Economic Advancement? Listen to These Businesses
Ralph Carter represented FedEx at the recent B20 discussions in Russia.
The Palaces of Peter and Catherine the Great were a stunning backdrop to last week’s Business 20 (“B20”) meetings in Russia.
Governments around the world are looking for the right mix of policies to spur economic growth. With some countries opting for austerity while others try expansionary fiscal and monetary policies, consensus on the best approach is hard to find.
But there was consensus among the B20 businesses on the steps that we believe are needed to boost global growth. The “Business 20” companies that gathered in St. Petersburg laid out a series of clear recommendations for G20 governments, including: increased infrastructure investment; sound financial regulation to restore confidence in markets; further trade liberalization and a standstill on protectionism; completion of the World Trade Organization (WTO) Trade Facilitation agreement to reduce red tape and facilitate trade; strengthening transparency and reducing corruption; and finally, more emphasis on human capital, job creation, education and skills building. If implemented, these recommendations will go a long way towards accelerating global economic growth. FedEx played a significant role in drafting these recommendations, especially those related to trade and trade facilitation.
Perhaps the strongest of all these messages was the call to complete the WTO Trade Facilitation negotiations at the WTO Ministerial meeting in Bali, Indonesia this December. The WTO Trade Facilitation agreement would cut costs and simplify trade among all 159 WTO member countries. Simplifying customs procedures would make it easier for businesses, especially small and medium enterprises, to expand into new markets.
Developing countries would benefit the most from a Trade Facilitation deal. They would see their trade costs reduced by 13-15%. This would be a huge boost to their global productivity and would allow them to participate in today’s global value chains and increase economic growth.
As with most things in Geneva, getting the Trade Facilitation agreement adopted is not straightforward. WTO members want to have a small package of several initiatives to agree upon at the Bali Ministerial, including measures on agriculture and something for least developing countries. So, as the Trade Facilitation technical negotiations continue there are parallel conversations about these other issues. The risk is that these additional elements could prove too difficult to achieve and the whole effort, including Trade Facilitation, could be derailed. That would be a huge missed opportunity.
FedEx strongly supports conclusion of an ambitious Trade Facilitation agreement at the Bali Ministerial and we hope that G20 countries will make this a priority when they convene again in St. Petersburg in early September. Now is the time for the WTO to conclude a deal, and send a message that multilateral trade liberalization is alive and well.