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India unlikely to accede to US trade policy: China Daily contributor

CHINA (CHINA DAILY/ASIA NEWS NETWORK) - The Office of the US Trade Representative is reviewing India's status as a beneficiary of the Generalised System of Preferences (GSP), a US trade programme aimed at promoting the economic growth of developing countries by providing duty-free entry for up to 4,800 products from 129 designated countries and regions, and considering cancelling the zero-tariff arrangement for US$5.6 billion (S$7.59 billion) of Indian imports, according to Reuters.

Among the developing countries, India has benefited the most from the US programme, with about 3,500 Indian products getting zero-or low-tariff entry into the US market.

If the United States does cancel the zero-tariff arrangement, India will suffer the most severe punishment imposed by the US administration.

Given the US' trade policies over the past two years, the trade differences between Washington and New Delhi will further widen.

Although both countries are yet to officially respond to the Reuters report, it is obvious that their trade relations are strained despite their seeming political closeness.

Washington and New Delhi have continuously strengthened strategic cooperation, with special focus on security and defence cooperation.

The US administration expects to get India's support on multiple issues including maritime security, the Afghanistan issue and relations with China.

Washington is striving to strengthen US-India relations with an eye on the next century and has provided New Delhi with special privileges on multiple issues, including security collaboration, the Nuclear Suppliers Group and Iran.

Aimed at building an alliance among the US, Japan, India and Australia, the so-called Quad, and promoting a free and open "Indo-Pacific" order, Washington's Indo-Pacific strategy spans the geographies of India and the Pacific, rather than the Indian and Pacific oceans.

New Delhi, on its part, intends to champion its own interest and increase its presence in the Indo-Pacific and develop from a South Asian power to an Indo-Pacific, even global, heavyweight, by deepening its strategic cooperation with Washington.

But the US trade policy has not only increased trade frictions between the US and India and widened their differences, but also harmed the global trading system and the trade interests of a number of countries, including India.

In fact, the US administration has criticised India's high tariffs, even labeled India as the "tariff king".

While the two countries are also locked in a dispute in the World Trade Organisation, India's GSP status has become a key issue in Washington's trade negotiations with New Delhi.

A number of factors are responsible for the "hot political and cold economic" relations between the US and India.

The US administration, which is obsessed with its "America First" policy, wants to shirk its responsibilities in terms of regional and global security, yet it seeks maximum profits in trade.

No wonder it has expanded security cooperation with India. But if India insists on strategic independence and refrains from toeing the US line, the bilateral trade differences could intensify.

Just as Srinath Raghavan, a scholar with Carnegie India, said, throughout the past decades the US has rarely viewed its disagreements with India on trade, investment and other economic issues as acute, nor has it sought reciprocal treatment from India because it is more concerned about wider geopolitical interests.

But, the US administration, which lacks a long-term strategic view, may not tolerate India acting contrary to the US' economic policy.

Yet, unlike Japan, India will not become a US ally, as strategic independence remains its diplomatic cornerstone.

More important, upholding the multilateral trade system and providing necessary policy support for domestic enterprises conform to India's interests.

Also, any compromise in trade policy risks shrinking Indian Prime Minister Narendra Modi's vote bank just before the 2019 general election.

Moreover, India's e-commerce regulations introduced in late 2018, which put checks on the operations of Amazon and Walmart in India, supposedly prompted the US to review India's GSP status.

However, India is unlikely to make concessions before the general election as it would spark discontent among small retailers and mom-and-dad store owners, who have borne the brunt of the expanding operations of e-commerce giants.

Therefore, the "hot political and cold economic" relations between the US and India is likely to continue.

As for China, it should not be worried about the political closeness between the US and India, nor should it feel happy about the strained trade relations between India and the US.

Instead, it should remain strategically focused, avoiding conflicts with the US while gradually strengthening its trade partnership with India.

The writer is the deputy director of Institute of South Asian Studies of China Institutes of Contemporary International Relations. China Daily is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media organisations.

Extortion strategies resist disciplining when higher competitiveness is rewarded with extra gain

Cooperation, conflict, payoffs in treatments T0, T1, T2

The proportion of cooperation, i.e. to play C over the 49 rounds, differed among treatments (GLM: F2,48 = 4.9, p = 0.012; mean ± s.e.m. per player: T0: 0.548 ± 0.21; T1 = 0.35 ± 0.18; T2 = 0.35 ± 0.17) with significantly highest proportions in treatment T0 (post hoc test: T0−T1: p = 0.02; T0−T2: p = 0.026) and no difference between T1 and T2 (post hoc test: p = 0.99). Players with no incentive assigned (T0) were most cooperative. The payoff also differed significantly among treatments (GLM: F2,48 = 5.78, p = 0.006; mean ± s.e.m. per player and round: T0: €0.231 ± 0.04; T1: 0.189 ± 0.043, T2: 0.19 ± 0.034) with significantly higher payoffs in treatment T0 were players were assigned no incentive (post hoc test: T0−T1: p = 0.007; T0−T2: p = 0.011, T2−T1: p = 0.99). The occurrence of conflict, depicted by the proportion of DD decisions (i.e. both players decided D), differed among treatments (GLM: F2,48 = 6.96, p = 0.0022; mean ± s.e.m. per round: T0: 0.24 ± 0.15; T1: 0.46 ± 0.24, T2: 0.45 ± 0.18) where T1 and T2 had higher proportions of DD compared to T0 (post hoc test: T0−T1: p = 0.004; T0−T2: p = 0.006, T2−T1: p = 0.99). Players with no incentive (T0) had the lowest rate of conflict. Thus, both the cooperation rate and the payoff were higher in T0 than in either T1 or T2 and the existence of an incentive, asymmetric or symmetric, to gain €10 extra when gaining 10% more than the partner over the 49 rounds decreased cooperation and income, and enhanced conflict.

Ten of 18 players (60%) in T1 assigned with the incentive of gaining €10 extra managed to earn 10% more than their co-players, whereas two players (10%) without that incentive earned 10% more than their co-players but did not receive €10 extra. Thus, among the 12 players who managed to earn 10% more than their co-player, more players had been assigned with the incentive (binomial test, two-tailed, p = 0.039). The incentive motivated competitive behaviour. Those assigned with the incentive made over all rounds of the game a higher proportion of D decisions (0.693 ± 0.043 per round) than their partners not assigned the incentive (0.619 ± 0.05 per round; Wilcoxon signed-rank matched pairs test, two-tailed: z = −2.384, N = 18, p = 0.0171).

Test of ‘generous ZD' strategy

For deciding whether the generous strategy had been used in T0, we tested for linear relationships between the payoffs of either player across many rounds of play and the cooperation rate of the potential generous player X; payoff ~ α ×  cooperation rate of partner + β, where α is the slope and β the intercept. For the ‘generous’ strategy to occur, the payoffs of both player X and partner Y must increase with X’s cooperation. Furthermore, the payoff of the potential generous player X must increase more with her increasing cooperation compared to the increase of her partner Y’s payoff. The payoffs of both players of a pair should not differ when cooperation is close to mutual cooperation (intercept should be higher for partner Y than for generous player X).

Nine players fulfilled our criteria for ‘generous' (see Methods). We found significant positive linear relationships between cooperation rate of the potential generous player X and payoff per round of either player (LME: payoff~cooperation rate; F1,86 = 87.466; p = 9.33 × 10–15; Fig. 2a, see also Supplementary Table 1) with a significantly lower increase for the partner of the potential generous player (LME: payoff~cooperation rate × player; F1,86 = 6.418; p = 0.013). Furthermore, the intercept was significantly lower for the potential generous player (LME: payoff~player; F1,86 = 15.624; p = 0.00016) as predicted for the generous strategy. Thus the generous players let their co-players succeed until they reached mutual cooperation and similar payoffs. The rest of the players in T0 do not seem to contain extortionate players (Supplementary Figure 1a, Supplementary Table 4).

Fig. 2

Payoffs of each player dependent on cooperation of inferior player. Correlation between cooperation rate of the inferior player and payoff per round for the inferior player and the other player in the treatments a without incentive (T0), the potentially generous player (orange) being inferior; b with asymmetric incentive (T1), the partner (blue) being inferior; and cwith symmetric incentive (T2), the partner (blue) being inferior. Players have been selected as described in the Methods. Individual points represent average payoff and the average cooperation of 10 rounds per individual. Slope and intercept estimates (± s.e.m.) are derived from linear mixed effect models (see main text). a Inferior player potentially generous: R2 = 0.56; partner R2 = 0.42. b Inferior player partner of potentially extortionate: R2 = 0.85; partner R2 = 0.37. c Inferior player partner of potentially extortionate: R2 = 0.90; partner R2 = 0.21. For all other players, see Supplementary Figure 1

Test of ‘extortion ZD' strategy

For a proof of extortion in treatments T1 and T2, we need to show that with increasing cooperation of the partner Y the partner’s own payoff increases and simultaneously that the payoff of the potential extortionate player X increases more. In that case, the partner Y can increase his payoff only by being more cooperative, thereby providing the extortionate player X with an increasingly higher payoff. At the same time, the payoffs should not be different when cooperation rates are close to zero (for criteria for ‘extortionate player' see Methods).

For the treatment where one player per pair had an asymmetric incentive to earn the extra bonus (T1), we found significant positive linear relationships between cooperation rate of the partner and payoffs per round (LME: payoff~cooperation rate; F1,176 = 120.42; p < 2.2 × 10–16; Fig. 2b, see also Supplementary Table 2) with a significantly greater increase for the potential extortionate player (LME: payoff~cooperation rate × player; F1,176 = 16.57; p = 0.00011). Furthermore, there was no significant difference for the intercepts (LME: payoff~player; F1,176 = 0.32; p = 0.57). Thus, the player X who was assigned the incentive of gaining the extra bonus and gained it, used probably the extortion strategy enforcing cooperation of her partner Y who could increase his own gain only by increasing his cooperation supplying the extortioner with an increasingly higher gain. The rest of the players in T1 deviate from expectation for extortionate behaviour (Supplementary Figure 1b, Supplementary Table 5).

For the treatment where both players had an incentive to earn the extra bonus but only the player who would be 10% more competitive than the partner would receive it (T2), we found significant positive linear relationships between cooperation rate of the partner Y and payoffs per round (LME: payoff~cooperation rate; F1,106 = 102.8; p < 2.2 × 10–16; Fig. 2c, see also Supplementary Table 3) with a significantly greater increase for the potential extortioners X (LME: payoff~cooperation rate × player; F1,106 = 14.12; p = 0.00028). Furthermore, there was no significant difference for the intercepts (LME: payoff~player; F1,176 = 0.26; p = 0.62). Thus, the player X who gained the extra bonus probably used the extortion strategy enforcing cooperation of her partner Y who could increase his own gain only by increasing his cooperation supplying the extortioner X with an increasingly higher gain. There was no significant difference in the pay-off increase with increasing cooperation rate for the rest of the players in T2; they thus deviate from expectation for extortionate behaviour (Supplementary Figure 1c, Supplementary Table 6).

Comparison of payoffs of the potential ZD strategies

We further compared the payoffs of the potential ZD strategy X against that of the partner Y (Fig. 3) to test for generous and extortionate strategy in the different treatments. For a proof of a generous ZD strategy the regression of the co-player’s payoff on the generous player’s payoff must yield a slope above the diagonal16, thus generous players let their co-players succeed until both reach mutual cooperation. In T0 the symbols are above the diagonal (Fig. 3a), i.e. potential generous players let their partners succeed and the intercept of the regression line is far above zero (GLM with family Gamma: slope: t = −2.629, df = 7, p = 0.034; intercept: t = 9.806, df = 8, p = 2.43 × 10–5), which is required for a generous ZD strategy. For a proof of the extortionate strategy, the regression of the co-player’s payoff on an extortioner’s payoff must yield a slope below the diagonal16, thus extortioners outcompete their co-players. In T1 (Fig. 3b) and T2 (Fig. 3c) the symbols are below the diagonal, i.e. potential extortionate players outcompeted their partners and the intercept of the regression line is close to zero, which is in approximate agreement with requirements for an extortionate ZD strategy (T1: GLM with family Gamma: slope: t = 1.98, df = 6, p = 0.0948; intercept: t = 0.982, df = 7, p = 0.3640, Fig. 2b; T2: slope: t = −3.02, df = 8, p = 0.0166; intercept: t = 5.7, df = 9, p = 0.0005, Fig. 3c). As the intercept in T2 is only close to zero, we cannot prove strict extortion formally here.

Fig. 3

Formal test of ‘generous’ and ‘extortion’. Correlation between payoff of ZD player and the payoff of the partner in the treatments, a without incentive (T0), b with asymmetric incentive (T1), and c with symmetric incentive (T2); players have been selected as in Fig. 2; for statistics see main text

Extortioners refuse to be disciplined

Extortion-like players in T1 and T2 earned, without the bonus added, significantly less than generous-like players in T0 during the PD game (Fig. 4a), even though they had outcompeted their co-players. Only when the extra bonus of €10 is added to their gain, it is obvious that being extortionate paid off (Fig. 4b). Even though the co-players of extortioners could have gained more by being fully cooperative, they opposed to being exploited responding often with D thus paying for their ‘costly punishment’ (cf. 16). Extortioners refused, however, to become disciplined. Their proportion of C after partner’s C would increase during the game in that case. They did, however, not increase to respond with C after their partners’ C from the first 30 to the last 19 rounds of the PD game, instead in all but one group extortioners decreased cooperation (e.g., in T1: p < 0.005, Fisher’s Exact Test, Fig. 5b first two columns). In T2 they did not increase C after their partners’ C from the first 30 to the last 19 rounds of the PD game either, but they did not decrease it (Fig. 5c) as in T1. Extortioners thus refused to become disciplined; they did not increase their cooperation in the last 19 rounds of the game.

Fig. 4

Payoff per player without and with bonus. Payoff (€) per player over 49 rounds in the treatment without incentive (T0), with asymmetric incentive (T1) and with symmetric incentive (T2). Players have been selected as in Fig. 2. Panel a shows payoffs without the additional bonus of 10€ added; p after two-tailed Mann–Whitney U test comparing the payoff of the partners of the potential generous ZD players in T0 with the payoff of the potential extortionate ZD players, pooled from the two treatments with incentive to earn the additional bonus T1 and T2; N1 = 9 (T0), N2 = 19 (T1, T2), Z = −2.902, p = 0.0037). Panel b shows payoffs with the additional bonus of 10€ added; Z = −4.208, p = 0.0001

Fig. 5

Change of cooperation during the game. Average proportion (+s.e.m.) of C (=cooperation) decisions after either co-player’s C or D (=defect) during the first 30 and the last 19 rounds of the PD game. a T0—iterated Prisoner’s Dilemma; C decisions of potentially generous ZD players X and their partners Y. b T1—iterated Prisoners Dilemma with asymmetric incentive to earn 10€ bonus, if pre-determined players achieves to earn at least 10% more than partner during the whole game. C decisions of potentially extortionate ZD players X and their partners Y. c T2—as T1 but any player of each Prisoner’s Dilemma pair can earn the extra bonus dependent of who achieves a competitive advantage to earn at least 10% more than partner during the whole game

Reputation of generous and extortionate players

A good reputation is worth having under many conditions18. Do extortioners damage their reputation because they acted as extortioners? Do generous players improve their reputation? After the experiment all players were asked on a questionnaire ‘would you play again with your partner?' Answers were given under their pseudonym on a 7 point scale with 1 = 'I would very much like to' to 7 = 'not at all'. Answers from all pairs of players included in Fig. 1 (and Fig. 2) were analysed. In T0 generous players received 2.0 ± 0.333 (mean ± s.e.m.) points from their partners, their partners were allocated 4.44 ± 0.71 points (Wilcoxon matched pairs signed-rank test, two-tailed: z = −2.375, p = 0.018, N = 9). Thus, generous players gained a positive reputation, whereas they ranked their partners behaviour as almost neutral. In T1 extortioners received a negative score (5.125 ± 0.766 points). However, they rated their partners whom they had enforced to be cooperative as positive (2.75 ± 0.62 points; z = −2.136, p = 0.033, N = 8). In T2, where both players had the incentive to compete for the extra bonus, extortioners received almost the same almost neutral rating (3.455 ± 0.493 points) as their competing partners (3.818 ± 0.63 points, z = −0.463, p = 0.644, N = 10). As both players tried to be more successful and one of them managed to dominate the other, the similar score reflects the tension between them.

Normal age of access to old-age pension in 2020

Ordinance no. 50/2019, of February 8, was published today in the Official Gazette, foreseeing the age to accede the regular retirement pension in the Portuguese general social security system for 2020.

This update was published in compliance with Decree-Law no. 187/2007, of October 10, which determined the gradual update of the regular age to access the retirement pension in the Social Security general system, considering the average life expectancy at 65 years old, between the second and third year prior to the attribution of the pension.

Age of access to the regular old-age pension

The age to accede the regular retirement pension in the Portuguese general social security system for 2020, in accordance with the provisions of Decree-Law no. 187/2007, of May 10, is maintained in 66 years and 5 months.

Sustainable Factor

This Ordinance also updates the sustainable factor of 0,8533 to be applicable when calculating old-age pensions, at the time of their attribution or conversion.

Repeal rule

This regime repeals the Ordinance no. 99/2017, of March 7, and Article 2 of Ordinance no. 25/2018, of January 18.

Production of effects

These rules are considered effective as from January 1, 2019.