G20 – commitment to open trade reaffirmed, but actions speak louder than words

In 2014, G20 members stated that they would focus on how trade contributes to economic growth and on ways to boost global trade. There is widespread acknowledgement that since G20 members represent around three-quarters of global trade the forum is well-placed to improve the growth of global trade and lead by example.

In the build up to this year’s summit in Brisbane, Australia, there were numerous discussions on ways to remove obstacles to trade in the countries’ G20 growth strategies, including measures that will ease the cost of trading across borders and facilitate participation by businesses in regional and global value chains. Protectionism was a major theme, as measures are on the increase worldwide – 407 measures were introduced last year, up from 308 the previous year. These new restrictive measures affect world merchandise imports valued at $240 billion. This trend needs to be reversed, and the G20 can collectively lead by example. The OECD estimates that actions to reduce global trade costs by 1% could result in a worldwide income increase of $40 billion, with 65% of the benefits accruing to developing countries.

Despite acknowledging the benefits of rolling-back these protectionist measures, the Communique gives no clear indication of when and how this will happen. There is no mention of a timeline – the members merely reaffirmed their “longstanding standstill and rollback commitments to resist protectionism” – a commitment that in light the figures above, doesn’t seem to be being kept.

The role of trade as a driver of growth, improved living standards and job creation was highlighted in the communique, which also emphasised the need to create policies that “take full advantage of global value chains and encourage greater participation and value addition by developing countries”. To this end the G20 committed to a timely implementation of the WTO Trade Facilitation Agreement concluded in Bali last December – which could potentially foster $1 trillion in economic activity and create 21 million new jobs, 18 million of which would be in developing countries.

As the world looks towards 2015 and the creation of a new global development framework in the form of the Sustainable Development Goals, it is imperative that the role of trade as a facilitator is fully acknowledged – the promise to create growth strategies that “include reforms to facilitate trade by lowering costs, streamlining customs procedures, reducing regulatory burdens and strengthening trade-enabling services” will be an essential part of the enabling environment required to help countries achieve those goals.

Download the Policy Note Boosting trade for growth and jobs.

Read the G20 Communique

summary

In 2014, G20 members stated that they would focus on how trade contributes to economic growth and on ways to boost global trade. There is widespread acknowledgement that since G20 members represent around three-quarters of global trade the forum is well-placed to improve the growth of global trade and lead by example.

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By | 2017-10-08T11:56:19+00:00 December 10th, 2014|Uncategorized|0 Comments

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