B20 / G20 Momentum
I’ve just wrapped up attending the B20 (Business20) Summit in Los Cabos, Mexico where business leaders met to discuss the global economy and recommend a path forward to sustained growth. We met just ahead of the annual gathering of the G20 Leaders’ Summit here, where finding solutions to strengthen the economic picture were atop the agenda, and we committed to working with the industrialized and developing nations to achieve that goal.
We drew up recommendations to the G20 nations that we believe would quickly help boost the economy and help create jobs. We urged that they reject measures that restrict trade and investment, instead promoting efforts to enhance them. We also believe more concrete action is needed by the World Trade Organization on a few items, such as wrapping up an agreement on simplifying border and customs measures and expanding the agreement to cut tariffs on technology products. We also recommended that the G20 Leaders renew their support for cross-border investment, which will further contribute to economic and job growth. We encouraged them to create a special working group on this issue and report at the next summit in Russia next year.
The best news out of Los Cabos was the announcement that Mexico and Canada have been invited to join the Trans-Pacific Partnership negotiations. This is a great development and we fully support their entry into the TPP. This will strengthen the trade relationships with these two countries and improve North America’s competitive position in the global economy. Those talks are aimed at improving links to the fast-growing markets in the Asia-Pacific region.
We at FedEx see trade as one of the key factors to improving the outlook for jobs and growing the economies around the world. Unfortunately, we are facing some headwinds that are slowing growth and some business opportunities. And if that was not a worrisome sign on its own, a new WTO report issued earlier this month found 124 new barriers to international trade erected just since October 2011. The WTO warned that this new round of tariffs, import licenses and customs controls now seem less about trying to remedy the financial crisis in those countries and more about full-throated nationalism. WTO Director-General Pascal Lamy went so far as to say that for the first time since the 2008 financial crisis began, the report was “alarming”.
The last thing our global economy needs is more trade barriers and risk reversing the budding recovery. Time and time again, it has been proven that more international trade contributes to economic growth and development for those who successfully resist such obstacles. New tariffs raise prices and costs, limit the ability to move those goods and create unnecessary bureaucracy. For G20 countries who just met in Mexico, those new barriers affected 1.1 percent of their imports and almost a full 1 percent for the world, according to the WTO report.
FedEx is at the epicenter of global trade and we know firsthand its benefits, from delivering high-tech goods to developing nations to getting critical medicines to those in need. We help get those materials there more quickly and efficiently. But with new trade barriers, that makes our economy less competitive and more at risk to shocks, at a time we can ill-afford. The recent Free Trade Agreements finalized last year with South Korea, Panama and Colombia have begun opening new doors and serve as prime examples of strengthening and expanding the U.S. economy as well as leading to new innovations.
Momentum coming out of the B20 could also serve as a boost for negotiations for a new global free trade agreement covering the service sectors. Talks are due to continue on that front later this month in Geneva and we look with keen interest on how those develop and hope they receive additional support from additional G20 members.
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May 30, 2018
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