The collective West's blatant use of finance, trade, the dollar, and the euro as weapons makes the fragmentation of the world economy not only inevitable but also irreversible, IMF Executive Director for Russia Aleksei Mozhin said.
"The blatant use by the West of international trade, finance, the dollar, and the euro as a weapon makes the fragmentation of the world economy not only inevitable but also irreversible," Mozhin said.
As an example of the irreversibility of the world economy's fragmentation, Mozhin pointed to the consequences of the West's sanctions against Russia, which led to the temporary disappearance of certain categories of goods in the country.
"We have learned this lesson, we will never allow ourselves to be so dependent on imports again, at least in strategic sectors of the economy," he said.
"Such as, for example, the civil aviation industry, where we have more than a century of engineering tradition. By the way, the so-called process of deglobalization began long before the events in Ukraine and the imposition of draconian sanctions against us."
The world suddenly realized that globalization is forcing all countries to follow the path of specialization to the detriment of economic diversification, pushing countries rich in natural resources to specialize in their extraction and export, Mozhin noted. Therefore, deglobalization or fragmentation will continue, the official concluded, adding that the policy of containment toward Russia is a deliberate attempt to hinder its economic development.
Moscow responds to 11th round of EU sanctions
Russia has “significantly expanded” the number of European Union officials and citizens of member states on its own blacklist in response to yet another ‘package’ of EU restrictions, the Foreign Ministry in Moscow announced on Friday.
EU actions are “illegitimate” and “undermining the international legal prerogatives of the UN Security Council,” the Russian Foreign Ministry said in a statement. Any “unfriendly actions” by Western countries will continue to be met with “a timely and adequate response.”
In retaliation for the latest round of sanctions, Russia has blacklisted personnel of EU law enforcement agencies, “state and commercial organizations” of member countries, as well as EU citizens “involved in providing military assistance to the neo-Nazi regime in Kiev.” That assistance was defined as anything from supplying military equipment and fundraising to providing logistics, intelligence and communications service.
European parliamentarians who are “promoting a confrontational agenda with Russia” have also been blacklisted, the Foreign Ministry said. The full list of sanctioned individuals has yet to be made public, however.
Brussels announced the 11th round of sanctions against Moscow on Thursday, ranging from punishing third countries for trading with Russia and banning additional Russian media outlets to blocking ships suspected of carrying Russian cargo.
The EU has also ordered the assets of 71 persons and 33 entities frozen due to their alleged involvement in “deportation” of Ukrainian children – as the US and its allies have described Russia’s evacuation of civilians from areas under attack by Ukrainian artillery.
The bloc has insisted that its economic blockade of Russia is working and hurting the “war machine” involved in the Ukraine conflict. Moscow has shrugged it off, however, pointing to its drastic increase in trade with China. In May, Russia posted the lowest year-over-year inflation in Europe at only 2.3%, compared to the 7% average for the Eurozone.
India and US agree to end WTO disputes in boost to bilateral trade
India and the US have agreed to end their six trade disputes at the World Trade Organization (WTO) in a bid to boost bilateral commerce and further strengthen economic ties.
The two nations are expected to put in place a strong mechanism to resolve trade-related issues bilaterally to avoid the cumbersome process of filing complaints with the WTO.
India has also agreed to remove retaliatory customs duties on 28 American products, such as almonds, walnuts, apples, among others.
The concessional move comes amid Indian Prime Minister Narendra Modi’s maiden state visit to the US, which concludes on Saturday. The tariffs are likely to be removed in the next 90 days, except the one filed by the US in 2012 regarding India’s poultry trade barriers.
The US, for its part, has removed Indian export subsidies and domestic content requirements for solar cells. However, tariffs on Indian steel and aluminum will remain in place.
In 2018, then-US President Donald Trump slapped duties on steel and aluminum imports, invoking Section 232 of the 1962 Trade Expansion Act and citing national security concerns. India has lifted its tariffs without seeking removal of these Trump-era restrictions.
International trade expert Biswajit Dhar told the Indian wire service Press Trust of India (PTI) that the “positive announcement” would help in promoting bilateral trade between the two countries.
“We now have to see what trade-offs happen between the countries to finally end these trade disputes. The announcement overall looks positive. A strong mechanism needs to be put in place so that such disputes do not occur and be resolved bilaterally through mutually agreed solutions,” he said.
“It is a positive development. We were eagerly waiting for this decision. This will give a fillip to India's exports to the US,” he told PTI.
The six disputes comprise three initiated by each country.
Since 1948, trade among market economies has been solely governed by the General Agreement on Tariffs and Trade (GATT), which set certain ground rules for tariffs and trade. In 1994, the GATT was folded into the rules of the WTO.
Although the GATT/WTO system doesn’t mandate any particular level of tariffs, it bars countries from imposing new tariffs or other restrictions on international trade except under certain specified circumstances.
Article XXI says that a nation may take action “which it considers necessary for the protection of its essential security interests,” which has been invoked by the administrations of both Trump and current President Joe Biden against nations that they consider hostile towards the US.
In 2018, the US imposed 25% and 10% import duties on certain steel and aluminium products, respectively, on grounds of national security.
India retaliated the following year and imposed customs duties on 28 American goods, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents. India also filed a complaint against the US at the WTO for its duties. The disputes remained a sticking point until the latest resolution of all but one.
India’s foreign secretary, Vinay Mohan Kwatra, briefed the media in Washington on the latest resolution of the WTO disputes.
“Out of the seven outstanding WTO disputes between India and the US there has been a resolution for six…The seventh one remains under discussion. The resolution of the WTO dispute has happened between the two governments, the United States Trade Representatives (USTR) on the US side, and the Ministry of Commerce on the Indian side. Those are technical discussions based on which the two countries have decided that six of the seven stand resolved.”
Over the past decade, India and the US have requested consultations regarding the countervailing duties imposed by both sides, arguing that the measures are inconsistent with WTO trade norms.
According to WTO rules, a member country can file a case with the Geneva-based multilateral body if it feels that a particular trade measure violates the norms. Bilateral consultations are the first step to resolving a dispute. If the sides are unable to resolve the matter this way, either of them can request a dispute settlement panel. The panel's ruling or report can be challenged by the WTO's appellate body.
The appellate body is not currently functioning because of differences among member countries regarding the appointment of members. The US has been accused of blocking the appointment of the members.
Meanwhile, several disputes are still pending with the body.
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