SUBMOTIONS:
1) Trade barriers are important from the domestic economy’s point of view
Trade barriers, on one hand, protect domestic producers from foreign competition. Especially in a country like India, which has a thriving SMEs sector, the domestic producer does not have to compete with the cheaper and better quality foreign products in the market. One can assess the damage caused to the local producers by the current sea of Chinese goods in the Indian markets. On the other hand, restrictions on importing cheaper raw materials raise the cost of production (and consequently, the price of the good) and end up hurting the consumers. Since most consumers are also producers of some goods/services, the situation becomes more complex than it seems. No trade barriers at all and completely closing the economy are obviously infeasible options for most countries. So we debate on the direction of the trade barriers. Should they rise or fall, from their existing level?
2) U.S.-China trade war should continue from India’s point of view
The trade war between USA and China started with US imposing tariffs as much as 25 percent worth $34 billion on Chinese imports. While China responded with retaliatory tariffs of 25% on US goods worth $34 billion, including soybean, automobiles and marine products. Numerous retaliatory statements kept coming from both the sides to worsen the situation. India, which has a trade deficit of $51 billion with China, may reap the benefit of the US-China trade spat as it may seek opportunities to reduce its own trade deficit. It has also been argued that China would be looking to end USA’s hegemony of its technology companies. This is where India seems to be most capable of. However, U.S.-China trade war sentiments, if nurtured, could also hint towards similar tariffs on Indian products in future. Amidst these conflicting ideas regarding the current situation, what should India’s stand be?
3) Immigrants are a threat to any country
It’s not just the movement of goods and services across borders but also the movement of people which has come under the spotlight in recent years. From a country’s point of view, it has been argued that migrants have taken the jobs and livelihood of the locals, which has fueled anger and dissatisfaction among the natives. On the other hand, liberals have slammed this inward looking thought process. They believe that the economy will benefit the most if efficient labor, irrespective of its origin, works in the economy. The supporters of stricter border regulations have also argued that immigrants have been a threat to the society as a whole. They believe that changing demography of the society will lead to loss of control of natives over their own lands and its policies. Rising terrorist activities and refugee crisis has intensified such beliefs. But these beliefs have been widely criticized for being xenophobic and racist. On economic and humanitarian grounds, what should be the ideal immigration policy outlook of a country?
4) The international organizations are not doing the best they can in their capabilities, to ensure a boundary-free world.
Soon after Second World War, it was realized that there was a need to have international organizations that would serve as world’s peace keepers. These organizations would continually strive towards restoring peace and prosperity in the event of a political turmoil, an economic crisis, a trade war or any such friction that might arise between and within countries. One of the UN’s sustainable development goals (SDG’s) for 2030 clearly puts out the following, “Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies”. However, beneath this utopia there is disenchantment. Are these institutions really helping the world order? Is there a “big brother” who is influencing decisions? And if there is, are these organizations doing the best they can even after the obligation to serve one big shark? Let’s bring out the truth and debate the efficacy of these international organizations, given the constraints they face.
Sub-motion 1: Immigrants are a threat to any country. (Against the motion) Speaker: Rishu Raj
Recent researches have shown that migrants created around 20 billion pounds of wealth for UK between 2000-2011 and also generated huge employment opportunities for natives. Similar conclusions have been drawn by studies conducted by World Bank and McKinsey Global Institute for US and the world as a whole. 50% of “Unicorns” in US has been created by so called “Outsiders”. Countries can counter their demographic challenges by allowing for immigration. Apart from the economic reasons, immigration is good on humanitarian ground, as the benefits of diversity due to it are evident. Accepting immigrants also helps in attacking the narrow mindsets like xenophobia and islamophobia which is rapidly growing among people in the recent past. Thus, immigration is overwhelmingly positive for global economy as a whole and it should be given a top priority while a nation prepares its foreign policy. (For the motion) Speaker: Ashwin K Around the world today, populist and protectionist forces are on the rise and immigration is one of their major concerns. Despite its benefits, it is essential to pay attention to the many downsides of immigration. Immigration harms the unskilled sections of the host economy in various ways and burdens the Welfare state in different countries. It influences and changes the endangered cultures of many peoples and has negative political externalities. While it is not prudent to completely stop free migration, ignoring its harms betrays a serious lack of understanding of the world and how it functions.
Sub-motion 2: Trade Barriers are beneficial from a domestic country's point of view. (Against the motion) Speaker: Manali Sharma
Empirical studies conducted in the past few decades support the view that open economies grow significantly faster than closed ones or when closed economies remove their trade restrictions, they tend to have higher growth rates. India’s economic performance in the postreforms period had many positive features. Even in USA, tariffs put on steel and aluminium may only be beneficial for the steel and aluminium industries and detrimental for the overall economy as a whole. Having trade barriers isn’t necessarily bad per se. At times, they are unavoidable too. However, the duration for which they need to exist is a debatable topic and requires extensive study. Also, trade barriers can’t be used as a proxy for structural deficiencies which exist in an economy. It is obvious that, expanding trade hurts some people in the short run, especially those in import-competing sectors who have to find new jobs. That fact may call for a robust safety net and effective retraining. But it does not undermine the conclusion that free trade raises average living standards and overall prosperity.
(For the motion) Speaker: Abhiruchi Rathi
Virtually all of today’s developed countries actively used interventionist trade policies aimed at promoting infant industries during the 18th and 19th centuries. By preaching free trade to less advanced countries today, it is like someone trying to “kick away the ladder” with which it had climbed to the top. Infant-industry theorists argue that industries in developing sectors of these economies need to be protected to keep international competitors from destroying their infant industry, till they can attain economies of scale (after which they exhibit downward sloping average cost curves) similar to that of their global competitors, so as to build their domestic production capacities which drive incomes and employment in the long run. Due to such barriers, trade patterns established due to historical accidents may persist even when new producers could potentially produce at much lower costs. A large country such as India can benefit from trade barriers as its distortion losses can well be compensated by the terms of trade gains, furthered by the observation that the producer surplus does not accurately capture benefits from imposing tariffs. Despite having a thriving SMEs and a comparative advantage in labor intensive goods such as textile, India is not able to exploit its advantage due to cheap imports of labor intensive and cheap exports of capital-intensive goods. Free trade also propagates institutions such as WTO and IMF; substantial political hegemony underlines such institutions wherein India having lesser bargaining power finds trading agreements usually set against its favor. Equality is compromised on the pretext of efficiency, which in many cases is also seen to be lower, for instance in the case of Sub Saharan Africa, which was forced to install barriers and consequently suffered humongous losses and regression over 20 years. Henceforth, developing countries must have autonomy in taking decisions regarding trade liberalization with respect to their conditions and must not be forced to adopt a "one size fits all" solution.
Sub-motion 3: The International Organisations are not doing the best they can in their capabilities to ensure a boundary-free world
(For the motion) Speaker: Pragati
The international organisations – IMF, World Bank and WTO are considered as the pillars of economic globalisation. The asymmetric way of management by these organisations deserves prodding. The people who represent these organisations are trade ministers and finance ministers of member countries which lead to “democracy deficit” as they only represent a group of people. For instance, the Uruguay round reflected the interest of producers as opposed to users. A differential voting system is followed in these organisations which are based on wealth of nations. Also, US effectively has veto power over all the decision making of IMF. US has been imposing non-tariff barriers in the name of VERs and quality standards while forcing developing countries to open their market. The imposition of conditionalities when seeking assistance from IMF threatens national sovereignty. (Against the motion) Speaker: Sumanjay Dutta The neo-realist approach argues that international institutions are and always will be fundamentally ineffective, as they cannot prevent States from being self-interested and engaging in power politics. Scholars such as John Mearsheimer believe that institutions only have marginal power, giving way to an arena of power relations between States, making them a reflection of the distribution of power in the international system. This is contested in Keohane and Martin’s response, as they develop the theory that “institutions are created simply in response to state interests, and that their character is structured by the prevailing distribution of capabilities.” Mearsheimer challenges this by stating that institutions only promote peace by manipulating the actions of Member States. They advocate cooperation in a world that is intrinsically competitive so naturally States will use this pretext to take advantage of others. To this end, neo-realists assert the irrelevance of international institutions, as they believe it does not alter the self-interested anarchic system of States. This idea that institutions play a non-role in international relations is a reductionist one as the argument that States will not respond to constraints and opportunities given by these institutions is greatly flawed. This can be exemplified by the UN’s regulation on the use of military force, many States are happy to comply with these standards as it reduces the risks and costs of engaging in conflict whilst at the same time working towards disarmament.
Sub-motion 4: U.S.-China trade war should continue from India’s point of view (For the motion) Speaker: Abhishek
The US China Trade war presents numerous opportunities for India. Firstly, Indian companies can manufacture exports for the United States that are currently being imported out of China, and replace these companies. This will generate employment and provide impetus to the manufacturing sector in the longer term. Secondly, lot of US based companies have their supply chains originating in China, but the tariffs may force them to change their stance, and this foreign investment can be diverted towards India. India can provide an alternative market to Chinese firms, and they may be able to sell goods to India at more reasonable terms as they do not have adequate domestic consumption to absorb this excessive supply. Lastly the tariff escalation launched by the US has forced countries it provides India with an opportunity to re-negotiate its bilateral trade agreements at better terms with China.
(Against the motion) Speaker: Sanskriti Rawat
The impact of trade war between the superpowers can have implications which may affect the global as well as Indian economy. This game of retaliation and trade protectionism has dropped the value of rupee to an all-time low. With Trump imposing a fresh round of tariffs, there will be a negative impact on the deficit of India, causing a chain reaction of sorts. Indian economy may also emerge as a dumping ground for Chinese goods which were supposed to flood the US market. A greater worry for India could be the indirect impact in the form of potential cascading inflationary impact. In the long run, a full-fledged trade war is bad news. It invariably leads to higher inflationary and low growth scenarios.
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