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Analysis

The Brisbane 2014 Trade Report

Kathryn Kotris, G20 Research Group
November 16, 2014

The 2014 G20 Brisbane Summit focused on enacting policies and strategies to spur global growth by 2%. The agenda is indeed ambitious, as outlined in the Brisbane Action Plan. Macroeconomic growth policies are achieved in part through enhanced trade and have consistently been issue areas at G20 summits since 2008. Trade is essential to the increasingly integrated global economy and requires ongoing support from G20 members to complete trade negotiations with each other as well as with other members of the World Trade Organization (WTO). All G20 countries are members of the WTO. To this end, there was strong emphasis at the Brisbane Summit on the need to complete existing bilateral, regional and multilateral agreements that are complementary and not mutually exclusive so as not to hinder future treaties.

The WTO's Trade Facilitation Agreement was concluded at the Bali ministerial meeting in December 2013. Members proceeded to seek individual country ratification of the agreement. However, India was unable to do so under the terms of the Public Stockholding for Food Security Purposes, since it imports much of its food supplies. This impasse in July 2014 halted progress of ratification, and the agreement was in jeopardy until India's Prime Minister Narendra Modi and US president Barack Obama agreed to a solution during the East Asia Summit on November 12, 2014. This led the way to fulfilling the terms of the next stage of the agreement within a few weeks. This news was welcomed by the G20 as it is seen as imperative to meeting the growth targets over time.

With the ability to move goods and services more efficiently across borders, firms may increase productivity and create demand, which in turn creates jobs, including in less developed countries. The vast supply chains that all serve to create products "made in the world" require minimal border congestion to export competitively. The G20 has consistently and effectively avoided protectionism, which has been a recurring commitment, and ultimately minimized economic decline at the height of the global financial crisis.

The success of reviving the Trade Facilitation Agreement may serve to encourage the 12 participants of the Trans-Pacific Partnership to conclude their final negotiations and meet the growth agenda of the Brisbane Summit. The deliberative agenda provides strong incentives for the European Union and United States to complete the Transatlantic Trade and Investment Partnership. These two trade agreements comprise more than 75% of global trade with far-reaching economic improvements.

The WTO, the Organisation for Economic Co-operation and Development, and the United Nations Conference on Trade and Development will, according to their mandates, monitor the progress of G20 trade activities including any protectionist measures. These institutions will measure the impacts of such trade activity and will report to the G20 every six months. Such scrutiny will keep in check any impulses to protect industries for political motivations while encouraging the pursuit of transparent, legal and highly beneficial trade arrangements. As always, the G20 supports the successful conclusion of the Doha Development Agenda, although the focus has moved on to concluding ongoing trade agreements rather than the comprehensive and complex Doha package. Moving forward with the Trade Facilitation Agreement should have the effect of spurring quick enactments of the other agreements as the outcomes of liberalized trade have proven to enhance growth and job creation. The Global Infrastructure Initiative, individual national employment plans, and the Food Security and Nutrition Framework issued along with the Brisbane Action Plan require resources, goods and services to fulfill their mandates. All these initiatives are complementary to completed trade agreements, as collectively they provide concrete inroads to creating economic growth.

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