International trade lawyer Urvi Tembey interviews Professor Amrita Narlikar, who is the President of the German Institute for Global and Area Studies. The professor also teaches International Relations at the University of Hamburg and is a non-resident senior fellow at the Observer Research Foundation (ORF). Prior to this, she was a Reader in International Political Economy at the University of Cambridge and the founding director of the Centre for Rising Powers. Professor Narlikar earned her PhD from the University of Oxford. She also held a Junior Research Fellowship at St. John’s College. She has numerous books and articles to her credit, and her research primarily focuses on world trade, emerging powers, and multilateralism. She recently authored a book called “Poverty Narratives and Power Paradoxes in International Trade Negotiations and Beyond” (Cambridge University Press).
Urvi Tembey is an international trade and investment lawyer based in Geneva, Switzerland. She recently graduated from the World Trade Institute, University of Bern, where she was a Director’s Scholar.
Urvi Tembey: To begin with, congratulations on your latest book, “Poverty Narratives in International Trade Negotiations and Beyond. Before getting into specific questions on India’s economic policy and the World Trade Organisation (WTO), It would be great if you could just lay out the key arguments in your book and what inspired you to write on how poverty is fielded by countries?
Professor Amrita Narlikar: In the book, I study a paradox, and I argue that powerlessness has emerged as a political tool, or even a formidable weapon, in international negotiations. Further, effective and persuasive narratives about poverty are bringing about a fundamental transformation of powerlessness itself into a source of power. So, I focus specifically on the behaviours and outcomes in a particularly polarising area of bargaining—international trade. A lot of the book is about the politics of international trade and how powerlessness and poverty are being used as a source of empowerment in this polarising area of politics.
However, I also illustrate wider applications of the argument in other settings and issue areas. The empirical cases reveal some inspiring examples of agency and empowerment of marginalised communities. So, this is the positive side of the story. I also show that the wide-ranging and highly effective use of arguments on poverty and powerlessness of the genuinely poor and weak constitutes only one aspect of the story. Overuse and misuse comprise the other side. And so, in the book, I show how the use of poverty narrative has emerged as a winning strategy. However, repeated misapplication of the narrative risks blunting this weapon. The interesting contributions that I think this book makes are on the lifecycles of narratives: How do the narratives emerge? What makes a winning narrative? How do narratives change in the hands of different actors? And, how do they dissipate or die?
And, I argue in the book, that successful narratives tend to work like asset bubbles. So, as an increasingly larger number and diversity of actors become aware of their uses, the temptation to overuse and misuse these narratives also increases. And then, the bursting of the bubble generates costs for the system as a whole. And, in the case of the poverty and powerlessness narrative, these costs will likely be greatest for the most vulnerable members of society, many of whom actually stood to benefit the most from the narrative. In the concluding chapter, I also offer some policy recommendations on how to build successful and winning narratives.
U: Taking on from your point on the politics of international trade and how the poverty narratives have been used by countries, specifically India, to further the promise to alleviate poverty, Prime Minister Narendra Modi was initially looked at as a reformist leader who could implement the Gujarat model of development on a national scale. However, we see that a reeling economy in the middle of a pandemic induced global recession seems to have made India more inward-looking and insular. So, the government, through its flagship “Atmanirbhar Bharat Abhiyan”, or the self-reliant India economic stimulus package, is seeking to shore up manufacturing capacities and also build resilient supply chains. It is doing so through import substitution policies alone with infant industry projects. My question, therefore, is two-fold. Firstly, is the idea of self-reliance a return to protectionism? Secondly, will these policies help India navigate global headwinds like economic nationalism, the nationalism of supply chains and a global recession?
N: Both questions are important and timely. To me, “Atmanirbhar Bharat Abhiyan” looks worryingly close to the old ideas of self-sufficiency, that we had, in fact, seen being propagated by Nehru. The language being used is of self-reliance, but it’s difficult to see how fundamentally s different this is from some old ideas. This is one of the reasons why I think the Modi regime is really interesting, as we see two different types of narratives here. On the one hand, we see the narrative of infusing dynamism in the Indian economy. For example, there is a lot of talk about the importance of economic freedom. However, this is interestingly accompanied by an old-fashioned narrative of self-reliance and protectionism.
And now, coming to your second question, I think that there is a danger that in the attempt to restructure its value chains in the direction of self-reliance, India will end up repeating past mistakes. If Modi does indeed, and this government does indeed, take the country down the route of self-sufficiency, we risk undoing the gains of the past nearly thirty years and impoverish what is still a poor country in per-capita terms. And so, to develop a constructive and sustainable version of “Atmanirbhar Bharat”, a self-reliant India, India will need to work closely with like-minded allies that share its values and can be relied upon. A change is necessary. That is clear. However, India should avoid going it alone.
One of the problems is that the intellectual debate seems to be divided. So, for example, for mainstream economists, whatever the question, the answer is always globalisation. Of course, the answer is globalisation. However, with what rules and with what countries do you want to go in with deeper integration? Right now, the debate is either that of the breakdown of globalisation or that the successes of globalisation. However, I argue that there is a need for something in between these two. That is, we do need globalisation and an open economy, but this needs to come with allies that you know will not weaponise the dependencies. This is because the assumption that economic prosperity will always lead to peace is not necessarily true anymore. So, that doesn’t mean we give up globalisation. However, we need a different form of globalisation. While political scientists and international political economists are coming to realise this, I don’t think mainstream economists are waking up to this yet.
U: Getting into the question of weaponisation of dependencies, we see that this is very clear between India and China, and the trade deficit that exists between the two countries. Specifically in light of the recent border clash between India and China, we say a growing sentiment in India to boycott Chinese goods and investments. In fact, the government has imposed tariff and non-tariff measures against almost 300 Chinese goods that come into Indian territory. This was accompanied by the decision to ban 59 Chinese apps. India is even reconsidering MoUs that have already been signed with Chinese companies. In fact, even prior to the clash, the government had denied Chinese FDIs automatic approval into Indian territories to prevent the hostile take-over of countries. Aside from the issue of legality, how can India manage its dependencies on China in terms of trade? Further, how should India approach the question of security concerns while also accounting for India’s economic growth?
N: There are two important considerations that we have to keep in mind. Firstly, we are living in a world where we have already seen the weaponisation of interdependence. Here, I am referring to the work that my colleagues in the United States, including Henry Farrell and Abraham L. Newman, are doing on weaponised interdependence. We also see the weaponisation of interdependence happening very brutally amidst the coronavirus pandemic in global health chains. This is very serious.
So, the first point that we need to recognise is that there are going to be some necessary trade-offs between prosperity and security. For example, in India, we will not get the cheap imports from China if we continue along that path we are on. However, while all the countries that are looking to evaluate and restructure their value chains will be less prosperous, they will be more secure. Further, the more closely we work with reliable allies, and the more we diversify our value chains in the direction of these reliable allies, the more we will be able to preserve prosperity, and further enhance security.
The Indian economy does have higher levels of integration, for want of a better word, with China. This is also the case in Europe and this is also the case in the US. The US has been disengaging more and more towards decoupling, but decoupling cannot happen overnight because that would be very damaging. And so, this is why it needs to be done in a very deliberate way, ideally in coordination with other countries that share these concerns. Hence, although the moves that India has made are very important especially in light of the border conflict and that history that India has with China, a difficult history, to really exploit and to harness the gains from these steps, India should be working with other allies.
U: Coming then to the broader question about international trade and the role of institutions, in this case, the WTO, recently in an article by Vijay Gokhale, India’s former foreign secretary, wherein he mentions that China doesn’t need to overthrow the current global order when it can simply take it over. And, in fact, we have already seen China take over four out of the fifteen specialised UN agencies. Do you see a similar hijacking of the WTO and China remaking the global trade regime in its image? And, if this is true, how can India challenge such capture of institutions?
N: There are reasons to be concerned. But, for me, the real concern is that the liberal democratic world—and for me, this includes the US, the EU, Canada, Japan, and others—is doing very little to offer a counter-narrative to China. So, this relates back to also my book, and what we’re seeing is world leaders keep repeating platitudes on reform without recognising how fundamental this need for reform is.
Further, despite the problematic way in which Trump is stomping all over existing regimes, not everything that the administration is saying about the WTO, or even the WHO, is wrong. We, in Europe and India, should also be taking this as an opportunity to revamp the system. However, since the Trump administration is doing this in a non-nuanced manner, the supporters of the position face a lot of Trump-bashing. This is then followed by a swing in the opposite direction through a declaration of love for the WHO or the WTO in its current form.
My really big concern is that if we try to paper over the cracks, which is what the liberal discourse is doing so far, it’s reiterating the mantra that multilateralism is a good thing, which we all know. We all know that multilateralism matters and it’s valuable. But, if we don’t recognise that there are some serious problems, also with the WTO, the way in which China has gamed the WTO, the way in which the WTO really is not an organisation that was built to address questions of weaponised interdependence, and it needs serious updating. If we don’t address these issues, if we just keep papering over the cracks, then I’m worried that the system will collapse beyond repair. It will collapse completely. Right now is the time for us to be saying, “look, we should be reforming it in a serious way, instead of just saying we hate what Trump is doing, therefore, we’re going to uphold the WTO and mutter something sweet about the need to reform and carry on as usual.”
A lot of people fixate on the issues that the US has brought out, probably because it has paralysed and demobilised the dispute settlement mechanism. However, the US is not alone in raising these issues. There are several other countries, who may not have done it as loudly as the US, that have brought out similar issues. Those are the concerns that I think we need to take seriously and address as they affect all of us.
U: There are several challenges that the WTO has faced, and various issues have come up, such as the Multi-Party Interim Appeal Arbitration arrangement in the absence of an appellate body. Consequently, several countries have been trying to secure the continuance of the rules-based trading system. What role can India more specifically play in ensuring this?
N: I have really mixed views on the parallel dispute resolution system in the WTO. On the one hand, it is an absolutely necessary mechanism that we need in the absence of an appellate body. On the other hand, it is a part of the papering over the cracks in order to sustain the system somehow. This is, therefore, not a sustainable approach.
Coming to your bigger question on India’s role in reforming trade multilateralism, two major issues need to be addressed to tackle this seriously. Firstly, we need to look at weaponised dependence. For example, the trade policy review edition and the trade monitoring reports find it difficult to criticise countries on subsidies. In fact, it is difficult for them to talk about subsidies altogether. We know there has been a serious problem with this. With China and others, it is a part of the weaponised interdependence and securitisation of trade. So, the WTO needs to be updated on this front. If the WTO fails to look at itself beyond its image as that of an economic institution, we will fail to get a sustainable solution. To view this effectively, it needs to bring in more voices from a variety of disciplines and also from other countries. This will help in diversifying the discussion to achieve a useful set of solutions.
The second extremely important issue is caused by the perception of the WTO, which has always been that of a technocratic organisation that deals with trade issues. The WTO does not have a clear, convincing narrative on why people should care about trade liberalisation, which has proven to be a good thing. We know that trade liberalisation has been a key vehicle in lifting millions of people out of poverty. We do not want to lose that mechanism. But, if people don’t understand how it matters, it will be very difficult to build political support for this. On the other hand, we have some strong counter-narratives coming from, for example, President Trump, who blames it for Americans losing jobs and the increasing inequality in the US. If we, that is people interested in preserving the multilateral system, don’t have a convincing counter-narrative, then we will have no chance. Therefore, the WTO does need to engage more with the outside world.