Trade and Investment Recommendations
For decades trade and investment have been fostering growth and welfare. Still, the number of trade barriers enacted by G20 members has been growing for several years. Public opposition to trade and investment agreement has increased in many G20 countries. This is a dead-end approach: trade and investment are not zero sum games. Much on the contrary they benefit all: exporters, importers, and consumers.
In the B20 Trade & Investment Taskforce more than 110 business representatives from over 25 different countries and diverse economic sectors developed a set of highly relevant recommendations to the G20, that speak for the entire global business community. The three focus areas of the taskforce were:
Strengthen an open and inclusvie global trading system: The G20 has to collectively advocate for free and fair trade. Governments and business need to improve the communication on the effects of trade and common rules. Inclusiveness of trade has to be strengthened so that everyone has the opportunity to benefits of its vast advantages. This has to incude social safety nets and adjustment assistance as well as greater efforts from both governments and business to improve lifelong learning and requalification opportunities. Protectionism destroys economic potential and harms the poorest the most. G20 members have to implement the agreed upon protectionism standstill and rollback. Therefore they should strengthen the WTO monitoring of G20 trade measures, making it more detailed and qualitative. The rules based global trading system is the best guarantee to ensure that trade is not only free but also fair. The G20 has to commit to repcting WTO rules and decisions and strive to strengthen liberalization attempts under the WTO umbrella.
Make use of digital trade potential: Digital trade can substantially facilitate the participation of MSMEs and developing countries in global value creation. The G20 should reinforce capacity building for digital trade, including inter alia digital skills, the buildup of adequate legal frameworks, and the expansion of ICT infrastructure. National e-commerce-related polciies need to be nondiscriminatory and interoperable. Hitherto, the global trading system barely contains rules governing digital trade. This fosters digital protectionism and legal uncertainty. The G20 should strive for a WTO negotiation mandate on a digital trade agreement. Negotiations should inter alia include the gurarantee of free cross-border data flows (with clearly defined safeguards for the protection of privacy and security), trade facilitation, regulatory coherence, as well as trade with digital products and services.
Foster investment facilitation: FDI plays an important role for development. In 2016, the G20 made an important step with its Guiding Principles for Investment Policymaking. Building on these, the G20 should adopt an Investment Facilitation Package, which should contain measures to reduce administrative barriers as well as best practices for regulation. Barriers for FDI market access should be reduced. Assistance should be provided to developing countries in setting adequate reliable legal frameworks to attract FDI. There is a multitude of bilateral investment treaties. However, multiltareal rules or institutions are missing. The G20 should manadate international organizations to investigate the feasability of a multilateral investment framework as well as its potential advantages and drawbacks.