During the G 20 summit in Hangzhou, China, on 4 and 5 September, the President of the European Council, Donald Tusk and the President of the European Commission, Jean-Claude Juncker will call for the commitment made by the biggest economies in the world to resist protectionism in the action they take and for the difficult question of overcapacity in the steel industry to be tackled at a multilateral level.
In a letter sent to EU leaders on Tuesday 30 August, Tusk and Juncker explain that "The G20 will discuss how to reverse the slowdown in the growth of trade and foreign investment. This means reinvigorating efforts to open markets and level the playing field, and to communicate the benefits of trade to citizens while addressing their concerns". They also insist that "The G20 has a particular responsibility to buttress the multilateral trading system. It should therefore provide genuine guidance for the future global trade and investment agenda. The pledge to resist protectionism should not only be renewed but reinforced in practice".
One diplomatic source confidentially informed us on Tuesday that in Hangzhou “The EU will be a strong advocate of free and fair trade, promotion of environmental and social standards". The two European leaders also call for “urgent and effective action” to cut overcapacity in the steel and other sectors, including by tackling subsidies and other market-distorting measures that have contributed to it. Our same diplomatic source explained "On steel, there is a need to find a solution to overcapacity. It is a multilateral issue to be addressed". Our source also explained that there is an “intention” to create an OECD forum to monitor the evolution of the sector. EU leaders will also call for ratification from WTO countries before the end of 2016 and the swift implementation of the trade facilitation agreement, which seeks to simplify and streamline customs procedures, as well as increase the participation of developing countries in international trade.
They will also highlight the need to kickstart WTO discussions on new issues such as digital trade, investment and export restrictions. In the field of investment, G20 countries in Hangzhou are expected to approve the main guidelines for promoting greater coherency in investment policies. The G20 is also expected to give a strong boost to the conclusion of negotiations for a plurilateral agreement on the liberalisation of environmental goods by the end of 2016.
Modest recovery in G20 trade in merchandise. According to the most recent figures from the OECD published on Tuesday, the trade in merchandise among G20 countries experienced modest growth in the second quarter of 2016, for the first time since the beginning of 2014. Nonetheless, it is still significantly below the post-crisis high points. Exports from G20 countries increased by 1.5% and imports by 2%, after having experienced seven and eight consecutive quarterly falls. This reflects the increase in oil prices (to almost $50 the barrel in June 2016 from around $35 the barrel in December 2015. (Original version in French by Emmanuel Hagry)