By Banikinkar Pattanayak

Copyright indiatimes

John Phillip Lipsky

American economist John Phillip Lipsky says globalisation isn’t dying but its form may be changing in times of Trump tariffs. In an interview with ET’s Banikinkar Pattanayak, he says the US tariffs may be aimed at inducing other nations to get into trade deals, and that there is no clarity on what the Trump administration seeks to achieve through its new visa policy. Edited excerpts:On US tariffs & globalisation It is hard to believe that globalisation in the sense of broad economic and financial interrelations is going to die. In fact, we should recall that the system that was originally conceived was not only designed to be global, but also designed to be based in law.It was really only in the 1990s, when the Soviet Union collapsed and both China and India entered the global trading system in the real way, that you could say we had a global system that was truly in the spirit of the initial vision. The system has been evolving. Now, are folks going to retreat to regional or other politically defined trading and financial blocks that virtually excluded relations with others? I don’t think so. Now, is the form (of globalisation) going to remain the same? I would say, there’s a great uncertainty today.On the way forward I would say the system is in flux. Even within the pre-existing system, there were problems and frictions. If we’re talking just about trade, the initiatives of the Trump administration have dealt primarily with trade in goods, not trade in services. If you ask if the idea of the Trump administration is to eliminate the WTO, I don’t think so. Their (Trump administration’s) approach has been a piecemeal one-of approaching individual countries or groups, such as the EU, and demanding a renegotiation. It is not clear if the arrangements that the US seeks will be WTO-compliant. The main point is because there hasn’t been any clarity on the part of the administration about its overall standards, it’s been very hard to discern exactly where we’re going to end up.Live EventsOn reforms to blunt tariff hit My understanding from what’s publicly available is that latest US measures are in response to India’s imports of Russian oil. I can’t speak for the Trump administration. My understanding is they’re not suggesting that the 50% tariff is their goal or a permanent measure. It seems that in virtually every case, they announce measures as an inducement for (trade) negotiation. But the terms seem to be very different from one negotiation to another. The goal of the US, it seems, is to derive the best deal possible using the threat of punitive tariffs. So, even in the case of India, since it seems that these measures were taken for maybe geopolitical reasons, the negotiations are not exactly based on commercial principles. But some of the basic rules of post-World War system seem to be at risk, such as the most favoured nation treatment. On US’ H-1B visa policiesWhat we’ve seen so far is the Trump administration has taken very striking action with regard to trade in goods, and not trade in services. This (visa restrictions), of course, appears to be very disruptive with regard to the freedom of the movement of labour. From the US administration’s point of view, it’s a step towards ending illegal immigration. And this is a measure that I think had wide popular support because we were accumulating in the US a fairly large population of permanent residents that were undocumented. The H-1B visa issue is also a little puzzling. Is it to keep a highly skilled immigrant out? Is it once again to derive a revenue source that they think is underutilised? It’s very hard to understand exactly what it is they’re driving at.Add as a Reliable and Trusted News Source Add Now!
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