The world’s top 20 economies in a meeting ahead of the big summit later this year agreed to improve international trade governance in view of the global slowdown due to increasing anti-trade measures that have become more universal since 2009. G20 Trade Ministers said in statement released following two-day meeting at Shanghai, G20 nations, which account for 85 per cent of the world trade, would remain committed to an open global economy, and will further work towards trade liberalisation and facilitation.
The meeting endorsed the G20 strategy for Global Trade Growth, in which the economies will lead by example to lower trade costs, harness trade and investment policy coherence, boost trade in services, enhance trade finance, promote e-commerce development and address trade and development. G20 economies also vowed to support low-income countries (LICs) to participate more in global value chains (GVCs) to drive global trade growth. It further stated that, the economies would support policies to allow firms of all sizes, including small-and-medium-sized enterprises (SMEs), in countries with different developing levels to participate in and fully utilise GVCs.
According to the World Trade Organisation (WTO) statistics, global trade growth has slowed significantly since 2008, from an average of over 7% per annum between 1990 and 2008, to less than 3% between 2009 and 2015. Last year marked the fourth consecutive year with global trade growth below 3%. Besides, the World Bank last month cut its forecast for the global economy this year, predicting it will expand 2.4 percent, down from the 2.9 percent it expected in January.
The WTO unveiled a new trade-related index called the World Trade Outlook Indicator (WTOI), which is designed to provide real time information on trends in global trade. The current reading suggested that trade growth will remain weak into the third quarter of 2016.