How can the G20 contribute to the trade and investment liberalization agenda?
G20 members are responsible for about 80 percent of global exports of goods and services. The G20 sees itself as the premier forum for international economic cooperation. It thus has a major capability to shape consensus, set the agenda and facilitate implementation in terms of trade and investment liberalization. Rather than superseding existing institutions, such as the WTO and UNCTAD, it can guide and support them. This has for instance been the case with the 2013 WTO Bali package, which included the Trade Facilitation Agreement. The G20 agreed several months beforehand to support the package, which was crucial for the successful outcome of negotiations.
Trade growth has been sluggish in past years. What are the major obstacles and how can we address them?
Structural and cyclical shifts definitively play a role as growth rates are still modest in the EU and have been slowing down in emerging markets. However, also policy makers have a big responsibility. Even though the G20 agreed on a protectionism standstill in 2008, protectionist measures in force have been rising ever since. In 2016, the monthly average of newly introduced trade barriers has reached its peak in the past eight years. Furthermore, liberalization has been slowing down especially at the multilateral level. While tariff liberalization went hand in hand with pre-crisis trade growth, the now remaining trade barriers are often behind-the border issues and these have not been tackled in a satisfactory way yet. The G20 needs to strengthen the implementation of its commitments and jointly support trade liberalization within the WTO.
What new topics do you want to introduce to the B20 agenda?
I believe that it is crucial to address digital trade. Digital trade significantly lowers transaction costs and fundamentally impacts trade structures and segments. SMEs and developing countries can be the main benefactors as digital trade facilitates market access and widens market reach at low fixed costs. However, the current trade regime has not adapted to technological possibilities. National policies on e-commerce that do not match current needs as well as a lack of rules reigning in digital protectionism – for instance on cross-border data flows – hamper the exploitation of digital trade’s vast potential. The G20 acknowledged the importance of digital trade in 2016. It now has to follow up with an action plan to address barriers to digital trade.