ISTANBUL (TIP): An influential group of business leaders have urged the G20 to improve the global trade system for the emerging digital economy as well as focus on reforms to ensure strong and sustainable growth.
The group known as B20, met in Turkey on the sidelines of the G20 sherpas meeting and discussed the recommendations which would be finalised for the G20 leaders meeting in November. It called for eliminating data flow restrictions and softening regulations on data privacy to decrease the cost of doing business. It said customs regimes must be harmonized to ensure that bottlenecks to e-commerce are minimized and transactions are made more predictable.The G20 comprises the largest and emerging economies, which account for 85% of global GDP and 75% of world trade. It comprises the US, the UK, the European Union, India, Argentina, Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey.
“Harmonize customer protection rules, specifically on core issues relating to purchase processes, to better facilitate e-commerce efforts and eliminate costs and administrative difficulties,” it said in its draft recommendations.
According to estimates, the digital economy is expected to contribute $4.2 trillion or more than 5% of GDP for the G20 countries in 2016 and is growing at 10% annually. Cross border e-commerce accounts for 10-15% of total e-commerce volumes, depending on the region. By 2025, annual global cross-border e-commerce revenues could swell to between $250 billion and $350 billion-up from about $80 billion now, according to Mckinsey Global Institute and BCG analysis. The B20 has six task forces on infrastructure and investment, trade, financing and growth, anti-corruption, employment and small and medium enterprises and entrepreneurship. Each of the task forces made specific recommendations to improve business prospects within the G20, which would help lift GDP growth.
It called for reaffirming the commitment to rollback of existing protectionist measures, particularly non-tariff barriers and said the G20 must start taking distinct actions by eliminating localization barriers to trade as a first step. Numerous reports show that G20 governments are not adhering to their standstill and roll back commitments with regards to regular tariff barriers, the B20 said.
“Non-tariff barriers can have a much greater negative impact on GDP growth than tariffs. The benefits of reversing all barriers introduced between 2008 and 2013 is at least $460 billion increase in global exports, a $423 billion increase in global GDP and 9 million jobs supported worldwide,” it said. The B20 strongly backed the creation of an enabling environment for increased flow of private funds into more sustainable infrastructure. It said there is a need to increase the number of projects developed through public-private partnerships (PPPs) and build capabilities of governments to deliver PPPs.