“Our growth, to be strong, must be reinforced by inclusive, robust and sustainable trade and investment growth.” –G20 Leaders’ Communiqué 2016
Against the backdrop of an uneven global economic recovery, subpar global trade and investment growth, trade disputes and the recently held Brexit referendum vote in the UK, trade and investment were top of mind for world leaders at the just-concluded Eleventh Group of 20 (G20) Summit held on September 4-5, 2016 in Hangzhou, China.
The G20 is the premier international forum for cooperation on global economic governance and its members account for 86 percent of global GDP and 78 percent of global trade. China currently holds the G20 presidency.
With the goal of providing political leadership to ensure “inclusive, robust and sustainable trade and investment growth”, G20 leaders endorsed the decisions taken by G20 trade ministers at their Trade Ministers Summit held in Shanghai in July this year. Among the key outcomes of that July meeting were the Terms of Reference of the new G20 Trade and Investment Working Group, the G20 Strategy for Global Trade Growth and the G20 Guiding Principles for Global Investment Policymaking.
Key Trade and Investment-Related Aspects of the G20 Leaders’ Communiqué
Below are some of the key trade and investment-related takeaways from the G20 Leaders’ Communiqué:
- Reiteration of G20 leaders’ recognition that strong growth must be reinforced by “inclusive, robust and sustainable trade and investment growth”;
- Commitment to strengthening G20 trade and investment cooperation;
- Commitment to a “rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system” with the World Trade Organisation (WTO) playing a central role;
- Commitment to continuing the post-Nairobi work. It is instructive that the Doha Round was not mentioned, confirming that the Doha Development Round is effectively dead despite disagreement among WTO members on the round’s future in the communique to the WTO Nairobi Ministerial held December 2015;
- G20 leaders also reiterated their support for the inclusion of new issues into the WTO negotiating agenda, another area on which WTO members saw strong divergences of opinion in the aftermath of the Nairobi Ministerial. The G20 leaders noted that “a range of issues may be of common interest and importance to today’s economy, and thus may be legitimate issues for discussions in the WTO, including those addressed in regional trade arrangements (RTAs) and by the B20″;
- Commitment to ensure their regional agreements and bilaterals complement the multilateral trading system;
- Commitment to ratify the Trade Facilitation Agreement by the end of 2016;
- Indicated their support for the importance of the role that WTO-consistent plurilateral trade agreements “with broad participation” can play in complementing global liberalization initiatives and mentioned the Environmental Goods Agreement as an example;
- Reiteration of their opposition to protectionism on trade and investment “in all forms” and reiterated the commitments to standstill and rollback protectionist measures till the end of 2018 and to support the work of the WTO, UNCTAD and Organisation for Economic Development (OECD) in monitoring protectionism;
- In recognition of the rising anti-globalisation and anti-trade sentiment in many western countries, G20 leaders “emphasize[d] that the benefits of trade and open markets must be communicated to the wider public more effectively and accompanied by appropriate domestic policies to ensure that benefits are widely distributed”;
- Endorsed the G20 Strategy for Global Trade Growth, as well as the G20 Guiding Principles for Global Investment Policymaking which “will help foster an open, transparent and conducive global policy environment for investment”. These were decided at the G20 Trade Ministers Meeting held in July;
- Indicated their support of policies encouraging firms of all sizes (particularly women and youth entrepreneurs, women-led firms and SMEs) to take full advantage of global value chains (GVCs);
- Although China was not specifically identified, G20 leaders noted that global steel oversupply was a global issue requiring a collective response and increased information-sharing. They called for the formulation of a Global Forum on steel excess capacity to be facilitated by the OECD with the active participation of G20 members and interested OECD members.
For the tax-related aspects of the communiqué by FRANHENDY Attorneys, please visit here.
The full communiqué may be read here.
Alicia Nicholls, B.Sc., M.Sc., LL.B, Consulting Legal Researcher, FRANHENDYATTORNEYS.