G20 Leaders' Summit
G20 Working Dinner on Trade
Remarks by Angel Gurría, Secretary-General, OECD
Brisbane, 15 November 2014
(As prepared for delivery)
Trade and investment are sluggish. We need to get them back to full speed while we continue to fight protectionism, promote the further opening of markets and implement the necessary structural reforms, all at the same time! We believe the Australian Presidency got it right to consider trade as an essential, stand-alone engine of the growth strategy, rather than simply a round of negotiations.
Our work on Global Value Chains (GVCs), on Trade in Value Added (TiVA), on trade facilitation and on Services have allowed us to literally “decode the trade genome” and develop policy insights that we are only starting to explore. The possibilities seem endless and the prospects most exciting. For the first time in history, we know what’s inside.
One of the big findings is that services matter. In trade, unilateral disarmament works: don’t raise barriers because you will shoot yourself in the foot. Services play a vital role in well-functioning global markets, accounting for 80% of employment, 75% of GDP, and 50% of value-added exports in emerging and advanced economies. Even modest reforms in the regulations that restrict the trade in services could increase exports by up to 7% and lower import prices by as much as 10%. We thus developed a matrix of 40 countries across 18 sectors, of the services industry, to show the way. More services sectors will soon be added to the matrix.
Facilitating trade and reducing unnecessary trade costs is another part of the answer. OECD analysis has found that fully implementing the Bali Trade Facilitation Agreement could reduce costs by up to 15% in some countries. Benefits are in trillions, not billions: We celebrate the news that it can now move forward following the latest round of talks.
The trade-related commitments in the National Growth Strategies account for 1/5th of the target to increase GDP by 2% by 2018. Another promising development is the progress achieved so far in the regional agreements currently under negotiation; the TTIP, the TPP, the Pacific Alliance in Latin America, the ASEAN 2015, some bilateral agreements and eventually the FTAAP. Let’s make sure, however, that we build them like a Lego – with interlocking modules that, in time, can become larger multilateral constructs.
Last but not least, let’s remember that trade policies can only work if supported by the right mix of labour markets, innovation, skills, competition, regulations and other structural reforms. Only then, will we be able to design, develop and deliver better trade policies for better lives.