The G20's Trade Agenda: A Step Forward but Not Far Enough

Posted by on 3 April 2009

The G20 leaders’ communiqué today has provided a vital boost for global trade, but several important trade-related commitments - to developing countries, to sustainable development and to multilateralism - were disappointing or missing. With a further G20 meeting scheduled before the end of the year, leaders must now deepen and expand their trade agenda to address these shortfalls. At the same time, they must acknowledge the democratic deficits of the G20 and explore more inclusive alternatives for global economic decision-making - in particular those that would ensure greater representation of the world’s poorest countries.

The Doha Round

In their communiqué, the G20 leaders called, as expected, for the conclusion of an ambitious and balanced round - and by reference to existing modalities emphasized the importance of moving forwards not backwards with negotiations. What is important, however, is not the conclusion of just any Doha Round, but rather a Round that fulfils the mandate that launched the ‘Doha Development Agenda,’ one which explicitly prioritizes the needs of developing countries and addresses the imbalances already present in the rules of the global trading regime.


Also as expected, the G20 leaders extended to the end of 2010 their agreement not to impose new protectionist trade barriers in whatever guise, calling for crisis-related measures to be sensitive to impacts on other countries. While this had to be said, the credibility of these words is undermined daily in reports of precisely such measures in a diversity of countries. Indeed, the G20’s promise to quickly ‘rectify’ such measures, suggests a tacit confession of already-broken promises.

A more promising point was the G20’s call for the WTO and other international organizations to enhance their surveillance of protectionist measures and to report back publicly to the G20 on a quarterly basis, within their respective mandates. Using existing institutional mechanisms, the WTO has already started a process of monitoring through its trade policy review process. The rub is that it is the WTO member states as a collective, not the G20, which provide mandates to the WTO Secretariat on the scope of its activities, including its authority to ‘name and shame’ members. Nonetheless, the G20’s decisions are already vital steps in the right direction. Now is the time for WTO members to also consider more fundamental reforms to the WTO’s monitoring function that would boost its usefulness to member states. Calls to establish independent monitoring initiatives - that may offer the possibility of swifter and more critical surveys - warrant attention as well.

Trade Finance

The G20 leaders promised a sizeable $250 billion in trade finance. Now, we need to ensure that access to this trade finance is affordable to developing countries and their exporters, and that the poorest countries are top beneficiaries. From the declaration, it is not clear who will be the primary beneficiaries, though at least there is a commitment to acting swiftly - within 2 years. We also need to ensure that the poorest within developing countries receive the support they need to maintain and expand their participation in global trade and to be buffeted from the costs of adjustment associated with the crisis. Africa in particular needs a specific, clear plan for rapid trade-related support - particularly as sharp drops in trade revenues have caused hefty losses for many government budgets and thus threaten a range of social and health services to the poorest.

Aid for Trade

The G20’s promises on Aid for Trade and overseas development assistance (ODA) were underwhelming. While the communiqué details a series of financial measures to boost resources for developing countries through the International Monetary Fund and World Bank, there was no express commitment to ensuring that Aid for Trade represents new resources rather than a diversion of existing ODA. Talk of meeting existing international ODA targets offers little assurance when countries have long failed to meet them. To restore their growth levels, and contribute to the global economic recovery, developing countries need more. Perhaps some of this lies in the promised $50 billion to support social protection, boost trade and safeguard development in developing countries - but the details are as yet unclear. Herein lies a recurring problem: we still lack effective mechanisms for holding developed country to account either on their delivery of both ODA and Aid for Trade commitments.

The Multilateral Trading System

While G20 leaders made several references to the World Trade Organization (WTO) in their communiqué, they did not explicitly emphasize the value of the multilateral trading system. To rectify this shortfall, G20 leaders should use their political weight in the coming months to ensure that a WTO Ministerial Conference is held this year. A full, broad-ranging ministerial conference of the full WTO membership is vital to reinforcing the importance of a multilateral approach to global trade, to reviewing the mandate and performance of the WTO system, and to protecting the institutionality and existing agreements of the WTO system.

A WTO Ministerial Conference would provide an opportunity for political dialogue on how the global trading system can play a stronger role in addressing critical global issues, including poverty reduction, climate change, food security, quality jobs and the sustainability of natural resources. It would also prompt a long-overdue Ministerial discussion of governance reforms that would boost the responsiveness of the WTO to developing countries and to exchange views on the future of the trading system. A Ministerial Conference could also take up a key topic absent from the G20 communiqué - the proliferation of bilateral and regional agreements spawned through asymmetric negotiating processes. For developing countries, a multilateral approach to trade rules, with all its imperfections, offers them the best prospect for managing collectively the mercantilist power plays that define global trade relations.

Ideally, a Ministerial Conference this year could also conclude an ambitious, development-friendly outcome to the Doha Round - but even if the Round is not yet ripe, a Ministerial Conference on the above topics is needed.

Governing Trade for a Fairer, More Sustainable Future

With their April 2nd communiqué, G20 leaders have provided leadership on a range of issues vital to a global economic recovery. They have signalled the way forward by bringing more developing countries formally into the political process for managing the world economy.

Looking ahead, the G20 must also provide leadership on global trade governance challenges that were present before the crisis and will continue to demand attention as we look to the future. Top priorities are to boost the voice of the diversity of developing countries - not just the largest - in global trade decision-making and to make more tangible efforts to integrate sustainable development concerns into both national and global trade policymaking. Here, the G20 properly acknowledged both the importance of a greener, lower-carbon, and more sustainable global economy. A global agreement on climate change in Copenhagen later this year is indeed critical, but G20 leaders should not neglect that the world’s sustainability challenges are deep and serious on a number of fronts. Crises related to fisheries, forests, and water already affect people across the world, but impinge on the economic and social welfare of people in developing countries the most. On all these counts, the world needs measurable benchmarks to assess progress and more concrete actions to ensure the multilateral trading system is part of the solution.

Dr. Carolyn Deere is the Director of the Global Trade Governance Project at Oxford University’s Global Economic Governance Programme. She is the co-editor (with Ricardo Meléndez-Ortiz) of Rebuilding Global Trade: Proposals for a Fairer, More Sustainable Future, International Centre for Trade and Sustainable Development (ICTSD) and GEG - March 2009 (see and author of The Implementation Game: The TRIPS Agreement and the Politics of Intellectual Property Reform in Developing Countries, Oxford University Press: Oxford. She can be contacted at [email protected].

This article wsa first posted on 2 April 2009 at: