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A trade deal with India isn't as easy as Boris Johnson and Theresa May think

Discussion in 'International Politics' started by Agent_47, Jan 20, 2017.

  1. Agent_47

    Agent_47 Admin - Blog Staff Member MODERATOR

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    The UK is in a relatively weak bargaining position for precisely the same reason as it is with the EU (and most of the other potential new trade deals) – which is to say that Britain needs India more than India needs Britain

    The irony could scarcely be more acute. Britain is about the leave the European Union because of its insistence on free movement of people, and seeks new partnerships with fast-growing emerging nations. Emerging nations, however, insist on free movement of people as a condition for concluding free trade deals for goods and services. Not, perhaps, what the Prime Minister has in mind for Brexit.

    The confirmation from senior Indian officials, including the new High Commissioner to Britain, that India wants a much more liberal approach to visa policy in return for trade and investment demonstrates the scale of the task facing ministers. The Foreign Secretary, doing his usual routine in Delhi, demands a new “turbocharged” relationship with India. He concedes it may take a little time to negotiate, but, in typical Boris fashion, suggests that it can be sketched out now with a pencil on the back of an envelope. Nothing wrong with that, except that the back of the envelope will have phrases such as “reformed visa policy”, “free movement of people” and “greater access to the UK for students and IT professionals” scribbled on it.

    One of the very many uncomfortable truths about Brexit emerges from this: that free trade in services, usually a “people business”, requires even more freedom of movement for individuals than does free trade in manufacturing. The UK is overwhelmingly a mature, services-based economy, and India, with about 60 per cent of its economic activity accounted for by services, is not far behind. Thus, a free trade deal will have to involve a much changed attitude to allowing Indian workers into the UK. A much changed attitude, that is, to the one Theresa May displayed when she was Home Secretary and which was obvious again when she last paid an official visit to India.

    The phrase “have your cake and eat it” inevitably springs to mind when looking at the Government's approach to trade with India, and indeed any country where Britain could potentially repair some of the damage that will be inflicted by the “bold” hard Brexit policy she outlined at the start of the week.

    In fact, like the EU, India is a much larger economy than the UK, if it is measured properly by abstracting away the distortions of exchange rates. The UK, therefore, is in a relatively weak bargaining position for precisely the same reason as it is with the EU (and most of the other potential new trade deals) – which is to say that Britain needs India more than India needs Britain.

    The possibilities, though, are well worth chasing. Indian firms, perhaps the most high-profile being Tata’s successful stewardship of Jaguar Land Rover, have a mostly exemplary record as investors in British industry and commerce, and there is much more that can be done in that direction. British firms helped India’s economy grow when they outsourced call centres, service departments and, above all, IT hubs to the subcontinent. Freer trade in manufacturing, both high-tech and more basic, is also an obvious target for collaboration, though it is unlikely that India will find it easy to deregulate areas such as finance, retail, agriculture and defence, where legendary Indian bureaucracy reigns supreme. Still less will the Indian government want to alienate powerful interests in their own country for the sake of appeasing the British if, in return, the UK continues to cold-shoulder its most talented professionals.

    Boris, it is fair to say, has his work cut out.

    http://www.independent.co.uk/voices...-may-brexit-freedom-of-movement-a7534121.html
     
    SrNair, Wolfpack and Gessler like this.
  2. Wolfpack

    Wolfpack Lieutenant FULL MEMBER

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    With that kind of colonial attitude
    He is going to get nowhere,
    This is not the British Raj where you can scribble something on the back of a envelope and say to the Indians that this will do for now.
    The uk has no real interest in fair trade. It wants and expects to rule again.
    Hence all the lets trade with the commonwealth stuff again.
    Trade is a two way street
    They forget Britain needs India now more than India needs Britain. If they want business, it should be quid pro quo ,not Britain having a cake and eating it too.
    India is well off without British business, if they want to do business with us they need to do us favors.
     
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  3. Ripcord322

    Ripcord322 Lieutenant FULL MEMBER

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    When he quoted that 'envelop quote'....I don't think he meant...."Scrrible something on the back of an envelope and send it to the Indians to comply..."
    I guess what he meant was..."Hey man....This deal might sound complex.....But it's simple... Heck I can Scrrible it with a pencil on back of an envelope"


    Anyway... That was just my understanding and I might as well be wrong....


    So coming back to the deal....
    We don't have to worry about a one sided trade deal favouring UK in any case....Heck...Our Government wouldn't ever go through with It...


    From the way I see it...We do seem to have an upper hand...The British will have to come up with ingenious ways to fullfill their political as well as economic interests.....

    We can give them a lot ....They can give us a lot too (Technology and Stuff)...
    I hope after this deal (If there is one ever) both countries come out stronger and better...
     
  4. lca-fan

    lca-fan Major SENIOR MEMBER

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    Britain should realise It is not year 1917 it's 2017 and it is no more colonial India and Britain no more a country where sun never set. It 21st century and it's acknowledged as Asian century. Even Americans are wooing India Britain is just a dot on world map.
     
  5. Wolfpack

    Wolfpack Lieutenant FULL MEMBER

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    Boris Johnson as a Diplomat is a failure if he goes on a trade deal and says such stuff . Diplomats choose their words carefully they can make or break deals and relations between countries.

    I find the colonial condescending attitude that sounds like "We will write it on a piece of paper for now and later we will make if official,which doesn't materialize in most cases .
    This sounded like how the British gave assurance that if Indian soldiers fought during World War I India would be given limited rule,which never happened.
    We need to man up, if we want others to take us seriously,their Parliament passes resolutions against Kashmir and the same people want trade deals written on the back of envelopes by pencils? we should stress that trade deals cannot happen if such Anti-India activity happens in UK Parliament. Does China ever accept such behavior?

    I am not worried about the present GOI favoring UK as i am sure they will look after country interests, but don't forget the past UPA and other Governments where they did secret trade deals which were to our disadvantage to line their pockets with money.

    Of course, the British will have to come up with a very sweet deal to let us even think about it. The visit of British PM Theresa May earlier was a failure,it could not break the ice, either they change the deals conditions or go back to status quo. Either way it will be Britain which will be left in doldrums. I am not very worried in that matter.
     

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