Raj Chengappa
It was without doubt histrionics of the grandest scale. Donald Trump looked smug as he made history by shaking hands with Kim Jong-un on June 12 at a Singapore luxury resort. In doing so, he became the first American president to hold a summit meeting with a North Korean head of state. The two leaders were a study in contrast, Trump at 72 with his wavy blond hair and Kim a portly 34 with his dark hip-hop bouffant. One was the leader of the free world, the other an epitome of the unfree one. But they had much in common too. Apart from their affluent upbringing, both have displayed their megalomaniacal impulses as rulers of their respective countries. To be fair to Trump, he is only a bully and has never indulged in the kind of brutal repression that the young North Korean supremo unleashed in his country. With their fierce rhetoric, both leaders had brought the world the closest it has been to a nuclear Armageddon since the perilous Cold War years.
At the summit, though, neither of the leaders roared. Instead they appeared more like well-fed pussycats purring at each other as they discussed the nitty-gritty of a nuclear deal that had eluded the world for close to 25 years. Apart from patting Kim on the back to show bonhomie, Trump gave him a peek of his presidential limousine and even played a Hollywood-styled video on an iPad for him that presented the North Korean leader with two choices: to go down in history as a leader who took his country to greater prosperity or destroy it by engaging in a futile nuclear conflict with the US and the world. Rarely had diplomacy been conducted with the bluster and braggadocio Trump exhibited in his tango with Kim.
The US president has lived up to his campaign boast that he will bring Kim to the negotiating table. In some senses, Trump had very little option as during his presidency North Korea not only detonated a hydrogen bomb but also developed missile capability to strike the US. However, the text of the agreement they signed after their summit made his promise of denuclearising North Korea suspect. While it did commit Kim to a process of complete denuclearisation, neither a road map nor a time frame has been spelt out, leaving too many loose ends and exit routes. As nuclear expert Ashley Tellis, a senior fellow at the Carnegie Endowment for International Peace in Washington DC, put it, The summit saw a great deal of posturing but very little of substance. We now have what is claimed to be a tasty pudding but we don't know what it tastes like. Another US expert, Michael Krepon, founder-president of the Stimson Center, was more appreciative, stating, The mushroom clouds are receding, the summit has made war less likely in Korea and is a huge benefit to the world. That is Trump's achievement.
Experts were mixed in their reactions on how Trumps Korean caper would impact the subcontinent. Former National Security Advisor Shivshankar Menon believes that Kim got the better of Trump in the deal. His point: This was really like a mountain producing a mole. If you read the final text, you will find that Kim gave nothing away in terms of denuclearisation but in turn got recognition, legitimacy, space and a degree of independence from China. It even got Japan and South Korea worried about Trump going off and doing his own thing. He even tore up an agreement that he had with G-7. He is shaking everything loose and India must decide what it wants and go out and get it irrespective. Pakistan expert Moeed Yusuf, director, South Asia programme, United States Institute of Peace, regards the deal as a huge positive step but says that to succeed, Trump would have to deal with the demand side for proliferation rather than just trying to get North Korea to roll back its nuclear programme. What does North Korea get by giving up its nukes? That is key. As for the subcontinent, Yusuf says, Currently, Trump has much more to do with China and the G-7 countries rather than focus on our issues.
Should Trump's Korean caper worry India?
Yet Trump's outreach to North Korea, merely months after he threatened to rain down fire and fury, underlines the unprecedented uncertainty that he has injected into the world. This has myriad ramifications for India, from an ongoing realignment of major power relations to a fluid Asian security environment. While Trump may be preoccupied with dealing with China, Russia, US allies and other woes of the world, India's policymakers are watchful of the unconventional, some say belligerent and brash, way the US president conducts foreign policy. Experts are concerned that Trump, emboldened by his self-proclaimed success in Korean diplomacy, may come down hard on India if it doesn't cooperate with what he considers his key objectives.
On the nuclear front, India's bid to get a full membership of the Nuclear Suppliers Group (NSG) may not get the kind of unconditional support US gave it in the past. Trump's transactional approach to issues may see him demand concessions on trade, having carped openly about the imbalance in favour of India, or expect conclusion of defence deals in return. So far, Trump has been tough on Pakistan about state-sponsored terrorism, but he is as keen on reaching a settlement in Afghanistan for which Islamabad's cooperation remains key. In the last days of the Obama presidency, there was even talk of offering Pakistan an India-type nuclear deal where it would lose its pariah status but in return commit to stringent safeguards on proliferation of nuclear technology and gradually give up its weapons. But with India expressing its displeasure, the US put such plans on the back-burner. With Trump, however, India can never be sure when he will spring a surprise and bring it back on the table if he wants to strike a deal in Afghanistan and push for Pakistan to dismantle its terror apparatus.
Another trigger that could see Trump call for reducing the salience of nuclear weapons in the subcontinent is a Mumbai-type attack resulting in a military face-off between India and Pakistan. Though Trump had talked about brokering a deal in Kashmir in his campaign speeches, he may not try to play peacemaker in the subcontinent till he can show tangible success in Korea. Menon advises, India should slap down firmly any attempt by Trump or his administration to play a broker in the subcontinent. Barack Obama tried and he was firmly dissuaded from doing so. Yet, as Krepon points out, if Trump shows a modicum of success in Korea, world powers may think that if war can be prevented in East Asia, why can't they work towards preventing a nuclear conflagration in South Asia, the most dangerous place in the world? India, though, has reason to be happy over the North Korean deal as it hopes it will cut off the proliferation network that flourished between Islamabad and Pyongyang that saw clandestine transfer of both nuclear and missile technology between the two countries, especially in the 1990s. Also, India welcomes a return to a rule-based nuclear order.
The Defence Push
Early in July, external affairs minister Sushma Swaraj and defence minister Nirmala Sitharaman will fly to Washington DC to engage jointly with their counterparts in what is termed as a 2+2 initiative to cut through red tape and work on major initiatives the two countries had agreed upon. These include extraordinary cooperation in defence technology and cyber warfare apart from the purchase of cutting-edge armaments. Yet, in the past months, a major irritant has appeared that may put India on the wrong side of Trump: the Countering Americas Adversaries Through Sanctions Act (CAATSA) passed in August 2017 and which came into effect this January. CAATSA targets countries doing business with Russian, Iranian and North Korean defence firms. It has massive implications for India, which is one of Russias largest military partners, with a number of defence deals in the pipeline for buying long-range anti-aircraft missiles, utility helicopters, frigates and leasing a nuclear-powered attack submarine, all of which are collectively worth over $12 billion. The most controversial of these is the purchase of four S-400 missile systems from Russia worth over Rs 40,000 crore. US lawmakers have specifically opposed this missile system on the grounds that it is non-compatible with US equipment even as India and the US try to forge interoperability, the ability to operate together, by conducting a large number of air, naval and army exercises.
This is important because in December 2016, the US designated India as a major defense partner, allowing it to access sensitive US technology like a $2 billion deal for Guardian drones that is currently under negotiation. Over the past decade, India's arms imports from the US surged from zero to $15 billion, second only to Russia, a position the US would like to maintain, if not surpass. The Modi government has been slow to move on signing defence deals with the US, partly because of an acute budgetary crunch and also because of a Make in India programme where it aims to make defence equipment indigenously.
India has also signed only one of the three foundational agreements that are meant to enhance interoperability with the US. It signed the Logistics Exchange Memorandum of Agreement (LEMoA) in 2016 but not the Communications Compatibility and Security Agreement (COMCASA), which will enable the installation of high-end communication systems in its platforms to talk to US systems, and Basic Exchange and Cooperation Agreement (BECA) which facilitates the exchange of geospatial data. India's recalcitrant approach has frustrated the US. This month, the US Senate inserted four new clauses under Section 1292 of the Act Enhancing Defense and Security Co-operation with India in its defence budget, which Indian officials say hand the US significant leverage and could be used by the Trump administration to extract concessions in the form of defence deals or compliance on contentious issues. The new clauses also empower the Trump administration to suspend CAATSA sanctions against India. A senior US official said, We need to raise the level of trust between us. We are committed to a strong India.
Pushing hard on trade imbalance
Another contentious issue that Trump will push hard on in the coming months is the trade imbalance between the two countries. The India-US goods trade, worth $74.5 billion (in 2017-18), is dominated by the export of products such as textiles, fisheries, pharmaceuticals and precious stones from India. In terms of value, aircraft, spacecraft and their parts, nuclear reactors, boilers, medical and surgical equipment, semi-precious stones and cultured pearls are the leading products that are imported from the US. India has a $21.3 billion trade surplus in its merchandise trade with the US (in 2017-18) and the attempt is to pressurise India to make imported goods from the US cheaper and thereby turn itself into a more attractive market for US companies.
Photo: Vikram Sharma
Trump chose Harley Davidson as a catchy way to drive home this point. The US company has a modest sale of over 4,000 bikes in India annually, though the global luxury motorbike-maker considers India a promising market. Trump mocked Prime Minister Narendra Modi for reducing the duty on luxury bikes like Harley's only from 75 per cent to 50 percent when he wanted it waived entirely. Trump now threatens to impose higher duties on products imported from India unless duties on Made in America products are reduced, if not eliminated. Already, the US has unilaterally slapped 25 per cent and 10 per cent import duties on steel and aluminum products, respectively. India has now approached the World Trade Organization, citing violation of global trade norms.
Trump has begun another retaliatory offensive on the trade front. In April, the office of the United States Trade Representative (USTR), the agency that advises the US president on trade policy matters and is responsible for developing America's international trade, announced its plans to review the concessional tariffs the US has been offering on export of about 3,500 goods from India to that country. India was among the 121 developing countries and 44 least developed countries that have been enjoying these concessional tariffs under a US scheme called Generalised System of Preferences (GSP), which facilitates trade opportunities for developing countries by offering them concessional tariffs for products that are needed for US consumers and businesses, and for inputs or raw materials used by US manufacturers. The USTR decision to initiate a GSP eligibility review of India was primarily based on complaints from two lobby groups, the US dairy and medical device industries, who said that they are not gaining reciprocal market access in lieu of the concessional tariffs offered to Indian exporters for a wide range of products.
The GSP review has become the most potent weapon in the hands of Trump, who minces no words to remind India that the continuation of the concessional tariffs will depend on how India reciprocates with tariff cuts and elimination of non-tariff barriers for US industries and businesses. The threat becomes serious as the United States is India's biggest export destination. India exported $47.88 billion worth of goods to the US in 2017-18, almost 16 per cent of the country's total goods exports of $303.38 billion during the year. The US is an extremely important market for India. In the textile and leather sectors, more than 50 per cent of exports go to the US. Roughly a third of our pharma exports are to the US. So is the case with IT and IT-enabled services, says Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations (FIEO). While the impact of GSP is being evaluated, India will have to gear up fast to meet the challenge. Biswajit Dhar, a professor of international economics at Delhi's Jawaharlal Nehru University, says the tendency to announce unilateral trade restrictions should be kept under check. I am worried that if it is not nipped in the bud, the US will get emboldened to do more. Economic mercantilism is at the heart of the Trump administration and in the coming months he is likely to show his displeasure if India doesn't play ball.
Illustration: Tanmoy Chakraborty
HOW INDIA SHOULD DEAL WITH TRUMP
For New Delhi, Trump's unpredictability and belligerence offer both opportunities and risks. On the one hand, the Trump effect has forced a realignment in major power relations that has opened up new strategic opportunities for New Delhi, particularly with China and Russia. Unnerved initially by the developments on the Korean Peninsula, from Trump's threat of war to his stunning turnaround, Beijing unusually found itself on the sidelines, to begin with. This coincided with a Chinese effort to mend fences with both India and Japan, as it sought to bring some stability to its periphery. In recent months, there also appear to be signs of a subtle shift in New Delhi's calculus, evinced in its outreach to China, through the April 28 informal Wuhan summit, which was proposed by PM Modi last summer, as well as an effort to bolster relations with Russia.
There is perhaps a greater readjustment on the Chinese side than ours, says former foreign secretary Shyam Saran. Maybe the unpredictability and uncertainty injected into the regional and global landscape requires them to readjust their policies, and to not leave themselves exposed on too many fronts. There was initially an assumption that Trump can be handled, they were confident enough to deal with the uncertainty. That has been shaken by the developments on the Korean Peninsula. We are also responding to these changes. Maybe our confidence in the Japan-Australia-US coalition has not crystallised as wed have expected. We don't entirely know what the US calculus is going to be.
As Saran puts it, A period of flux is also a period of opportunity. This also appears to be Delhi's thinking. As a senior official says, India is looking to be nimble and make the most of the present opportunities. If this presents us a greater opportunity to do more with China or Russia, we will do it. But this doesn't mean we will slow down what we are doing with the US or Japan. The idea is to do more with everyone. At the same time, there are signs that Trump's unpredictability is giving India some pause for thought. Trump has spoken of wanting to reduce America's security burden, evident in his dismissing what was once seen as crucial US-South Korea military exercises as a mere waste of money. This comes just as India has overcome what Prime Minister Modi described as hesitations of history to forge closer military ties with the US, from a landmark logistics supply deal to last years revival of the US, India, Japan, Australia quadrilateral, or Quad, security dialogue. This year, India chose not to invite Australia to join its annual Malabar exercise with the US and Japanese navies.
Survival game
Srinath Raghavan of the Centre for Policy Research in Delhi says this uncertainty has led to a wider attempt [by New Delhi] to bring in greater balance in sets of relationships with great powers. Given the huge swings in US policy, most evident in North Korea, there is a greater sense that New Delhi needs to hedge. There was a greater tilt to the US from the prime ministers September 2014 visit to Obama's January 2015 visit, when he was the chief guest at the Republic Day parade and both sides outlined a joint strategic vision for Asia, says Raghavan. Now, there is a feeling that nobody in New Delhi is confident that the US will be a permanently reliable partner. With Trump, the perception is everything will be about a quid pro quo and there'll be twists and turns we should be prepared for. Yusuf argues that the Trump administration deals on parallel tracks: While it could champion the NSG issue for India, it could also come down hard on trade.
Tellis believes that Trump has introduced a paradox in Indo-US relations. The strategic relationship with the US is in reasonably good shape though some irritants have emerged. Powerful US departments like national security, state and defense remain convinced that India is important for long-term strategic relations. But, as Tellis points out, Unfortunately, the people who have not got the memo are those who run the US's economic policy. Not just India, but even for American allies, the economic policymakers are divorced from the imperatives of the security establishment. So we have a schizophrenic administration which is unsettling for those like India that have to deal with the US.
Like Saran, Tellis believes the Modi government has subtly recalibrated its foreign policy to deal with the uncertainty, lack of continuity and unreliability that the Trump administration projects. He sees the recent moves by Modi to reset relations with China and strengthen relations with Russia as India taking out an insurance policy where it does not have to solely rely on the US. Menon thinks that, faced with a chaotic and incoherent US administration, given the frequent changes of key actors that Trump makes, India should get away with the old methods of dealing with the US. Whatever we want we should go to whoever can deliver in the US, whether the Congress, Pentagon, a business corporation, we are not dealing with a formal state as we knew it in the past. India must do what we want to do regardless of the pressure Trump puts, he says.
Trump is likely to step up his campaign to prove that he is the greatest dealmaker born. Korea is only the beginning. The Modi government must ensure that India cannot be blindsided.
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