The G8 and trade – Empty Promises?

When David Cameron announced that trade was to be a top priority at the G8 Summit there was hope that this meeting would kick-start the global free trade agenda, paving the way for a successful deal at the WTO Ministerial in December. There was the opportunity to leave a legacy that would benefit the vast majority of the world’s population both now and far into the future, but it appears the leaders of the G8 lacked the courage and conviction to deliver it.

The communiqué states that the G8 will “break down barriers to trade at home and abroad by resisting protectionism”, by committing to the multilateral trading system, concluding the Doha trade round, improving infrastructure and customs to make cross-border trade easier. But these commitments are nothing new, having all appeared in the 2005 G8 statement. The 2013 version not only repeats old pledges, but has omitted the thorny issues of eliminating export subsidies and achieving duty-free, quota-free access for LDCs altogether – commitments made in 2005 that have not been met.

Ironically the reiteration of the G8’s commitment to free trade came in the same week as the release of the 9th WTO report on policy measures taken by G20 members – a report showing that in the past 7 months more than 100 trade-restrictive measures have been implemented by G20 economies. Despite leaders requesting in 2009 that the WTO monitor their pledge to refrain from protectionism, this is clearly a sign that they are more than prepared to break this promise.

The timing of the WTO report rather casts doubt on the substance behind the rhetoric that the G8 will “refrain from and roll back protectionist measures and support a further extension of the G20 standstill commitment.” Let us hope that, despite this, their intention to secure a WTO deal in December will be a promise “to help developing countries slash the barriers to trade that impede growth” that will be kept.

It has been estimated that the long term benefits of an even moderately successful Doha Round would be vastly more than the $1 trillion claimed by Cameron in his pre-G8 speech. Professor Kym Anderson of the World Bank estimates that the annual global GDP, compared to if there were no extra free trade, would in 2020 be about $5 trillion larger, with $3 trillion going to the developing world. If the somewhat woolly rhetoric of the G8 can turn from good intentions to definitive action and political will power by December, then it would be impossible for the WTO to ignore.

In the run up to the Summit, Dr Donald Kaberuka, President of the African Development Bank told G8 leaders: “nations throughout the world, throughout history have prospered through trade and investment….Africa too seeks to trade her way out of poverty.” Although they failed to produce a specific plan of action at Lough Erne, there is still time for the G8 to grasp this historic opportunity to help Africa achieve this goal and lead the rest of the world towards a game-changing WTO deal in December.

Read the G8 communiqué here

Summary

When David Cameron announced that trade was to be a top priority at the G8 Summit there was hope that this meeting would kick-start the global free trade agenda, paving the way for a successful deal at the WTO Ministerial in December. There was the opportunity to leave a legacy that would benefit the vast majority of the world’s population both now and far into the future, but it appears the leaders of the G8 lacked the courage and conviction to deliver it.

 

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By | 2016-03-27T19:01:34+00:00 June 21st, 2013|Uncategorized|0 Comments

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