G20 ministers reach deal to cut global trade costs
Officials also reaffirm commitment to reduce trade protectionism and set up a new global investment policy
The Group of 20 will work to trim global trade costs by 15 percentage points as part of a series of deals reached during a weekend meeting of trade ministers in Shanghai.
The ministers also agreed to ratify the World Trade Organisation’s trade facilitation agreement by the end of this year, extended a promise to cut trade protectionism,and agreed to establish a new coordinated global investment policy.
G20 members have agreed to act as role models in ratifying the trade facilitation agreement
“G20 members have agreed to act as role models in ratifying the trade facilitation agreement,” Commerce Minister Gao Hucheng said on Sunday at the end of the two-day meeting.
“The G20 members will push the implementation of the accord as soon as possible, help developing countries build capacity ... for the agreement, and endeavour to cut global trade costs by 15 percentage points.”
He also said some of the G20 members, including Turkey, Brazil, Russia and India, had ratified the accord since China became the G20’s host this year.
Saudi Arabia announced during the Shanghai meeting that it had just completed domestic procedures to ratify the agreement, Gao said.
The accord still needs the support of more than 20 WTO members to reach the two-thirds majority to have it adopted.
The accord contains provisions to expedite the movement, release and clearance of goods, and its roll-out could expand global exports by up to US$1 trillion per year, according to the WTO.
The trade ministers also renewed a commitment to try to cut protectionist measures, extending the promise to the end of 2018.
According to the World Trade Organisation, the average monthly number of new trade-restrictive measures imposed by G20 economies reached a record high in the seven-month period to mid-May, the latest period for which data was available. The figures were the highest since 2009, when the organisation started monitoring the restrictions.
From 2008 to May this year, G20 members took a combined 1,583 measures to restrict trade, and 75 per cent of them were still in place, the WTO said.
Bolstering global investment was also on the trade ministers’ agenda.
After 10 rounds of discussions, they agreed to establish nine core guiding principles for global investment, Gao said.
In all more than 3,300 bilateral or multilateral investment agreements had been reached around the world but the deals were too fragmented, prompting the G20 to roll out a coordinated investment policy, Gao said.
The principles include establishing open, non-discriminatory and transparent conditions for investment, and protecting investors with channels to settle disputes.
Vice Commerce Minister Wang Shouwen said the principles, though non-binding, were a global first.
Wang also tried to counter criticism about China’s steel glut, saying the country was working to cut capacity.
He said China reduced steel capacity by 90 million tonnes in the five years to the end of last year and promised to cut another 1 trillion to 1.5 trillion tonnes in the five years to the end of 2020.
The two-day trade ministers meeting was a run-up to the G20 Summit in Hangzhou, in Zhejiang province, in September.
