Friday, August 1, 2008

India, China, and Russia—Three Countries That Can Say No

The rise of India and China and the oil wealth of Russia have transformed the power structure of international relations. India refused to accept lower tariffs on several agricultural products, thereby scuppering the current Doha round of negotiations in pursuit of further liberalization of international trade. China reneged on its promise to allow unfettered press freedom for foreign media covering the Olympic games. Russia threatens to aim missiles westward, and perhaps curtail gas deliveries in winter, if the Czechs and Poles proceed with installation of a U.S. missile shield in Eastern Europe.

Sustained high growth and the accumulation of several trillion dollars of international currency reserves, largely held in dollars, have given the gang of three a much stronger bargaining position in international affairs. These trends are likely to continue for the foreseeable future, while the United States goes deeper in debt to foreigners.

No, bu, and nyet are words that American diplomats had better get used to hearing. The list of "no’s" is likely to grow in the future.


SlantRight 2.0 said...

It sounds like Russia, China and India are more than a gang of three. It sounds like they are step away from being the new Axis.

I wonder if the USA/India Nuclear tech agreement will receive will pull India away from a Russia and China orbit.

I also wonder if the agreement will even be ratified by all parties that are required for the deal to go forward.

Sridhar Gurivireddy said...

Massive lead in technology knowhow and military power will probably help US retain its bargaining for a while to come. But, gradually US will lose it's ability to impose/enforce international economic sanctions against its adversaries.

What's scary is that these foreign countries can use trade surplus dollars to invest/take over American companies. With close to $250 billion trade surplus, China could afford to take over 2-3 Fortune-500 companies a year. What if India/China take over American companies and move them piece by piece to their countries.