CUTS International Washington DC Center
Monthly Brief #56, November 2022
Lessons from Bali: Multilateralism must prevail
 
The last G20 Summit held in Bali, Indonesia on 15-16 November, 2022 marked an important occasion as leadership of the group passed from one developing country to another. Eyes of the world were fixed on Bali, owing to the G20’s stature and increasing relevance in global affairs. The G20, comprising 19 countries and the European Union, accounts for over 80 per cent of the global GDP (gross domestic product), 75 percent of international trade and two-thirds of the global population - thus, representing significant global economic interests. The baton has now passed onto India which has been receiving higher attention in view of its economy and geopolitical actions.
 
In the days leading up to the Summit, there were genuine concerns that the occasion may fall prey to geopolitical tensions triggered by the Russian invasion in Ukraine. Fortunately, India’s diplomatic efforts, along with others, prevented a stalemate and ensured that the Summit yielded a Joint ‘Leaders Declaration’. This reflected the highly desirable consensus on addressing some of the most pressing questions facing the world, without getting bogged down by extraneous externalities. The leaders were thus able to address concerns regarding Food and Energy Security, Climate Finance, Biodiversity, Women’s Empowerment, Supply Chain Resilience, Multilateral Trade, Financial Inclusion, among others.
 
The members recognised that arresting the slide of socio-economic progress achieved over the years would require coordinated policy responses, which are inclusive, targeted, innovative and futuristic. Among others, digital transformation could be a potent tool to accelerate progress towards realising the Sustainable Development Goals (SDGs), as recognised in the Bali Declaration.
 
Multilateralism must prevail
 
India’s G20 presidency is an opportunity to give a fresh lease of life to multilateralism, which faces a serious risk of unravelling in a fractured world order. Being one of the few countries that are in a position to engage with both the West and Russia, India’s ability to steer a collective agenda will have a huge bearing on the nature and extent of global recovery in such times of crisis. Having come a long way in its own developmental journey, India’s wealth of experience could also guide the aspirations of its partners in the Global South as they strive to raise the quality of lives of their citizens.  
 
In short, having laid out the template for its presidency in Bali, India stands ready to steer the world on a path of collective progress, aligned with its G20 theme of ‘One Earth, One Family, One Future’. This phrase is based upon an ancient Indian talisman: “Vasudhaive Kutambakam”.
      
Pradeep S. Mehta
Editor

P.S. Gender inclusive trade can have a multiplier effect not only on women but also their families and the GDP of a nation. Can the upcoming World Trade Congress on Gender, give a fillip to trade by leveraging gender responsive trade policies?


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This is the fifty-sixth edition of the Monthly Brief from the Center, which carries select published news or comments on a relevant issue. There are equally important issues which may have been missed out to keep the Monthly Brief short and swiftly readable.
 
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India-US trade may reach US$500-600 billion by 2030   
Commerce and Industry Minister Piyush Goyal on November 12, 2022 exuded confidence that the India-US bilateral trade in goods and services will reach US$500-600 billion by 2030 as their relation continues to strengthen. The trade between the two countries stands at about US$175 billion at present. While 13 member countries have joined all four subjects - trade, supply chains, clean economy and fair economy under IPEF, India has opted out of the trade pillar as of now. It has joined the other three subjects.

India-Australia FTA will boost trade in services, minerals
India is eyeing a larger share in global trade and is taking the route of bilateral free trade agreements towards this goal. The latest in the series of Free Trade Agreements (FTAs) is the one with Australia. Canberra too wishes to reduce its dependence on China, hence the timings of the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) could have been better for the two countries.

India makes major strides in improving cargo clearance
International trade is an important field wherein competitively better performance is likely to be most visible and support government initiatives such as ‘Make in India’. International trade as an engine of growth prefers countries and routes that provide the most facilitative environment. India as signatory to the World Trade Organisation’s Trade Facilitation Agreement (TFA), has made concerted efforts to improve trade facilitation and ease of doing business, fulfilling all the TFA commitments well in time.

3 charts that show how trade can speed up climate action and the transition to clean energy
Trade can play a central role in driving progress towards a low-carbon global economy. But harnessing the potential of trade will demand new policies and more cooperation. The introduction to the World Trade Organisation’s (WTO) annual report argues that trade can play a significant part in driving the green transition to combat climate change. Released at the start of the COP27 climate summit in Egypt, the WTO’s World Trade Report 2022 says obstacles to the acceleration of renewable technologies must be removed.

 

Levy a Tobin tax for the climate loss and damage fund
The COP27 outcome was a second best solution. It failed to address critical aspects of capping the Earth’s temperature rise at 1.5° Celsius above its pre-industrial level. While the Global North has agreed to pay the South for losses and damages due to climate change, it should know that this is not charity. Its disproportionate consumption of the planet’s resources has created a historical moral and legal obligation to pay for it. We require an imaginative approach to raise funds without burdening any government, and not by robbing the rich to pay the poor.

Sharm El-Sheikh Climate Change Conference
The 27th Conference of the Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) took place in the Egyptian city of Sharm El-Sheikh. It has been three decades since the Earth summit in Rio, the world has come a long way in the fight against climate change and this summit has further strengthened the fight and will remain important for the pledges taken, mitigation action plans discussed and reaching an historical agreement on “Loss and Damage” fund for vulnerable countries. This edition of CUTS ONW collates News, Op-eds and Statements from policy experts and senior journalists on the major outcomes and key takeaways of the second most attended COP of all times.
 
COP27: India’s ancient learnings can help climate change mitigation efforts
The United Nations Climate Change Conference (COP27) starting on November 06, 2022 in Egypt is a platform for countries to discuss and act towards a sustainable future. Known for nature-worshipping, sustainable practices and eco-friendly lifestyle for ages, India has been a party to the United Nations Framework Convention on Climate Change (UNFCCC) since it came into force on 21 March, 1994. With the launch of various missions and initiatives towards a cleaner future, the country can lead global climate action by re-enacting the age-old sustainable practices in a modern form.

EU’s Carbon Border Adjustment Mechanism: Why should Indian industry care?
Reflecting a shift in trade ethos, various initiatives are trying to connect sustainable production with sustainable consumption. The European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) is one of them. Having established the Emissions Trading System (ETS) in 2010 that provided carbon emission rights to domestic producers, the EU will now be imposing an equivalent cost on imports to level the playing field between foreign and domestic producers, thereby preventing carbon leakage.

 

G20, regional blocks reinvent multilateralism
In an increasingly fragmented world, one has to look for regional formations as the building blocks of reinforced multilateralism. Association of Southeast Asian Nations is one such regional formation. This year three ASEAN countries held leadership positions in significant regional and international institutions - Indonesia as the president of G20, Thailand as the host of the Asia-Pacific Economic Cooperation, and Cambodia as the chair of ASEAN and the East Asia Summit.

India’s G20 presidency: Thrust is on reformed multilateralism
Indonesian President Joko Widodo handed over the presidency of the G20 to Prime Minister Narendra Modi in Bali with the grouping’s leaders in full attendance. In his closing remarks at the Bali Summit, Prime Minister Narendra Modi declared that India’s leadership of G20 will be inclusive, ambitious, decisive and action oriented. The speech set the template for G20’s course of action in 2023. The Prime Minister’s template is closely aligned with India’s theme for its presidency - One Earth, One Family, One Future.

A new era of India-Africa defense cooperation
As India and Africa break the shackles of the dark past of colonialism and become the architects of a prosperous and secure future, co-developing and co-producing in the defence sector could prove to be a catalyst. Thus, delivering the keynote address at the event, the Defence Minister of India iterated that “African priorities are our priorities”. That set the tone for the 12th Defexpo. The African countries and India have had humble beginnings and with continuing shared principles of non-violence and peace, both regions are important for buttressing and raising important south-south cooperation.

India, US must bridge the gulf on Indo-Pacific
The shared aim of the US and India to preserve security in the Indo-Pacific does not hide the frequent tension between them at bilateral and international levels, especially when it comes to Russia and Pakistan. India is the only Quad country to have a land dispute with China the US favours a bilateral solution to their conflict. Currently, the US attention is focused on defending Taiwan against an aggressive China. Both India and the US perceive China as the primary threat to their security.

 

Sitharaman's call for G-20 nation to regulate cryptos gets a thumbs up from domain players
Union Finance Minister Nirmala Sitharaman said global crypto asset regulation should be an international priority and will be a big topic of discussion at the next G-20 summit. India needs to encourage international groups such as the International Monetary Fund, Financial Stability Board and the Organisation for Economic Co-operation to help form crypto regulations with all countries being on board. She iterated that no single country can succeed individually, being in a silo, trying to regulate the crypto assets.

Sustainability, tech driving Indo-US ties
Commerce and Industry Minister Piyush Goyal has said that Indo-US economic relations are driven by the common interest of promoting sustainability, emerging technologies, globally resilient supply chains, and small businesses. At the India-US CEO Forum held virtually on November 10, 2022 he also reiterated the importance of such dialogues in leveraging this momentum.

India jumped to 40th rank in global innovation index
Prime Minister Narendra Modi said India jumped to 40th rank in the global innovation index this year. In 2015, we were ranked 81. The number of unicorn start-ups in India has doubled, we are now the 3rd largest in the world. This is due to India’s talent pool. He appealed to global and domestic investors to explore opportunities in the technology and innovations of India. Technology was seen as an exclusive domain reserved only for the high and mighty but India has shown how to democratise technology.
 
Life beyond the US technology layoffs
The main reason for the layoffs can be traced back to the sector’s over-hiring. The top five companies - Facebook (Meta), Apple, Amazon, Netflix and Google, also known as FAANG increased their headcount by over 80 percent between 2019 and 2021. They are now correcting for their optimism. Meta CEO Mark Zuckerberg said its increased investments in the company did not play out the way he expected. Microsoft faced its slowest growth rate in five years. Tech companies are facing growing pressure from investors to contain costs.

 

G20 Bali Summit: Recover Together, Recover Stronger
The seventeenth meeting of the Group of Twenty (G20) nations was held in Nusa Dua, Bali, Indonesia on November 15-16, 2022. G20 leaders met for a two-day pinnacle summit hosted by the Indonesian G20 presidency under the theme, “Recover Together, Recover Stronger”. The summit saw extensive discussions on the revival of the global economy, food security, climate change and condemnation of Russian aggression among other high-priority agendas. This edition of CUTS ONW collates News and Op-eds from policy experts and senior journalists on the major outcomes and key takeaways of this summit.

Here's how G20 can fix the sustainable development funding problem
When attending a recent seminar on preparations for India taking over G20 presidency, Nirmala Sitharaman spoke about finance issues as a major handicap in achieving the Sustainable Development Goals (Paywall) agenda. Financial commitments made by rich countries at the 1992 Earth Summit in Rio de Janeiro, Brazil, 2002 Monterrey Consensus in Mexico, 2015 Addis Ababa Action Agenda in Ethiopia and in various COPs have never been met. Looking at the current economic downturn and shrinking revenues, despite agreeing on setting up a loss and damage (L&D) fund, it is going to become more difficult.

Australia-India working together to support peaceful, prosperity neighbourhood
Commander of the Australian Amphibious Task Force Captain Phillipa Hay said that Australia’s relationship with India has been accelerating with the latter being an important strategic partner to us. She further added, about 3 percent of the Australian population are Indians. So, all of us in Australia have Indian friends. Our connection with India is very strong because it's interwoven into the patchwork of the Australian identity. Both Australia and India have smart, savvy, and technically minded young people.
 
Will the UN Tax Convention Empower Africa?
United Nations (UN) members agreed to begin talks on fundamental changes to how taxes are collected globally. The resolution submitted by Nigeria on behalf of the 54 member states of the African Group would see the establishment of a UN tax convention and new global tax body - a historic move long resisted by richer nations because it would weaken their control over international tax rules. A last minute amendment put forward by the US argued that a new body would undermine work already underway by the Organisation for Economic Cooperation and Development (OECD). But that amendment was rejected by developing countries.