India seems to be directly benefiting from the dispute that US President Trump has started with the European Union in the name of Greenland. Now everyone has to get rid of Trump, who is troubling the whole world by threatening tariffs. Therefore, the European Union wants to stand on its own feet without American help and for this, the trade agreement it has signed with India has been called the Mother of All Trade Deal by both the European Union and India.
However, there is a question as to what this will change. Will this really benefit India? Will the European Union countries be able to free themselves from American pressure because of this deal? By taking such decisions, has Trump also joined the ranks of his old leaders like Richard Nixon and Franklin D Roosevelt, whose economic policies troubled not only America but also the world?
America has troubled the world before too
The way American President Trump is troubling many countries by imposing tariffs, Richard Nixon once troubled him in the same way. At that time the world economy was running under the Bretton Woods system, in which the US dollar was linked to gold. Gold could then be exchanged at a rate of $35 per ounce. The currencies of other countries were linked to the dollar. That is, if a country wants to buy goods from America, then instead of giving dollars, it could also give gold in exchange for the goods, but on August 15, 1971, US President Richard Nixon said that the US will no longer give gold in exchange for dollars.
The result was that the economy of the entire world changed and then the rate of other currencies of the world started being decided against the dollar, which was floating i.e. was going to change. Then Nixon did another thing similar to Trump. He imposed a surcharge of 10 percent on foreign goods. Like Trump, Franklin D Roosevelt was also known for changing economic policies and clashing with American institutions, especially the courts. This is the reason that in the World Economic Forum held in Davos, European Commission President Ursula von der Leyen, remembering the time of 1971, talked about freeing herself from American dominance.
Donald Trump clashing with Europe
However, Trump was many times ahead of both of them. For Make America Great Again, he not only troubled the whole world through tariffs, but also tampered with the doctrine of American President James Monroe and made it his own and gave it a new name, Donroe Doctrine. In this, he used his initial name and Monroe’s last name and said that now America will become the ruler of the Western Hemisphere. The idea of ​​occupying Greenland is to establish their dominance over this Western Hemisphere, for which they are clashing with the European Union. When Trump also reached the World Economic Forum held in Davos, he said that Europe is not going in the right direction.
European Union got India’s support
When Trump has caused so much destruction, it is obvious that the European Union had to find a way out. The European Union found that way in India, where a Free Trade Agreement (FTA) between the two is in its final stages. On behalf of India, Cabinet Minister Piyush Goyal has called it the Mother of All Trade, while European Commission President Ursula von der Leyen has also called it the Mother of All Trade. How strong and how effective this agreement is can be gauged from the fact that European Commission President Ursula von der Leyen and European Council President Antonio Costa are the chief guests of India’s Republic Day celebrations i.e. 26 January.
In such a situation, the question becomes that even if India and the European Union make a trade deal, what difference will it make to Trump? The answer lies in this deal. Listen carefully to what you will get from the deal.
- Through this agreement, about 25 percent of the world’s GDP will come together, which will do business together.
- Through this agreement, the market of about 2 billion people of the world will come together.
- India will get a new market for the exports which Trump has affected by imposing tariffs on India. Through this, Indian textile, leather, jewelery and handicraft goods will reach European countries absolutely duty-free, whereas at present a tax of 10 per cent is levied on it. If the trade deal is finalized, this tax will be removed.
- If the import duty on goods coming to India from Europe, such as European wine, spirits, dairy products, automobile sector like cars and expensive bikes is reduced, then their price will become cheaper in India.
- If there is a trade deal, it will become easier for Indian IT professionals and other skilled people to go to Europe, work there and earn money. Because after the trade deal the rules will no longer be so strict.
India-EU deal will benefit both countries
This deal will not be limited to just this matter, but when trade between India and the European Union increases and relations become smoother, then there will be a lot of help from defense deals to cyber security, maritime security and against terrorism. That means both the European Union and India will benefit, but what is Trump’s loss in this? It will also have to understand what America’s loss is, because even if India and the European Union make a deal and Trump doesn’t care, then what is the benefit of such a big deal. So Trump will be affected. How, let us understand this also.
Till now the currency of global trade is dollar. A country will be able to buy or sell anything only in dollars. More than 80 percent of all trade in the world is done in dollars, whereas out of the 27 countries of the European Union, 20 countries buy and sell their goods not in dollars but in Euros. If through this trade deal the European Union and India start purchasing with each other’s currencies, then the dependence on the dollar will reduce. If Europe sells goods, India will buy in rupees, if India sells goods, Europe will buy in euros and then the need for dollars for about a quarter of the world’s GDP will be very limited.
Euro and rupee will strengthen
In such a situation, Euro will also strengthen and so will Rupee. So the dominance of dollar will be less. The rest of India also wants to free itself from the dominance of its three dollars. That is why Vostro account has been started here. RBI has asked foreign banks to open special rupee vostro accounts in India. With this, India will do business in rupees only. That means, if India has to buy something from any country, then that country will sell goods to India in rupees only. Using this money, that country will buy whatever goods it needs from India. At present, more than 22 countries including Russia, Sri Lanka, UAE and Germany have agreed to do business in rupees with India.
In such a situation, if this trade deal starts with the European Union and India starts doing business in rupees through Vostro account, then Trump will face problems. He is dreaming of making America great again on the strength of the dominance of the dollar, but the steps taken by the European Union towards getting out of the American dominance and becoming self-reliant, may deal a big blow to Trump’s dreams, because he has lost a big market of the world due to his insistence on tariffs. Voting on America’s trade deal with the European Union was also stopped after Trump’s speech in Davos. In such a situation, this deal is also considered certain to go out of America’s hands.
