1991 Convention on the Marking of Plastic Explosives for the Purpose of Detection (Plastic Explosives Convention) 29Designed to control and limit the use of unmarked and undetectable plastic explosives (negotiated in the aftermath of the 1988 Pan Am flight 103 bombing).
Parties are obligated in their respective territories to ensure effective control over ‘unmarked’ plastic explosive, i.e., those that do not contain one of the detection agents described in the Technical Annex to the treaty.
Generally speaking, each party must, inter alia, take necessary and effective measures to prohibit and prevent the manufacture of unmarked plastic explosives; prevent the movement of unmarked plastic explosives into or out of its territory; exercise strict and effective control over possession and transfer of unmarked explosives made or imported prior to the entry into force of the Convention; ensure that all stocks of unmarked explosives not held by the military or police are destroyed, consumed, marked, or rendered permanently ineffective within three years; take necessary measures to ensure that unmarked plastic explosives held by the military or police are destroyed, consumed, marked, or rendered permanently ineffective within fifteen years; and, ensure the destruction, as soon as possible, of any unmarked explosives manufactured after the date of entry into force of the Convention for that state.
1997 International Convention for the Suppression of Terrorist Bombings (Terrorist Bombing Convention 30) Creates a regime of universal jurisdiction over the unlawful and intentional use of explosives and other lethal devices in, into, or against various defined public places with intent to kill or cause serious bodily injury, or with intent to cause extensive destruction of the public place.
1999 International Convention for the Suppression of the Financing of Terrorism (Terrorist Financing Convention) 31Requires parties to take steps to prevent and counteract the financing of terrorists, whether direct or indirect, through groups claiming to have charitable, social, or cultural goals or which also engage in illicit activities such as drug trafficking or gunrunning.
Commits states to hold those who finance terrorism criminally, civilly, or administratively liable for such acts.
Provides for the identification, freezing, and seizure of funds allocated for terrorist activities, as well as for the sharing of the forfeited funds with other states on a case-by-case basis. Bank secrecy is no longer adequate justification for refusing to cooperate.
2005 International Convention for the Suppression of Acts of Nuclear Terrorism (Nuclear Terrorism Convention) 32Covers a broad range of acts and possible targets, including nuclear power plants and nuclear reactors.
Covers threats and attempts to commit such crimes or to participate in them, as an accomplice.
Stipulates that offenders shall be either extradited or prosecuted.
Encourages states to cooperate in preventing terrorist attacks by sharing information and assisting each other in connection with criminal investigations and extradition proceedings.
Deals with both crisis situations (assisting states to solve the situation) and post-crisis situations (rendering nuclear material safe through the International Atomic Energy Agency (IAEA).
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Annexure II
Security Council Counterterrorism Resolutions, Committees and Subsidiary Bodies
The presidential statement adopted by the first-ever Security Council Summit held in January 1992 against the backdrop of the end of the Cold War had expressed its deep concern over acts of international terrorism. Since then, acting under Chapter VII in confronting the scourge of terrorism, the Security Council had adopted various resolutions and imposed sanctions regimes that had made mandatory the thrust of non-binding provisions of various terrorism-related conventions. In pursuance of Article 30 of the UN Charter, the Security Council has set up various subsidiary bodies to carry out its work.
The Security Council imposed sanctions against states considered having links to certain acts of terrorism, including Libya (1992), Sudan (1996) and Afghanistan (1999, expanded to include Al-Qaida in 2000 by Resolution 1333).
The Security Council set up the 1267 Committee in 1999 by its Resolution 1267 and tasked it with monitoring the sanctions against the Taliban (and subsequently al-Qaida as of 2000). 33 An analytical support and sanctions monitoring team comprising experts in counterterrorism and related legal issues, arms embargoes, travel bans, and terrorist financing was appointed to assist the committee. 34 Through its Resolution 1269 (1999), the Council urged countries to work together to prevent and suppress all terrorist acts. 35
The mandate of the 1267 Committee stems from Security Council Resolution 1267 (of 1999). The mandate of the 1267 Committee was subsequently updated including through Security Council Resolution 1904 (2009), which inter alia established the Office of Ombudsperson to handle the delisting requests from the Consolidated List. The core responsibility of the 1267 Committee is to work with member states to implement sanctions against al-Qaida and the Taliban, and their associated groups such as Jaish-e-Mohammed, Jamaat-ud-Dawa, and Lashkar-e-Taiba. 36
In the aftermath of 11 September 2001, the Security Council established the Counter-Terrorism Committee (CTC), under Resolution 1373 (2001). The sweeping provisions of this resolution requests all states to: criminalize the financing of terrorists; freeze without delay any funds related to persons involved in acts of terrorism; deny all forms of financial support for terrorist groups; suppress the provision of safe haven, sustenance, or support for terrorists; share information with other governments on any groups practicing or planning terrorist acts; cooperate with other governments in the investigation, detection, arrest, extradition, and prosecution of those involved in such acts; and criminalize active and passive assistance for terrorism in domestic law and bring violators to justice and implement effective border control measures. The resolution also calls on states to become parties, as soon as possible, to the relevant international counterterrorism instruments. 37
The CTC was established with the ultimate aim to increase the ability of states to fight terrorism. Unlike the 1267 Committee, it is not a sanctions body, nor does it maintain a list of terrorist organizations or individuals. To assist the CTC’s work, the Security Council through its Resolution 1535, set up a Counter-Terrorism Committee Executive Directorate (CTED) to monitor the implementation of Resolution 1373 and to facilitate the provision of technical assistance to member states. 38
Through Resolution 1540 (2004), which calls on states to prevent non-state actors (including terrorist groups) from accessing weapons of mass destruction, the Security Council established the 1540 Committee. 39
The Security Council in subsequent resolutions urged member states to take action against groups and organizations engaged in terrorist activities that were not subject to the 1267 Committee’s review. Resolution 1566 (2004) established the 1566 Working Group made up of all Security Council members to recommend practical measures against such individuals and groups, as well as to explore the possibility of setting up a compensation fund for victims of terrorism. 40
On the margins of the 2005 World Summit, the Security Council held a high-level meeting and adopted Resolution 1624 (2005) condemning all acts of terrorism irrespective of their motivation, as well as the incitement to such acts. 41 It also called on member states to prohibit by law terrorist acts and incitement to commit them and to deny safe haven to anyone guilty of such conduct.
Through a number of additional resolutions, the Security Council has in the past few years strengthened the work of its counterterrorism bodies. In its Resolution 2133 (2014), it called on states not to pay ransom to terrorist kidnappers. 42 Recently, through Resolution 2178 (2014), it called on member states to prevent suspected foreign terrorist fighters from travelling to member states, and create legislation to prosecute them. 43 The resolution defines foreign terrorist fighters as ‘individuals who travel to a state other than their states of residence or nationality for the purpose of the perpetration, planning, or prepar
ation of, or participation in, terrorist acts or the providing or receiving of terrorist training, including in connection with armed conflict. 44
Annexure III
CTITF Entities
Counter-terrorism Committee Executive Directorate (CTED)
Department of Peacekeeping Operations (DPKO)
Department of Political Affairs (DPA)
Department of Public Information (DPI)
Department of Safety and Security (DSS)
Expert Staff of 1540 Committee
International Atomic Energy Agency (IAEA)
International Civil Aviation Organization (ICAO)
International Maritime Organization (IMO)
International Monetary Fund (IMF)
International Criminal Police Organization (INTERPOL)
Monitoring Team of 1267 Committee
Office for Disarmament Affairs (ODA)
Office of the High Commissioner for Human Rights (OHCHR)
Office of Legal Affairs (OLA)
Office of the Secretary-General (OSG)
Organization for the Prohibition of Chemical Weapons (OPCW)
Special Rapporteur on the promotion and protection of human rights while countering terrorism
United Nations Development Programme (UNDP)
United Nations Educational, Scientific and Cultural Organization (UNESCO)
United Nations Interregional Crime and Justice Research Institute (UNICRI)
United Nations Office on Drugs and Crime (UNODC)
World Customs Organization (WCO)
World Bank
World Health Organization (WHO)
Observers
International Organization for Migration (IOM)
Office of the Coordinator for Humanitarian Affairs (OCHA)
United Nations Department for Economic and Social Affairs (DESA)
United Nations Office of the Special Adviser on Africa (UNOSAA)
United Nations High Commissioner for Refugees (UNHCR)
CHAPTER 7
The Politics of Trade Policy
‘Anyone who reads GATT is likely to have his sanity impaired.’
—Senator Milliken, 1951
Thus spoke Senator Milliken back in 1951, at the hearings held by the Senate Finance Committee. John H. Jackson quoted Senator Milliken to introduce his seminal publication World Trade and The Law of GATT, the pre-eminent study on General Agreement on Tariffs and Trade (GATT). 1
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One might be tempted to ask, what is a chapter on international trade doing in a book titled Delusional Politics?
Decisions in the area of trade policy, as in the case of foreign and security policies, have to be made by individuals who ever so often show signs of delusional thinking and decision-making.
The following quotes from the forty-fifth President of the United States of America, Donald J. Trump, will provide guidance:
Our politicians have aggressively pursued a policy of globalization—moving our jobs, our wealth and our factories to Mexico and overseas. 2
We will follow two simple rules: buy American and hire American. 3
Who would have thought that the President of the United States—the nation of freedom and capitalism; the flag-bearer of an open, liberal, world order—would so viciously attack the very ethos international trade was instrumental in establishing, and whose fundamentals are so closely aligned with its own.
More importantly, the quoted statement of the President overlooks the fact that the US owes its pre-eminent position in the world to the open, liberal world order.
The following quotes from Xi Jinping, the Chinese premier, are further proof of delusional thinking in the international trade discourse:
It is true that economic globalization has created new problems. But this is no justification to write off economic globalization altogether. Rather we should adapt to and guide globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.
Again, who would have thought that Communist China—with a GDP of over USD 11 trillion but one that has sought, albeit successfully, to manipulate the multilateral trading system—would by 2017 come to be the flag-bearer of global economic integration, as founded and exported under Western values?
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‘Thus, principal objectives of the WTO [World Trade Organization], as of the GATT, are raising standards of living, ensuring full employment, expanding production and trade, and allowing optimal use of the world’s resources.’ 4
The establishment of the WTO on 1 January 1995 ushered in an age of unprecedented global economic prosperity. Opening of borders to goods and services from countries near and far, coupled with the adoption of the aforementioned Washington Consensus across geographies, became the template for growth and development.
The rationale behind trade liberalization and the Washington Consensus was predicated on the so-called comparative advantage theory—if China had the labour and United States the capital, it made sense for American firms to set up their factories in the People’s Republic. China would profit by way of increased investment in its economy, employment for its workers and a trade surplus for the goods it would export back to the US. American firms, by employing cheap labour, could produce goods competitively and sell them for higher margins in their own country—a win-win solution.
Let’s discuss the three reasons why this rationale is today facing a backlash. First, the rules of trade and liberalization disproportionately favoured the developed world, for these were conceptualized, designed and implemented by them. Moreover, developing nations started off at a disadvantage as their need for international finance, technology and markets was far stronger than the needs of developed countries, which were initially focused on resource extraction.
Second, trade liberalization, while bringing enormous economic prosperity in absolute terms, was unable to address rising inequality, both within and outside countries. Trickle-down economics largely failed, with rich countries getting richer, often at the expense of developing countries. Moreover, the top 1 per cent within both developed and developing countries benefitted exponentially, more than those in the bottom 99. 5
Third, China’s entry into the WTO and its rapid growth as a major exporter of manufactured goods left most other trading nations unprepared for the consequences of this rise.
These fault lines of the international liberal order were brought to the fore when the world underwent a global financial and economic crises (from December 2007 to June 2009). The US subprime crises and its impact on countries across geographies eroded any faith governments and their peoples had in the global economic integration. International trade in that sense was mere collateral damage.
In the context of India, trade liberalization in the past has happened out of compulsion and not necessarily out of conviction or on the basis of national consensus.
Now there appears to be the emergence of a consensus within the country on the need for reform and liberalization in order for the cake to be much bigger so that there is enough for everyone.
This consensus, however, is fragile and is subject to the vicissitudes of democracy, i.e. elections, management of vested interests and of a few clear redlines. It is contingent on the benefits trickling down to a larger number of people. The redlines referred to above are: rural, especially, farmer distress, massive job losses or reforms that further marginalize the 300 million or so people who live in extreme poverty.
Therefore, the challenge for any democratically elected government in India is to see how one can carry out incremental reforms without any of the redlines being crossed.
It is the author’s submission that while no redline has been deliberately crossed so far by governments in the past, the ‘policy space’ which has been won has not been adequately leveraged. A good example is the Agreement on Textiles and Clothing of the Uruguay Round where India, almost single-handedly got rid of the quotas. But while we have taken some advantage of the eliminati
on of quotas, the present situation is characterized by us having to play ‘catch-up’ not just with China, but also with the likes of Bangladesh, Sri Lanka and Vietnam. So, where did we go wrong?
An excerpt from my paper for Carnegie India, India’s Trade Policy Dilemma and the Role of Domestic Reform, published in February 2017, summarizes India’s inability to capitalize.
Over the years, India has paid insufficient attention to the value of trade policy. In 1996, for example, it was clear that the end of quotas under the Multi-Fiber Arrangement in 2005, would benefit the more competitive exporting developing countries and that modernization of India’s domestic industry was critical. Many policy actions the BJP government undertook in 2016, such as the enhanced duty drawback scheme, had been suggested in 1996. Policy paralysis, lack of will, and perhaps even lack of full understanding prevented the required steps from being taken in 1996. Had timely action been taken, India’s share of global trade in textiles and clothing would have been much larger . . . Instead, Bangladesh, China, and Vietnam were the big beneficiaries of the expiring of the erstwhile regime. Between 2000 and 2014, China’s share of global exports rose from 10 per cent to 36 per cent in textiles and from 18 per cent to 39 per cent in garments. 6
First, we need a set of good qualified professionals at the helm of the trade policy decision-making ecosystem—it’s too important a matter to be left to generalists. Second, it is important to realize that trade liberalization per se will not bring benefits unless the domestic ecosystem, such as trade-related infrastructure, trade facilitation and domestic tax and investment regime, is reformed. Third, our private sector must learn and accept the need to compete. While the issue of dumping by Chinese companies may be a case apart, the same cannot be said about our inability to compete against ASEAN countries or other SAARC countries such as Sri Lanka and Bangladesh. Fourth, India has to become a bigger part of the global value chain. Not only are we a small part of it at present, there is a danger that the global value chain itself may undergo dramatic transformation (Belt Road Initiative, among other things), and we may find ourselves on the fringes once again. Last but not least, the cataclysmic technological changes that are underway, whether it is artificial intelligence, robotics or just the sheer digitalization of the global economy, will have profound transformative effect.
Delusional Politics Page 17