By Will McGarrigle, Principal International Trade Adviser at the CBI
It’s been an increasingly difficult time for global trade in recent years. Protectionism has been on the rise ever since the financial crisis, with restrictive trade measures on G20 imports up 30%. ‘Buy American’ provisions and damaging tariffs are the legacy of the Trump trade agenda. The growth of China is causing tensions at the WTO. And of course, businesses have grappled with all the uncertainty around the UK’s future trade relationships with the EU and beyond. But this year feels a pivotal moment and last week’s Business 7 (B7) Summit built optimism and consensus for a new era of cooperation.
At the CBI, we were pleased to bring together fellow business associations from each of the G7 countries in the first of a string of international summits in the UK this year. The communiqué urges the G7 to find common solutions to address some of the biggest global challenges ahead of the leaders’ summit in Cornwall next month; that starts with a united mission to end the health crisis. Short-term issues like restarting international travel, which services trade heavily relies on, can also make a huge difference. It’s also crucial that longer-term challenges such as fixing the World Trade Organisation (WTO) are firmly on the table too.
Dr Ngozi Okonjo-Iweala, newly elected Director General of the WTO, joined last week’s B7 summit to offer her reflections on the way forward. With her appointment and a new US administration in place, there’s a feeling of a window of opportunity in the lead up to the MC12 Ministerial conference at the end of the year.
The B7 has identified a few initiatives that can build confidence in the WTO. We’d like to see the agreements on fisheries and services regulation finalised in the next few months. These are not only important agreements to secure but can signal the WTO as a useful vehicle for progress and if real headway can be made on the e-commerce negotiations, global trade stands to benefit. E-commerce now makes up 30% of global GDP so common rules and standards, whether around consumer protection or data flows, offer a real opportunity.
From a UK perspective, we were pleased to welcome Liz Truss, International Trade Secretary, to the B7 to hear the wide-ranging trade priorities of the international business community. DIT has led the trade track of the G7 and has set high levels of ambition. With alignment in many areas between the B7 and the UK government’s objectives, it is clear that now is the moment to build a partnership between business and government to resolve international challenges and leave protectionism in the past. The UK hands the G7 baton to Germany for 2022, and at the CBI, we’ll be working with our German counterparts, BDI, so that momentum is not lost.
The last 14 months or so have been unprecedented. What’s required now is a G7 statement of intent to solve the immediate crisis and build a decade of cooperation and change. There’s a clear roadmap to COP26 and MC12 this year and business stands ready to support real progress.