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Ep. 184: The India-EU FTA: triumph of hope over experience?
This is a free preview of a paid episode. To hear more, visit rajeevsrinivasan.substack.com
I’m sorry to be so cynical so early, on the very day it was signed, but let me be honest: the much-ballyhooed (“mother of all trade deals”, quoth Ursula von der Leyen, boss of the EU) signing of the Free Trade Agreement between India and the European Union leaves me cold. Or maybe just underwhelmed. Because the words that come to mind are “desperation”, “buyer power”, and maybe “shotgun wedding”, or perhaps, as Hari, a friend, said, “rebound chicks”.
Ok, so I am bad, but somehow, “revenge porn” also seems oddly appropriate. Are the Europeans now going to spill the beans about all their ahem… rendezvous with their erstwhile boyfriends?
Bottom line, since I am a pessimist, I think this isn’t going to end well. If I were an optimist, perhaps I’d have said the inflated expectations will come to nought.
The first clue is that India and the EU have been negotiating this trade deal for twenty, yes twenty, years. And now it’s a done deal in weeks. Did someone say, “shotgun wedding”?
The second is that the EU has huge agricultural surpluses from coddling their farmers, referred to memorably by my favorite Whitehall simps, The Economist magazine, as the “butter mountain” and “wine lakes”. I really don’t think Euro-farmers are going to grin and bear it when India refuses their stuff, and worse, Indian agri-products start showing up there.
The third is that it seems like it was only yesterday that the Europeans were, in their usual supercilious manner, scolding India for not following their edicts about cutting off all trade with, and in effect un-personing (or whatever the equivalent is for a country) Russia.
The fourth is that their media, especially Deutsche Welle, has kept up a steady stream of invective against India, allegedly the epicenter of colossal Hindutva crimes against sundry cuddly minorities such as Kashmiri separatists, Khalistani splittists, Rohingya illegal aliens, und so weiter. (Of course the BBC, The Economist, The Guardian et al are in a different, exalted league altogether, but I guess after Brexit, I can’t blame the EU for their sins).
I can sure I can think of several other reasons, which you, gentle reader, may or may not resonate with, but you get the drift.
The good reasons, of course, are there:
* Trump has basically abandoned the EU and hinted at winding down NATO. No more free lunch on defense. No more preferential treatment as good white countries.
* The Chinese market has essentially slammed shut for Europeans. The perigee of this is the fact that Volkswagen is now planning to sell what in effect are white-labelled Chinese-designed and -built cars in China. To me that spells total surrender especially because Chinese EVs produced cheaply, at scale, are now eating them for breakfast everywhere. So now they need a new market. Why, India has 1.4 billion people! Bring on the BMWs! Because otherwise the crown jewels of German engineering, both the entire automotive industry and the famed mittelstand, are going to bite the dust. Hint to India’s 180 IQ mandarins: bone up on “buyer power”.
* Europe needs a supply chain that is independent of both the US and China to the extent possible. India may well provide a good part of it. For instance, in computing, it needs to stop being so cruelly dependent on US Big Tech, as argued by a Lund University professor in Europe wants to end its dangerous reliance on US internet technology (https://theconversation.com/europe-wants-to-end-its-dangerous-reliance-on-us-internet-technology-274042). Amen, brother. Ditto India, and maybe a few EU GCCs in India will do the trick. Or maybe they could just phone Sridhar Vembu.
* Europe is falling off a demographic cliff at warp speed. They simply will not have the manpower, especially as any growth there will be primarily from immigrants. India will not reach zero population growth for some time, and therefore skilled Indian migrants on short term work visas will be positive
All of these are good for the EU, but what’s in it for India? As my friend Bapa asked, “So what is India getting? Are Europeans going to buy Indian shrimp?”
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By Prof. Rajeev Srinivasan
5
11 ratings
This is a free preview of a paid episode. To hear more, visit rajeevsrinivasan.substack.com
I’m sorry to be so cynical so early, on the very day it was signed, but let me be honest: the much-ballyhooed (“mother of all trade deals”, quoth Ursula von der Leyen, boss of the EU) signing of the Free Trade Agreement between India and the European Union leaves me cold. Or maybe just underwhelmed. Because the words that come to mind are “desperation”, “buyer power”, and maybe “shotgun wedding”, or perhaps, as Hari, a friend, said, “rebound chicks”.
Ok, so I am bad, but somehow, “revenge porn” also seems oddly appropriate. Are the Europeans now going to spill the beans about all their ahem… rendezvous with their erstwhile boyfriends?
Bottom line, since I am a pessimist, I think this isn’t going to end well. If I were an optimist, perhaps I’d have said the inflated expectations will come to nought.
The first clue is that India and the EU have been negotiating this trade deal for twenty, yes twenty, years. And now it’s a done deal in weeks. Did someone say, “shotgun wedding”?
The second is that the EU has huge agricultural surpluses from coddling their farmers, referred to memorably by my favorite Whitehall simps, The Economist magazine, as the “butter mountain” and “wine lakes”. I really don’t think Euro-farmers are going to grin and bear it when India refuses their stuff, and worse, Indian agri-products start showing up there.
The third is that it seems like it was only yesterday that the Europeans were, in their usual supercilious manner, scolding India for not following their edicts about cutting off all trade with, and in effect un-personing (or whatever the equivalent is for a country) Russia.
The fourth is that their media, especially Deutsche Welle, has kept up a steady stream of invective against India, allegedly the epicenter of colossal Hindutva crimes against sundry cuddly minorities such as Kashmiri separatists, Khalistani splittists, Rohingya illegal aliens, und so weiter. (Of course the BBC, The Economist, The Guardian et al are in a different, exalted league altogether, but I guess after Brexit, I can’t blame the EU for their sins).
I can sure I can think of several other reasons, which you, gentle reader, may or may not resonate with, but you get the drift.
The good reasons, of course, are there:
* Trump has basically abandoned the EU and hinted at winding down NATO. No more free lunch on defense. No more preferential treatment as good white countries.
* The Chinese market has essentially slammed shut for Europeans. The perigee of this is the fact that Volkswagen is now planning to sell what in effect are white-labelled Chinese-designed and -built cars in China. To me that spells total surrender especially because Chinese EVs produced cheaply, at scale, are now eating them for breakfast everywhere. So now they need a new market. Why, India has 1.4 billion people! Bring on the BMWs! Because otherwise the crown jewels of German engineering, both the entire automotive industry and the famed mittelstand, are going to bite the dust. Hint to India’s 180 IQ mandarins: bone up on “buyer power”.
* Europe needs a supply chain that is independent of both the US and China to the extent possible. India may well provide a good part of it. For instance, in computing, it needs to stop being so cruelly dependent on US Big Tech, as argued by a Lund University professor in Europe wants to end its dangerous reliance on US internet technology (https://theconversation.com/europe-wants-to-end-its-dangerous-reliance-on-us-internet-technology-274042). Amen, brother. Ditto India, and maybe a few EU GCCs in India will do the trick. Or maybe they could just phone Sridhar Vembu.
* Europe is falling off a demographic cliff at warp speed. They simply will not have the manpower, especially as any growth there will be primarily from immigrants. India will not reach zero population growth for some time, and therefore skilled Indian migrants on short term work visas will be positive
All of these are good for the EU, but what’s in it for India? As my friend Bapa asked, “So what is India getting? Are Europeans going to buy Indian shrimp?”