US Secretary of State Mike Pompeo will start a three-nation tour from June 24 through New Delhi, Osaka and Seoul, “to advance the shared goal of a free and open Indo-Pacific” which is but a euphemism for containing expansionist China.
It may not be smooth sailing for Pompeo in New Delhi because there are grave trade issues between India and the US. American sanctions against Iran, Venezuela, and Cuba have affected India’s import of oil. Sanctions against Russia have affected weapons imports from that country.
Pompeo will be in New Delhi with a long wish list, and also offers which he hopes, will wean India away from dalliance with the Beijing and Moscow.
Indian Prime Minister Narendra Modi’s stance at the Summit of the Shanghai Cooperation Organization (SCO) in Bikshek on June 14, should worry the US as it indicated that India might lean towards China and Russia in an effort to be independent of the US.
The US policy of pressing India to fall in line with its foreign policy and its economic interests, and punishing India if it fell out of line have not gone down too well in New Delhi. India is now a different kettle of fish with Modi back in power in greater strength than before after the parliamentary elections.
Thus, Pompeo might well find Modi’s charming exterior hiding a hard interior.
On June 5, the Trump Administration terminated India’s eligibility for a special trade status that allowed US$ 6 billion worth of Indian goods into the US duty-free. It is reported that more trade sanctions may follow as President Donald Trump pushes India to open up its medical devices, dairy products and retail markets to US companies. High Indian import duties irk US exporters. Tighter e-commerce rules, which were introduced earlier in 2019, have hurt Amazon and Walmart.
But Indians also have tales of woe to tell. The sanctions imposed by the US on Iran, Venezuela, Cuba and Russia are hurting Indian oil and arms imports. To India the US appears to be brazenly indulging in a modern version of gunboat diplomacy.
On June 16, India imposed retaliatory tariffs on 29 goods imported from the US. The 29 US goods include walnuts, apples, and some pulses. India and the US had been locking horns over the US decision to raise tariffs on Indian aluminum and steel products. The new Indian tariffs will impose a burden of US$ 220 million to US$ 290 million on the US.
However, to smoothen matters, Secretary of State Pompeo is expected to sugarcoat his demands. An indication of this was there in his speech at the US-India Business Council Ideas Summit on June 12.
Hoping to swing major concessions from Prime Minister Modi, Pompeo made extremely flattering remarks about him. “Many observers were surprised by the result, but, frankly, I wasn’t. I’ve been watching closely. My team at the State Department was watching closely. And we knew – we knew that the Prime Minister was a new kind of leader for the world’s most populous democracy.”
“He is the son of a tea seller who worked his way up to governing a state for 13 years and now leads one of the world’s truly emerging powers. He’s made economic development for the poorest Indians a priority. And, indeed, millions who once went without light bulbs now have electricity. And millions who lacked cooking stoves now have them,” Pompeo said.
“We are eager to help India establish secure communications networks – including 5G networks,” he added, in a bid to keep the Chinese company Huawei away from the Indian market.
Pompeo also praised the new Indian Foreign Minister, S.Jaishankar, who is believed to be friendly to the US. “He’s ready to cultivate a warmer relationship with America – and he knows that the feeling is mutual,” Pompeo said.
But for all the praise Pompeo heaped on the Indian leader and the Foreign Minister, there was no offer to help India build up its manufacturing sector which is lagging behind China.
Veteran Indian diplomat M.K.Bhadrakumar has pointed out that all that Pompeo might offer is shale gas at market prices and state-of-the-art fighter aircraft. To fund purchases, the US will help India raise private capital “for years to come.”
Pompeo would want India to complete the Westinghouse civil nuclear project. In March, the US had agreed to build six nuclear power plants in India. But Westinghouse is in a bad way. And there is this controversial 2010 Indian law which says that in case of an accident in a nuclear plant, the provider of the technology, and not the operator, will bear the cost.
In an article written for the Observer Research Foundation in April 2019, Dr.Manoj Joshi says that the report that the US will help build six nuclear power plants in India should be taken with a pinch of salt.
“When it comes to the US, inter-governmental declarations are not how business gets done. It requires working through a labyrinth of terms and conditions with companies and financial institutions. And, the nuclear-reactor business is not too healthy in the US,” Joshi writes.
He also points out that Westinghouse has just emerged from a Chapter 11 bankruptcy settlement on account of the construction of four AP1000 reactors in Georgia and South Carolina.
According to Joshi, the announcement of building six reactors in India came during Foreign Secretary Vijay Gokhale’s visit to the US and it seemed to have been aimed at pleasing Washington at a time when bilateral trade ties appeared to have hit turbulence. It was also a token genuflection towards the Indo-US nuclear deal of 2008, he remarks.
“This deal, with its commitment to promote US nuclear reactor sales to India, came unstuck after India passed a stringent liability law (in 2010) that made the manufacturers, rather than the operator, primarily liable for damage in the event of an accident,” Joshi points out.
Cancelled Lankan Visit
The US has suffered a setback by cancelling Pompeo’s visit to Sri Lanka. The primary aim of Pompeo’s visit, slated for June 27, was to thrash out an agreement over some sensitive clauses in the controversial US-proposed Status of Forces Agreement (SOFA).
But SOFA is a too hot a potato for Sri Lankan politicians to hold in an election year because it is widely seen as a grave infringement of Sri Lanka’s sovereignty. Both President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe are opposed to SOFA on the same grounds.
Sirisena had told Foreign Minister Tilak Marapona to make it clear to the US officials in Washington that SOFA is not acceptable, though US officials insisted that the issues were technical in nature and could be settled through further talks.
According to the Janatha Vimukthi Peramuna (JVP), SOFA would grant US military personnel, US military contractors and US military suppliers, the same perks and privileges granted to technical and administrative officers of the US Embassy.
The draft agreement also allows the above-mentioned personnel to enter the country with only a US Government Issued ID card (without a passport).
JVP MP Bimal Ratnayake, said that SOFA would “take away Sri Lanka’s right to inspect any US vessels (aircraft or naval vessels) that enter Sri Lanka, adding that Sri Lanka will not be able to prosecute any of the personnel under Sri Lankan law for any offence, and that Sri Lanka would not have authority to inspect whatever they bring in or take out of the country.”
Recently, Defense Secretary, Gen.(Rtd) Shantha Kottegoda, told the Pathikada program on Sirasa TV, that SOFA should not be signed. He also said that no foreign troops are needed to protect Sri Lanka referring to provisions in SOFA in regard to the deployment of US defense personnel in the island.