In a report released on July 8, the B20 Coalition urged G20 leaders to take important steps to boost global trade and accelerate the economic recovery.
"Trade for Growth: A New Trade Regime for the 21st Century", the first in a series of B20 Coalition position papers for 2014, reviews the current trade landscape and presents seven recommendations to capitalize on the favourable climate created by the WTO Bali agreement of 2013.
Perrin Beatty, President of the B20 Coalition, a group of leading independent business associations from G20 countries, said: "The breakthrough in Bali injected fresh energy into trade negotiations. Governments must now seize the moment to push the trade liberalization agenda forward, get the Doha round back on track and thereby improve the lives of millions of people around the world".
In its paper, the B20 Coalition urges policymakers to usher in a new era by increasing trade and investment openness, strengthening multilateral trade and increasing coherence between preferential trade agreements and the WTO. Unequivocal and speedy implementation by G20 and other signatories of the Bali agreement on trade facilitation is an essential first step in this direction.
As well as highlighting new challenges and opportunities in the global trade landscape, such as the extension of global value chains (GVCs) and the burgeoning trade in services, the document also raises concerns about the non-tariff trade barriers, known as "murky protectionisms", which have mushroomed during the recent economic crisis.
Foreign direct investment (FDI) is another area where the Coalition sees growth opportunities stifled by ineffective regulation. "FDI is a powerful driver for trade and growth", says Perrin Beatty, "but lack of a multilateral agreement and proper tools for protection of investors is preventing this instrument from achieving its full potential".
Key recommendations from the report include the following:
- To conclude the Doha round, G20 governments should find a balanced approach to issues such as agriculture, non-agricultural market access (NAMA) and services.
- Governments should advance openness along value chains for both goods and services. This does not only mean ambitiously reducing tariffs but also tackling red tape at borders. To advance openness in services trade, not only do G20 members need to commit to greater market access in cross-border service supply, they also need to engage in a more meaningful discussion on the temporary movement of labor.
- After the conclusion of the Doha Round, the G20 should initiate a debate on rules for investment, government procurement, and competition as well as state-owned enterprises and export restrictions with the prospect of integrating respective disciplines into the WTO.
- Plurilateral/sectoral agreements (within and outside the context of the WTO) such as on IT products or services pose an opportunity for G20 members to advance openness in global trade. G20 members should seize this opportunity while being careful that these agreements are designed in ways that allow for easy multilateralization at a later stage.
- Given the proliferation of Preferential Trade Agreements worldwide, more comprehensive disciplines are needed in order to improve coherence among such trade deals and to ensure that they are a stepping-stone in the multilateral liberalization process rather than a stumbling block.
About the B20 Coalition
The B20 Coalition brings together leading independent business associations from G20 economies in a shared mission to address G20 policy-makers on behalf of more than 6.5 million businesses of all sizes and from all sectors.
This statement is issued in Berlin, Brasilia, Brussels, Buenos Aires, Istanbul, Johannesburg, Madrid, Mexico-City, New Delhi, Ottawa, Paris, Rome, Seoul, Sydney, and Washington DC by the B20 Coalition members.
B20 Coalition Members
Ai Group, Australia, BDI, Germany, BUSA, South Africa, BUSINESSEUROPE, Europe, CCC, Canada, CEOE, Spain, CII, India, CNI, Brazil, Confindustria, Italy, Coparmex, Mexico, FKI, South Korea, MEDEF, France, TUSIAD, Turkey, UIA, Argentina, US Chamber, USA