G-20 Trade Ministers Meet in Shanghai to Inject Additional $2tn in
GDP by 2018
Trade
ministers from the G-20 coalition of major advanced and emerging economies
concluded a two-day meeting in Shanghai, China, on Sunday, calling for
increased efforts to tackle sluggish trade and economic growth, while providing
political signals on specific topics such as industrial overcapacity and
environmental goods.
The 9-10 July meeting comes just months before leaders
from the group are set to meet for their annual summit, being hosted this year
by China in the city of Hangzhou. The Chinese presidency has set the theme of
the upcoming summit as “Towards an Innovative, Invigorated, Interconnected, and
Inclusive World Economy,” calling for steps to shore up the global economy and
ensure stronger growth in both the medium and long term.
Nearly
two years ago, G-20 leaders presented national plans aimed at boosting the
group’s collective GDP by over two percent above planned trajectories by 2018.
The plans featured over 1000 combined measures, both existing and new, which
they said could inject US$2 trillion into the global economy.
The promises came amid warnings of increasing trade
restrictions by members of the group, despite repeated commitments to ensure a
“standstill” against any new measures of this kind, along with “rolling back”
existing ones. WTO officials warn that the growing “stockpile” of these
restrictions could have a chilling effect on trade flows.
The Geneva-based organisation
has predicted that growth in world trade by volume will hit 2.8 percent this
year, on par with last year but still slow relative to historical averages.
Given this worrisome context, ministers reiterated
their past “standstill and rollback” pledges, while also signing off on a “G-20
Strategy for Global Trade Growth,” under which they agreed to “lead by example”
in areas such as policy coherence, e-commerce, and slashing trade costs.
Notably, ministers in Shanghai also endorsed the “G-20
Principles for Global Investment Policymaking,” which they explained were
geared toward improving coherence both domestically and internationally in this
area. These non-binding principles include calls against protectionism, stress
the right to regulate “for legitimate public policy purposes,” urge effective
and efficient policies for investment promotion, and highlight the need for
approaches that ensure legal certainty and non-discriminatory, open,
transparent, predictable investment conditions.
Indeed, the Organisation for
Economic Co-operation and Development (OECD) said on 11 July that it would be
delaying the release of its “Composite Leading Indicators” (CLIs) – a tool it
uses to predict developments in the economic arena – until September to better
understand what the vote itself has done to the long-term prospects for the
global economy.
Trade
ministers in Shanghai did devote several paragraphs of their eight-page
statement to current and future trade deals, both within the aegis of the WTO
and outside it.
G-20 ministers have pledged to ratify the accord by
year’s end, while pressing other countries to do the same. To date, 85 WTO
members have ratified the TFA, meaning that just over 20 more members must do
so for the accord to enter into force.
Along with implementing other outcomes agreed in Bali
in 2013 and in Nairobi last December, G-20 members called for advancing future
talks in order to ensure that the WTO’s Eleventh Ministerial Conference (MC11)
in 2017 will be a success.
Ministers also reaffirmed language in the Nairobi
ministerial document aimed at advancing negotiations in certain areas of the
Doha Development Agenda, while stating that some newer topics emerging in regional
trade deals and business sector discussions may be “legitimate” for raising in
the ambit of the WTO, “without prejudice to respective positions relating to
possible negotiations in the future.”
Another
hot-button topic raised in Shanghai was the ongoing crisis across the steel
sector, which has escalated tensions between China – the top producer of the
metal – and various other major players, including the EU and the US.
The debate has particularly drawn attention toward how
much responsibility China has in addressing the problem, and the nature of the
root causes of the global overcapacity in steel, along with aluminium
and other industrial goods. Ultimately, the language agreed at the G-20
gathering does not specifically refer to Beijing, and particularly highlights
the importance of cooperation and coordination going forward.