{"id":30636,"date":"2024-10-10T17:24:25","date_gmt":"2024-10-10T11:54:25","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=30636"},"modified":"2024-10-10T18:46:10","modified_gmt":"2024-10-10T13:16:10","slug":"concerns-over-increasing-weaponization-of-trade","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/10-10-2024\/concerns-over-increasing-weaponization-of-trade","title":{"rendered":"Concerns Over Increasing weaponization of Trade"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/ International Relations<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The External Affairs Minister of India, S. Jaishankar highlighted that rising globalization along with trade weaponization has&nbsp; resulted in job losses and dissatisfaction in many societies.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is trade weaponization?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Trade weaponization refers to the <strong>strategic use of trade policies and economic measures<\/strong> by countries to exert political or economic pressure on others.&nbsp;<\/li>\n\n\n\n<li>Instead of trade being purely an economic activity aimed at mutual benefit, it becomes a<strong> tool of influence, coercion, or retaliation<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Tools of trade weaponization<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tariffs and Sanctions:<\/strong> Countries impose tariffs or sanctions on imports from a particular country to hurt its economy.\n<ul class=\"wp-block-list\">\n<li><strong>Example: <\/strong>US-China trade war<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Export Controls:<\/strong> Restrictions on exports of critical technologies or materials to a nation.\n<ul class=\"wp-block-list\">\n<li>In<strong> 2020,<\/strong> the US government started imposing stricter export controls on China to limit its access to advanced semiconductor technology.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Supply Chain Disruptions: <\/strong>Manipulating supply chains for critical goods, like rare earth metals or energy resources, to gain leverage in political disputes.<\/li>\n\n\n\n<li><strong>Currency Manipulation:<\/strong> It boosts a nation\u2019s export competitiveness while hurting the importing country&#8217;s economy.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges of trade weaponization<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increased Uncertainty:<\/strong> The imposition of tariffs and sanctions creates uncertainty in international markets, making it difficult for businesses to plan for the future.<\/li>\n\n\n\n<li><strong>Loss of Export Markets: <\/strong>Retaliatory tariffs restrict access to key export markets, negatively affecting domestic industries that rely on international sales.<\/li>\n\n\n\n<li><strong>Strained Diplomatic Relations:<\/strong> Trade weaponization leads to heightened tensions between nations, complicating diplomatic relations.<\/li>\n\n\n\n<li><strong>Erosion of Multilateralism: <\/strong>The rise of unilateral trade measures undermines established international trade norms and institutions, such as the World Trade Organization (WTO), leading to a fragmented global trading system.<\/li>\n\n\n\n<li><strong>Disproportionate Effects: <\/strong>Protectionist measures disproportionately affect low-income workers and communities, leading to job losses in industries exposed to international competition.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Steps taken against trade weaponization<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Regional Trade Agreements: <\/strong>Countries are forming or revitalizing regional trade agreements (RTAs) to enhance cooperation and reduce reliance on major economies.\n<ul class=\"wp-block-list\">\n<li>Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),<\/li>\n\n\n\n<li>Regional Comprehensive Economic Partnership (RCEP) etc.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Mineral Security Partnership (MSP) <\/strong>to diversify and stabilize global supply chains of Critical Minerals.<\/li>\n\n\n\n<li><strong>Reform of the WTO: <\/strong>Ongoing discussions to reform the World Trade Organization (WTO) aim to enhance its dispute resolution mechanisms and address the challenges posed by unilateral trade actions.<\/li>\n\n\n\n<li><strong>Indo-Pacific Economic Framework (IPEF):<\/strong> It serves as a countermeasure to economic coercion by countries that use trade as a tool of influence, promoting a more equitable and rules-based trading system.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Concluding remarks<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The challenges arising from the weaponization of trade are complex and multifaceted, affecting not only national economies but also the global trading system and international relations.<\/li>\n\n\n\n<li>There is further need for encouraging transparency, enhanced communication, and <strong>conflict resolution mechanisms <\/strong>to promote a stable and equitable international trading system.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/trade-weaponised-wars-diverting-focus-from-imec-climate-change-jaishankar-9606976\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The External Affairs Minister of India, S. Jaishankar highlighted that rising globalization along with trade weaponization has\u00a0 resulted in job losses and dissatisfaction in many societies.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-30636","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/30636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=30636"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/30636\/revisions"}],"predecessor-version":[{"id":30682,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/30636\/revisions\/30682"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=30636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=30636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=30636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}