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Trump announces plans to end $5.6 bn preferential trade programme for India

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Donald Trump Trade War

New York, March 5: US President Donald Trump has announced that he was ending India’s $5.6 billion trade concessions under the Generalised System of Preferences (GSP) programme accusing New Delhi of not providing Washington “equitable and reasonable access” to its markets.

Trump, who is on a mission to expand marker access abroad and end trade deficits, made the announcement on Monday in a letter to House Speaker Nancy Pelosi and Vice President Mike Pence in his capacity as the Senate President.

The US Trade Representative’s Office (USTR) said that the preferences will end in 60 days after the notification to Congress and the Indian government.

Meanwhile, Trump said that he will continue to monitor if India is “providing equitable and reasonable access to its markets” and meet the GSP eligibility criteria.

India had opposed proposals to end the GSP saying that it would be “discriminatory, arbitrary” and hurt the country’s development.

India is the largest beneficiary of the GSP exporting goods worth $5.6 billion to the US under the programme. Congress establishes the conditions of eligibility for GSP, which include “providing the US with equitable and reasonable market access, protecting workers’ rights and combating child labour”.

Trump wrote in his letter: “I am taking this step because, after intensive engagement between the United States and the government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.”

The USTR said: “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce”, but did not mention the specifics in its statement.

“Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion”, it added.

The total India-US trade was $126.2 billion in 2017, with a $27.3 billion deficit for the US, according to the USTR. India’s total exports were worth $76.7 billion and the end to GSP affects only a small part of it limited to $5.6 billion.

At a hearing held by the USTR last June on withdrawing India’s GSP, the minister in charge of commerce at the Indian Embassy in Washington, Puneet Roy Kundal, said that withdrawing the GSP benefits “would be discriminatory, arbitrary, and detrimental to the development, finance and trade needs of India, which is a vast and diverse developing country with unique challenges”.

The primary aim of the GSP is to help developing countries, particularly in sectors where the benefits can reach the poor.

Trump also said that he was ending the GSP for Turkey because of its economic success and rising living standards that would no longer make it eligible for the programme that is meant to help developing countries.

The President has been on a warpath against what he said were high tariffs on US imports to India. While pushing for the Reciprocal Trade Act in January, he brought up India’s duty on American whiskey, which he said was 150 per cent and on Harley Davidson motorcycles that he asserted he had gotten reduced from 100 to 50 per cent.

The decision to end the GSP may not entirely be influenced by high tariffs imposed by India on US imports. The two countries have had differences over the restrictions placed on e-commerce by Amazon and on Walmart subsidiary Flipkart and on data housing by Visa and Mastercard.

The decision comes as the US is reported to be making headway in trade negotiations with China aimed mainly at cutting American trade deficits with a deal expected soon.

Ironically, a trade group warned that taking ending GSP for India could end up helping China.

The American Apparel and Footwear Association said in a written testimony that if GSP benefits are withdrawn for India as well as Indonesia and Thailand, “companies will have no choice but to return to sourcing from China”.

It pointed out that Trump has threatened to impose 10 per cent punitive duties on US travel goods imports from China and ending the GSP for India “means that not only will sourcing return from China, but American consumers will pay far higher prices for their travel goods”.

The US dairy industry was a strong advocate of ending the GSP for India citing its difficulties in exporting to India.

Shawna Morris, Vice President of the National Milk Producers Federation and the US Dairy Export Council, at the the June USTR hearing accused India of refusing to provide them equitable and reasonable access to its markets through “unscientific sanitary and phytosanitary requirements”.

These requirements by India were that the exports should not come from cows that have been given cannibalised feed that includes offal or other meat products.

Kundal countered that it was not an issue fo of market access but of “certification given the religious, cultural and moral sensitivities” and India provide unimpeded market access to dairy products from all countries that met the criteria.

Another opposition came from the medical sector based on price controls on medical devices imposed by India. Kundal said that these were necessitated by India’s need to provide affordable health care to its citizens.

By Arul Louis

(Arul Louis can be reached at [email protected] and followed on Twitter @arulouis)

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Pompeo confident democracies will unite to face China’s challenge

He mentioned India’s ban on 56 Chinese apps from operating on cell phones within the country because of the threat to the country’s security.

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New York, July 15 : US Secretary of State Mike Pompeo said on Wednesday that he is confident that the world’s free nations will join together to face the challenges from China to India and other countries in Asia.

“I think that the whole world is coalescing around the challenge that we face (from China)… I am confident that democracies, the free nations of the world, will push back on these,” he said while replying to a question about the Chinese confrontation with India in the Ladakh region.

He said that India was “an important partner” of the US and “I have a great relationship with my Foreign Minister counterpart (S Jaishankar). We talk frequently about a broad range of issues. We talked about the conflict that they had along the border with China, we talked about the threat that emanates from the Chinese telecommunication infrastructure”.

He mentioned India’s ban on 56 Chinese apps from operating on cell phones within the country because of the threat to the country’s security.

On China’s claims to the maritime territories of Asian countries and aggressive actions there, he said that the US “will use the tools we have, we will support all countries across the world that recognise that China has violated their territorial claims, their maritime claims as well. We will provide them with assistance”.

China has maritime conflicts with Malaysia, Indonesia, Brunei, the Philippines, Vietnam, Japan and Taiwan and has increased its aggressive conduct in the region even as its troops clashed with the Indian Army in Ladakh.

(Arul Louis can be reached at [email protected] and followed on Twitter at @arulouis)

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US undermining South China Sea stability: Foreign Ministry

Zhao stressed that China will continue to determinedly safeguard its national sovereignty and security, friendly and cooperative relations with regional countries, and the South China Sea’s peace and stability.

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Zhao Lijian

BEIJING, July 14 : The United States was undermining peace and stability in the South China Sea and intended to drive a wedge between regional countries, a Chinese Foreign Ministry spokesperson said here on Tuesday.

U.S. Secretary of State Mike Pompeo said in a statement on Monday that many Chinese maritime claims over the South China Sea were illegitimate, and the United States urged relevant countries to oppose China’s maritime claims. Pompeo added that the so-called award of the South China Sea arbitration was legally binding to both China and the Philippines.

In response, spokesperson Zhao Lijian told a news briefing that the U.S. statement disregarded the history and facts on the South China Sea issue, and violated its commitment of holding a neutral position on relevant territorial sovereignty disputes. It also violated and distorted international law, deliberately provoked territorial maritime disputes, and undermined regional stability and peace, he added.

The U.S. statement said the dotted line in the South China Sea was announced by China in 2009, which is completely untrue, Zhao said, adding that China’s territorial sovereignty and maritime rights and interests in the South China Sea were established throughout a long course of history.

He said China has exercised effective jurisdiction over relevant islands, reefs, and waters in the South China Sea for thousands of years, and as early as 1948, the Chinese government announced the dotted line in the South China Sea. This was under no doubt from any country for a long time, he said, adding that China’s territorial sovereignty and maritime rights and interests in the South China Sea have sufficient historical and legal basis, which is consistent with relevant international laws and practices.

China doesn’t strive to build an “empire” in the South China Sea, always treats countries surrounding the South China Sea as equals, and always maintains the utmost restraint in safeguarding the sovereignty, rights, and interests of the South China Sea, Zhao said.

“On the contrary, the United States refused to join the United Nations Convention on the Law of the Sea (UNCLOS), frequently pulls out of international treaties and organizations, abides by international rules that suit its purpose, and discards those that it finds obstructive. It frequently promotes militarization of the South China Sea by dispatching large-scale, advanced warships and aircraft. The United States is the destructor and troublemaker of peace and stability in the region. The international community sees this very clearly,” Zhao said.

As for the arbitration case and the award, Zhao said China’s position is consistent, clear, and firm. The arbitral tribunal expanded its power to exercise jurisdiction, and made obvious mistakes in the determination of facts and the application of laws, which was questioned by many countries.

The U.S. hyped up the South China Sea arbitration for their own political agenda, which was abusing the international law of the sea, and China would never accept it, he said.

According to the Declaration on the Conduct of Parties in the South China Sea (DOC) reached by China and ASEAN in 2002, China is always committed to resolving disputes on territory and jurisdiction through negotiations and consultations with the related sovereign states, maintaining the peace and stability in the South China Sea with the ASEAN countries, Zhao told the briefing.

“With joint efforts of the relevant countries, the situation in the South China Sea remains sound and stable at the moment,” Zhao said, adding that China and the ASEAN countries not only abide by the DOC, but are also speeding up negotiations on a more binding code of conduct (COC) to safeguard the peace, stability, and freedom of navigation in the South China Sea.

Now the consultations have made positive progress, and the relationships between China and the ASEAN countries have further consolidated and developed during their cooperations against COVID-19, Zhao said.

However, the United States, as a non-regional country, has repeatedly stirred up trouble regarding the South China Sea for its own selfish agenda, played off the relationships of regional countries against China, and ruined the joint efforts made by these countries, he said.

Meanwhile, the U.S. statement deliberately misinterpreted the Chinese representative’s statement at the ASEAN Regional Forum Foreign Ministers’ Meeting in 2010. Zhao said the fact was that China’s representative said China has always advocated that all countries are equal, and relevant disputes should be settled peacefully by the direct parties concerned through negotiations and consultations.

“China expressed its strong indignation and firm opposition to the U.S. wrongdoing,” he said, urging the United States to immediately stop making trouble in this regard, and not to go further down the wrong path.

Zhao stressed that China will continue to determinedly safeguard its national sovereignty and security, friendly and cooperative relations with regional countries, and the South China Sea’s peace and stability.

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Trump administration drops visa ban for online only students

Foreigners make up over 75 per cent of graduate students in electrical, computer, petroleum and industrial engineering fields, according to Inside Higher Ed.

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New York, July 15 : In a victory for universities and foreign students, President Donald Trump’s administration has dropped its order to deny visa status to those taking only online cases because of the COVID-19 pandemic.

Federal Judge Allison Burroughs said on Tuesday that the government agreed to rescind the rule that would have required foreign students on F-1 or M-1 visas to leave the US or transfer to another university if they cannot take at least some in-person courses. Those staying on could have faced deportation.

The judge made the announcement about the government backtracking during an emergency hearing asked by the two institutions that was held by teleconference and lasted only a few minutes.

The case was brought in the federal court in Boston by the Massachusetts Institute of Technology and Harvard University on July 8 and it had snowballed with scores of colleges and tech companies backing them in court briefs and 18 state attorneys general filing another case against the order.

The Trump administration’s order issued last week reversed another issued in March that permitted students to take all their courses online because of the national COVID-19 emergency — which still continues.

Many universities, including Harvard, have announced plans to conduct only online classes in the Fall semester starting in August or September, while some like Columbia and Yale plan to offer a hybrid programme that combines online and in-person teaching if local authorities permit classroom attendance.

The administration’s order against online only teaching seemed to be a tactic to force educational institutions to comply with Trump’s agenda to open the nation fully before the November election.

When the case was filed, Harvard President Larry Summers said, “It appears that it was designed purposefully to place pressure on colleges and universities to open their on-campus classrooms for in-person instruction this fall, without regard to concerns for the health and safety of students, instructors, and others.”

At least two other cases against the government’s order are pending before other federal courts: One is by Johns Hopkins University in Washington and the other is by the University of California in San Francisco.

Harvard and Yale said in court documents that although it may be argued that the students can continue their studies online from their home countries, “they may have their research and learning inhibited by time zone variations, unavailable, unreliable or state-managed Internet connections, and other barriers to online learning”.

They said that students can suffer irreparable harm from the order if they are forced out of the country.

Tech companies, including Google, Microsoft and Facebook said in their brief that “America’s future competitiveness depends on attracting and retaining talented international students”.

According to the International Institute of Education, there are over one million foreign students in the US and of them about 200,00 are from India.

several US institutions are dependent on tuition from foreign students, many of whom pay full fees.

But another factor of importance to both the universities and the economy is the pre-ponderance of graduate students in engineering and science.

Foreigners make up over 75 per cent of graduate students in electrical, computer, petroleum and industrial engineering fields, according to Inside Higher Ed.

They not only back up the faculty as teaching assistants and researchers, but go on to work for or found tech companies.

(Arul Louis can be reached at [email protected] and followed on Twitter at @arulouis)

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