. He still has Crimea, which is what he wanted, and he could walk into Eastern Ukraine any time he felt like it.

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As for China and Taiwan, China are building their military technologies and strength. The US has its carrier fleets but they are looking more and more vulnerable.

China is playing catch up and quick, at some point they will be confident enough that they can take Taiwan and once done the US will be powerless to take it back.

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MarkG, Putin could roll into Eastern Ukraine if he wanted easily like Bush could roll into Afghanistan and Iraq, but it would be outside of the already Russified "green zone" of the Crimea (with its long established military bases, defensible geography, and concentration of Moscow loyalists) and he could get bogged down quite easily, and it'd get worse the further West into Ukraine he goes.

Edited by Big Orange

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Yeah, he's lost thousands of Russian troops fighting the native Ukrainians who don't want them there, so he can steal their oil and impose a puppet government.

Oh, hang on, no, he hasn't. He still has Crimea, which is what he wanted, and he could walk into Eastern Ukraine any time he felt like it.

You don't get it. Putin tried to persuade Ukraine to turn its back on the EU and what he got was a civil war and sanctions which will push him into recession. The EU has more clout in his own backyard than he does.

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