India is all set to drive a consensus on global trade and investment-related issues, along with accomplishing action-oriented proposals put forward by the Indian Presidency of the G20 at the G20 Trade and Investment Ministerial Meeting (TIMM) to be held in Jaipur on 24 and 25 August, 2023. The stakes are high for India ahead of the preceding 4th and last Trade and Investment Working Group (TIWG) meeting under India’s G20 Presidency which will take place on 21 and 22 August, 2023 in Jaipur, with both the meetings attracting the presence of more than 300 delegates, including trade ministers/secretaries and heads of delegations from G20 member countries, invitee countries, regional groupings and international organisations. Especially amidst expectations that TIMM will pave way for trusted collaboration amongst G20 members to accelerate global trade and investment, co-develop tools that could leverage existing opportunities to make growth inclusive and transparent for all, resonating with Indian Presidency’s G20 theme of Vasudhaiva Kutumbakam.
India chose to take up G20 Presidency during a tough geopolitical and globally critical economic environment, and is also looking at an important role for TIWG in formulating concrete outcomes for inclusive growth that drive trade and investment across Global South, and not among G20 member countries only. In that context the Sunday Guardian spoke to Commerce Secretary Sunil Barthwal on whether India, as per its positioning as champion of the Global South would take up the matter of trade related protectionist measures by major economies which affects developing countries, in the TWIG and Ministerial. “Whenever there is talk about trade, is always in the context of the flow of goods and services becoming “more liberal, becoming more inclusive,” Barthwal said. “When we discuss that agenda, obviously any measures that restrict and restrain trade will also be discussed. Any protective measure if a country has brought out, can also be discussed. When we take this up at G20, we discuss at the principles level.
Bilaterally it may be discussed in specific details with that particular country,” Barthwal told the Sunday Guardian.
Asked further if India envisages a statement reflecting commitment towards becoming more trade facilitative towards LDCs, Barthwal said, “That is what will be discussing, in terms of principles.
Stakes high on India’s G20 trade Ministerial
That what proposition we should adopt so that trade becomes more liberal, more inclusive and that there are less restrictions.” Commerce Minister Piyush Goyal has strongly advocated for equitable distribution of the benefits of global trade by and among all countries, including developing and least developed countries (LDCs) in order to progress towards a new world that is driven by collaboration, sustainable growth and solutions-oriented mindset.
The G20 TIMM also comes at a time when India is looking to enhance its market access among traditional and other partners in this 20-member cohort. The G20 represents 90 per cent of global GDP, 80 per cent of global trade and 2/3rds of global population. “India has signed 13 Free Trade Agreements (FTAs) and 6 Preferential Trade Agreements (PTAs) with various countries of which only 3 FTAs are with the G 20 nations including Australia, Japan and Republic of Korea,” says SP Sharma, Chief Economist and Deputy Secretary General PHD Chamber of Commerce and Industry. “Among the G 20 countries, India holds trade surplus with 8 economies. Going ahead, signing FTA with other potential markets such as USA, Canada, United Kingdom, Mexico and the European Union would enhance India expansion of exports with G20 countries,” Sharma adds.
Among India’s top 10 highly growing export destinations which have shown consistent growth during the last five years (FY 2019 to FY 2023 average) are G20 countries like the Netherlands with 36 per cent growth, Brazil with 28 per cent, Israel with 27 per cent, Indonesia with 24 per cent, Turkey with 22 per cent growth, Australia with 20 per cent, South Africa with 19 per cent growth, Saudi Arabia with 16 per cent growth and Belgium accounting for 13 per cent growth growth. Enhanced integratedness with G20 will scale up the current value of total exports at USD 212 billion in 2021-22 to the level of USD 300 billion by 2024-25 and USD 500 billion by 2029-30.
A substantive momentum has been building up in the run up to the Jaipur Ministerial with the first three TIWG meetings held in Mumbai, Bangalore and Kevadia offering presentations on the five priority issues for the G20 and the Indian Presidency formulating action-oriented concrete proposals on each of the priority issues reflected in the Ministerial Statement.
The first priority for the G20 TIWG and TIMM is ‘trade for growth and prosperity’ based on a G20 member countries’ realization on the need for collective action to integrate transparency in the administration of non-tariff measures, and cooperation among standardization bodies world over. A key priority within this is promoting reciprocal and mutually advantageous services trade frameworks and enhanced alignment of regulatory frameworks to improve market access opportunities and to lower trade barriers in services.
The G20 member countries are also considering the catalytical role of Mutual Recognition Agreements (MRAs) in fostering trade in services and striving to prepare a repository of best practices of G20 members focusing on MRAs on professional services. Recognizing the importance of “Aid-For-Trade Initiative” to enable the Global South to effectively participate in international trade, the G20 is encouraging efforts to mobilize and scale up resources including larger contributions from international financial institutions, strengthen mutual cooperation in the G20 to increase transparency in the use of non-tariff measures (NTMs) and provide technical assistance and capacity building support to the LDCs and developing countries to bolster their ability to comply with SPS and technical requirements in their export markets.
The second pillar is Resilient Trade and Global Value Chains GVCs. The G20 member countries agree that there is a need for mapping GVCs for building predictability and for enhancing their resilience. Further, as 70 per cent of the world trade manifest through GVCs, it is imperative for the G20 TIWG to deliberate on developing mapping framework that could make GVCs resilient towards future shocks.
The G20 is also looking at Reviving GVC growth through enhanced regulatory cooperation, capacity building efforts, provisions for accessible information, transparency in rules and regulations, and streamlining of administrative procedures. The other focus for the G20 is on making GVCs work for sustainable and inclusive development and enhance participation in GVCs by promoting and fostering linkages between foreign enterprises and domestic companies particularly Micro, Small and Medium Enterprises (MSMEs).
This also resonates in the third G20 TIWG priority of ‘Integrating MSMEs in World Trade’ by . addressing impediments created due to inadequate access to information, finance and markets. The G20 has highlighted three main challenges that hamper their participation — inadequate access to market and business-related information, second, which is inadequate access to finance and markets. The G20 strategy is to improve access to information by aiming to create an online one stop hub that can cater to all the information needs of MSMEs in a user friendly manner. Two areas for collective action are to ensure rapid digital enablement of MSMEs by lowering entry barriers for them on digital platforms, granting them affordable, equitable and ensure non-discriminatory treatment equivalent to larger firms.
As for the fourth pillar, ‘Logistics for Trade’, technology has profoundly impacted the way cross-border trade is undertaken and the G20 is prioritising paperless trading system to further reduce transaction costs, making smaller shipments more cost effective, enabling internationalization of operations at a lower cost and ensuring trade competitiveness in a rapidly digitalizing world prominently.
The fifth action area for G20 is ‘World Trade Organisation (WTO) Reforms’ which takes on a bigger import amidst global headwinds that international trade growth is facing. The TIWG stakeholders believe it is opportune for the G20 to reaffirm that the rules-based multilateral trading system, with the WTO at its core, is indispensable for advancing the shared objectives of inclusive growth, innovation, job creation and sustainable development. The G20 TWIG has embraced the priority on WTO reform to build consensus among countries for standing together to support the ongoing reform process and work constructively to achieve meaningful outcomes at the upcoming 13th Ministerial Conference (MC13).
The expectations are running high on the interventions and suggestions made on each of the priority issues by the member countries making it to the draft text for the Ministerial Statement and its annexes.
The deliberations during the TIWG meetings have led to a good level of refinement in the drafts, and clearly reflect the commitment of G20 TIWG to make global trade inclusive. A lot is obviously riding on India’s G20 Presidency, where the aim, according to the Commerce Secretary, is to strengthen the shared understanding of challenges that are hindering the acceleration of global trade and investment and collectively explore actions that are needed to build a robust global trade ecosystem.