"For the European Commission president, Ursula von der Leyen, the EU's trade pact with India was the mother of all deals. Seen from the other end of the telescope, it looked like the mouse of all deals, with just 4bn (3.5bn) in tariff reductions a rounding error in a 180bn trading relationship. But that misses the point: this is about economic heavyweights resetting the terms of their cooperation because of Donald Trump's use of tariffs as a tool of economic and political compulsion."
"Last week marked a turning point. In upgrading ties with Vietnam in the wake of its India deal, Europe is no longer trying to lock Asian partners into fixed industrial roles. The EU wants Hanoi to move into hi-tech production. That shift will probably displace Vietnam's labour-intensive manufacturing elsewhere. India is an obvious beneficiary, able to absorb that demand. Delhi says it will give the EU unprecedented access in politically sensitive areas, most notably vehicle imports, while quotas and phase-ins protect India's domestic strategy."
The EU upgraded trade ties with India and Vietnam to reset cooperation amid tariff use by the US. The EU-India pact involves modest tariff reductions but aims to deepen technological and goods trade, with Europe allowing wide market access for Indian textiles and Indian commitments on vehicle imports protected by quotas and phase-ins. The EU seeks to move Vietnam into hi-tech production, likely shifting labour-intensive manufacturing to India. The deal enables Indian firms to adopt advanced European technologies while preserving both sides' geopolitical flexibility, including tolerance of Indian Russian oil purchases and no forced choice over China for Vietnam.
Read at www.theguardian.com
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