G20 should address looming trade and tariff war, AI challenges, says Amitabh Kant

New Delhi: It is “critical" for the G20 to address emerging challenges of trade and tariff wars, India’s sherpa Amitabh Kant said, amid increasing threats by US President Donald Trump to hike tariffs against India and other members of the grouping of major global economies.

In an interview, the former bureaucrat said G20 should also address the potential adverse effects of artificial intelligence by suggesting a regulatory framework.

Talking about his new book, How India scaled Mt G20, Kant said the influential grouping of 19 countries, the European Union and the African Union, representing 85% of global GDP, is the only effective forum to resolve critical international economic and developmental issues.

“The only forum which will give you results is G20 that includes emerging markets, the G7 nations, Russia and China. There is no other multilateral forum which will give you results on critical issues," Kant said.

With the grouping having succeeded in achieving consensus on key issues during India’s presidency, Kant said New Delhi will continue to work with other nations to tackle emerging challenges.

During its presidency between December 2022 and November 2023, India worked hard to build consensus on the Ukraine war, on onboarding the African Union as a permanent member of the G20 and adopting a green development pact among other issues.

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Major challenges

Kant said there are three challenges that the G20 has to address now.

“Firstly, there is big power conflict around both Russia and Ukraine and the Middle East. Security is not the mandate of G20. G20’s mandate is economics. But there's a challenge. Secondly, there is a breakdown of global supply chains," Kant said referring to the tariffs that the US and the EU are introducing on imports into their markets and issues around excess production capacity in China.

The EU had last October imposed tariffs of up to 45% on Chinese electric vehicles. Now Trump has threatened additional tariffs on imports from China, Mexico and Canada. On Monday, he also referred to India as a high tariff country.

Meanwhile, China’s surplus capacity is cooling Indian business appetite for adding further production capacity, Sanjiv Puri, president of the Confederation of Indian Industry (CII) and chairman and managing director of ITC Ltd, told Mint earlier in January.

Kant added, “The third (challenge) is that new technologies have come. AI, machine learning, quantum computing have the potential to transform lives, education, health and nutrition, but they also have the potential to trigger conflicts between nations. So you need not a national, but an international agreement on this issue.What should be the international regulation on this, on algorithms and assumptions--should be what G20 has to look at in the future. Security is not the issue. Security issue should be managed by United Nations. But on issues of free trade, growth, development of AI etc, G20 has to play a key role."

Kant’s suggestion that tariffs and trade wars should be addressed by G20 comes amid the threat of rising protectionism by the world's largest economy. Trump's ‘America First’ trade policy, released on 20 January, said the US will investigate its trade deficit and consider taking steps including, a global supplemental tariff. The US is also examining the feasibility of setting up an External Revenue Service (ERS) to collect tariffs.

Asked if India will push these matters up the G20 agenda, Kant said that India had worked with others during the Brazilian presidency of G20 and will continue to do so under the current South African presidency. “It is critical that this becomes a key issue during the South African presidency."

Kant said G20 decisions signify international commitments from which individual nations cannot back out.

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Behind the scenes

His book, How India Scaled Mt G20 is a behind-the-scenes look at India’s presidency, “highlighting how India worked tirelessly to promote inclusivity and dialogue", external affairs minister S Jaishankar wrote in his forward.

The book narrates how India clinched the G20 ‘New Delhi leaders’ declaration’-- the most hotly contested multilateral documents in India’s diplomatic history--through consensus building in spite of intensely competing geopolitical interests among members.

Kant says in the book that with Prime Minister Narendra Modi’s support and approval, he told other sherpas – top negotiators who usually report directly to the head of government – at the end of the negotiations: "Take it or leave it. There will be no more discussions, no more debates at the sherpa level. If anyone has an objection, please ask your leader to take it up to my leader. For now, this text is greened (approved)."

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The book explains not only the geopolitical but also the economic trends at play and gives an account of the Asian financial crisis of 1997 and global financial crisis of 2008.

For Kant, the learning from India’s G20 presidency is that one has to be thoroughly prepared and as a negotiator, one has to be always positive and optimistic. Also, one has to be bold and take risks if one is trying to achieve ambitious goals, he said.

“The Prime Minister wanted India's G20 to be decisive, ambitious, action-oriented and forward-looking. If you want to be that, you have to be bold and take risks. There is no substitute. Also, these are very tough and hard negotiations.

In one instance, one para on Russia and Ukraine took us 300 hours and 250 bilateral meetings. Sixteen drafts failed and the seventeenth succeeded. You have to be very calm under pressure. If you are not calm under pressure, you will break down. And the last point--whatever you do, when you are negotiating -- you must take out time for some exercise, yoga or meditation which will keep you mentally and physically fit," said Kant.

Under India’s presidency, G20 had identified 112 outcomes as matters of priority.

“There are some outcomes which are domestic which different ministries have pursued and have achieved them. Some are global in nature, which are being implemented by institutions like the World Bank, IMF (International Monetary Fund), WHO (World Health Organization) and ILO (International Labour Organization). Once the decisions are taken by G20, they have to be achieved domestically by the countries and externally by these international bodies, which are the implementing arms," said Kant.

"Many of those decisions are being implemented by them. They are all at advanced stages of implementation. These become international commitments. Nobody can back out from them. They become your international commitment to the global community," he added.

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