G20 Japan Leader’s Summit; Takeaways
The G20 Japan Leader’s Summit was a reminder of just how difficult consensus is in the current political climate when there is so much difference and conflict between G20 countries and pressure on leaders to deliver populist policies. 50% of G20 countries now have overtly protectionist governments and trade barriers are once again rising at an alarming rate - fourfold since 2015. In the grand scheme of things, tariff barriers remain low but the trend is upward and this doesn’t include discriminatory barriers to services trade, affecting 80% of the UK economy.
Underlying the political challenges are a host of complex policy issues; the rapid advancement of technology, changing consumer behaviour, growing inequalities, changing demographics, the need to de-carbonise economies and tackle climate change and a trade war between the two largest economies. None of these are easy issues to solve in the short term which is why we need G20 countries to show leadership and why we, as business community need to continue speaking up.
In the UK we are caught up in it too. No one wants to say it, but Brexit is, at its core, a populist movement with protectionist outcomes. Limits on the movement of labour, tightening up on controls of foreign mergers and acquisitions and, if the UK crash out of the EU in October, a return to hard borders. To the outside eye, this all looks distinctly like protectionism and populism albeit not with the inward-looking nationalist tones of other governments around the world.
Despite the challenges and distractions of bi-lateral meetings between G20 leaders and trips to North Korea, there was plenty in the final G20 Declaration to be positive about, especially in relation to making progress on digital trade and trade reform. Here are some highlights:
10 Takeaways on Digital Trade
- Acknowledgment that digital trade is a means to address inequality and deliver inclusive, sustainable growth
- Support for policies that promote a fair, competitive, and non-discriminatory marketplace
- Acknowledgement that cross-border flow of data, information, ideas and knowledge generates higher productivity, greater innovation, and improved sustainable development.
- A commitment to cooperate and encourage the interoperability of different digital frameworks – common standards and regulatory alignment and inclusive dialogue with all stakeholders
- A commitment to cooperate and address internet security issues and promote a fair, predictable, transparent, competitive and non-discriminatory business environment.
- A commitment to make the internet and digital economy work for everyone – to work to shared common values and principles including equality, justice, transparency, accountability and trust
- Acknowledgement that governance in the digital era needs to be innovative as well as provide legal certainty.
- Support for initiatives that promote investment in digital infrastructure - fibre optic cables, 5G and other ultra-high-speed connectivity technologies, skills, labour market reform and a commitment to deliver universal and affordable access to the Internet by all people by 2025
- Agreement that smart cities should promote transparency, resiliency, privacy, security, efficiency, and interoperability
- A continued commitment to share best practice through the G20 Repository of Digital Policies
10 Takeaways on Trade Reform
- A commitment to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment - to keep markets open
- Re-affirmation that international trade is important for productivity, innovation, job creation and development and acknowledgment of the role of the WTO in delivering these outcomes
- Agreement that action is necessary to improve the functioning of the WTO – recognition of the business community's call for the G20 to continue supporting the multilateral trading system
- Agreement to better communicate the benefits of trade to citizens - and address the challenges
- A commitment to increase the participation of groups that have not benefitted sufficiently from international trade - such as women, youth, MSMEs and developing countries
- A commitment to work constructively with other WTO Members to undertake necessary WTO reform with a sense of urgency in the lead-up to the 12th WTO Ministerial Conference in 2020
- Recognition of the importance of transparency in WTO Members’ trade related policies – specifically in relations to notification, and to fulfil existing notification obligations
- Acknowledgement of work to strengthen the activities of the WTO regular committees and bodies in order to make the WTO function more effectively - including updating WTO rules
- Re-affirmation of the importance of the Work Programme on electronic commerce – including the current negotiations and the need to enhance investment in ICT infrastructure
- Agreement that action is necessary regarding the functioning of the dispute settlement system
As we now plan ahead for G20 Saudi Arabia, we need to be super pragmatic, tenacious and fiercely practical in how we contribute to moving agendas forward. To focus where we know there is political consensus i.e. digital trade and trade reform and focus on the institutions delivering the work on the ground - mostly at the WTO. This is not the time to present 40 recommendations on 40 different issues from 40 different voices - we will be more effective if we work together on a shortlist of core priorities where we agree with business elsewhere in the world and act together with concerted engagement campaign across the G20 capitals and international institutions to ensure there is transparency and accountability in the delivery of G20 commitments. If we do, we stand a fighting chance of making progress on what we know makes a difference to making trade work for everyone – something we all agree needs to happen.
Please, see below the G20 Osaka Leaders’ Declaration