Rising food, fuel and fertiliser inflation may figure in the G20 Leadership deliberations next month
G20 members may discuss creating a fair trade regime to address rising food, fuel, and fertilizer prices at the Leadership Summit in New Delhi next month.
New Delhi/Jaipur
Some G20 members may push for creating a free, fair, inclusive and equitable trade and investment regime amid growing concerns over rising food, fuel and fertiliser prices due to supply disruptions and export curbs, three people aware of the development said adding that it could be one of the key issues at the Leadership Summit held in New Delhi next month.
High global inflation has hit hard, particularly in vulnerable and least developed countries (LDCs), and it is therefore a major global concern that needs attention of the G20, which represents around 85% of global GDP, over 75% of global trade and about two-thirds of the world’s population, they said, requesting anonymity.
Deliberations on this matter may also take place at the G20 Trade and Investment Ministerial Meeting (TIMM) in Jaipur on Thursday and Friday, and the issue is expected to find a place in the final ‘Leaders’ Declaration’ in New Delhi next month, two of them said.
The G20 Leaders’ Summit is scheduled on September 9-10 in New Delhi, where a G20 Leaders’ Declaration will be adopted. The declaration states the leaders’ commitment towards the priorities discussed and agreed upon during the respective ministerial and working group meetings.
‘Multilateral Trade for Global Growth & Prosperity’ and ‘Inclusive & Resilient Trade’ are topics of the two key sessions on the first day of TIMM at Jaipur on Thursday. Most of the G20 delegates arrived on Wednesday. The two-day G20 TIMM was preceded by the fourth and last Trade and Investment Working Group (TIWG) meeting of senior officials on August 21 and 22 in Jaipur.
“Some participants are of view that there must not be imposition of export prohibitions arbitrarily, or deliberate restrictions on trade of food and fertilisers. They said the established multilateral rules must be followed by all G20 countries on the matter of trade of food items,” one of the people said.
While the World Trade Organisation (WTO) is the right institution to discuss this issue and promote rules-based global trade, there is an urgent need to reform the multilateral trade body, a second person said. “WTO reform is also part of the agenda of TIMM, aiming to achieve non-discriminatory, fair, open, inclusive, equitable, sustainable and transparent multilateral trading system,” this person added.
Citing the WTO Trade Monitoring Report on G20 trade measures, released on July 4, he said several factors such as the prolonged war in Ukraine, after-effects of the Covid-19 pandemic, vagaries of weather and high food and energy prices continue to cause uncertainty in global trade.
The 29th WTO report on G20 trade measures said export restrictions “continued to grab headlines” even as the pace of introduction of such measures slowed and several were rolled back. Globally, as of mid-May 2023, 63 export restrictions on food, feed and fertilisers were still in place (down from 101 imposed since the beginning of the Ukraine war), in addition to 21 Covid-19-related export restrictions, it said.
“The overall findings of this Report, as further detailed in the Specific Findings below, reveal that between mid-October 2022 and mid-May 2023, G20 economies introduced more trade-facilitating (77) than trade-restrictive (41) measures on goods, unrelated to the pandemic, most of which were import measures,” the report said. In the area of services, 34 new trade facilitating measures were introduced by G20 economies, mostly facilitating trade, it added.
Citing the report, WTO director-general Ngozi Okonjo-Iweala said on July 4: “It is welcome that G20 economies have been taking more steps to facilitate imports, underscoring how trade is a tool to push back against inflationary pressures. I call on them to show leadership by continuing to reduce the number and trade coverage of export restrictions, particularly on food, feed and fertilizers, to help dampen the price volatility that makes life harder for people around the world.”
According to WTO, world merchandise trade volume growth is expected to slow from 2.7% in 2022 to a subpar 1.7% in 2023, before picking up to 3.2% in 2024, barring new downside surprises. Ngozi Okonjo-Iweala is expected to address the TIMM on Thursday.