Sustainable and Inclusive Value Chains: New G20 Trade Strategy Focuses on Sustainability
In July 2016, the G20 agreed on a new trade strategy to reduce trade costs, integrate economies more strongly into global value chains, and promote sustainable development. In order to achieve this, the G20 commit inter alia to implement the WTO agreement on trade facilitation (TFA), dismantle behind-the-border barriers, and support developing countries with technical assistance and capacity-building. In particular, the G20 trade strategy emphasises the potential of cross-border e-commerce to facilitate the integration of poorer countries and SMEs into global value chains by lowering trade costs. The G20 encourages dialogues between governments and the private sector to identify crucial measures that foster international e-commerce. This shall include discussions on appropriate trade policy measures, regulation, and standardisation.
Focus on investment, trade in services and developing countries
G20 members have also committed themselves to take coherent political measures to promote expanded, more inclusive and more sustainable global value chains. Special attention is to be devoted to the effects on investment, trade, and promotion of trade in services, especially with poorer countries. Beyond this, easier access to trade financing, broader inclusion of developing countries in regional free trade agreements, and improved aid for trade are highlighted as essential conditions for sustainable trade. Generally, the G20 seeks to integrate sustainable development at all levels of trade policy.
Joint efforts necessary
The G20 trade strategy offers important starting points for promoting trade and making it more sustainable and inclusive. On the one hand, it is now up to the individual G20 members to adopt their own national follow-ups – for example, through the reduction of trade barriers and facilitating processing of exports and imports. On the other hand, many issues such as promoting cross-border e-commerce also require international cooperation. Dialogue by itself is often not sufficient. The German G20 Presidency, which begins on 1 December 2016, must seek concrete actions to bring the new G20 trade strategy to life.