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  • The G20 efforts on fighting protectionism and trade barriers

The G20 efforts on fighting protectionism and trade barriers

Nearly a thousand trade barriers were erected worldwide since 2008, affecting 4.6% of global trade, said Maxim Medvedkov, Head of the Department for Trade Negotiations of Ministry of Economic Development of the Russian Federation.

"The initiative on renouncing new protectionist measures was announced at the first G20 Summit and was reaffirmed at all subsequent Summit meetings," the expert said. "Today we are discussing the possibility of extending the moratorium until 2016. This is a fundamentally important decision, because the G20 countries account for approximately half of global trade."

Speaking about cooperation with the WTO, Mr. Medvedkov said that the G20 countries are interested in the success of the ministerial conference in Bali.

According to Harold W. McGraw, Chair of the United States Council for International Business, Vice-President of the International Chamber of Commerce, and CEO of The McGraw-Hill Companies, if the ministers fail to come to an agreement in Bali it will be evidence of the weakness of the WTO. On the other hand, the signing of the WTO Trade Facilitation Agreement in December this year would be a strong signal to the market that the WTO continues to play a major, leading role, Mr. McGraw said.

Alexander Daniltsev, Head of the Global Trade Group at the G20 Expert Council, said that transparency is a vital element in fighting protectionism in trade. "It is a crucial principle of the WTO and of multilateral regulation," he said. "The measures taken by the G20 during the downturn were complemented with monitoring, that is, measures to ensure transparency of the regulation process."

Mr. Daniltsev also pointed to a sharp increase in the number of regional trade agreements and to the importance of increasing transparency in this sphere. "Transparent regulation offers a clear view of regional interaction and its relation to multilateral mechanisms," he said.

Alexei Mordashov, Chair of the Trade as a Growth Driver Task Force of Business 20, recalled that protectionist measures were a feature of the Great Depression of the 1930s, and that as a result global trade plummeted by 50% within a year. Nothing of this kind happened during the 2008-2009 crisis, in part thanks to the G20 countries' commitment not to introduce new protectionist measures. It was also one of the reasons why the global economy rebounded so quickly in 2010-2011, the Business 20 representative said.

Pavel Kadochnikov, Vice-Rector of the Russian Foreign Trade Academy, the Russian G20 Expert Council, spoke about the global value chains (GVCs), which is a new issue on the G20 agenda. He said that it is not enough to analyze export and import volumes to get a full picture of global trade, because most goods cross the border several times during the production stage, thereby creating global value chains. This year the OECD worked together with the WTO and UNCTAD upon the request of the G20 to prepare a joint report on GVCs implications. "Analyzing the trade volume has become a challenging task now, because the components of most goods are produced in one country, are joined into units in another country and undergo final assembly in still another country," the expert said. "We need to understand these global value chains and look at the barriers hindering their development."

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