Opinion

Buenos Aires summit is a good place to start fighting back against destructive unilateralism

Ten years after the G20 proved its effectiveness in dealing with the global financial crisis, it needs to step up its efforts to overcome a political crisis, fuelled by destructive unilateralism, that threatens international governance on trade, investment and tax.

By: , , , , , , , and Date: November 28, 2018 Topic: Finance & Financial Regulation

This opinion has been originally published by the Financial Times

Zhang Jun, China’s G20 sherpa and assistant foreign minister, makes a strong plea to resist protectionism, safeguard the World Trade Organization and fight inequality (“ Our common prosperity demands co-operation on trade”, November 26).

Ten years after the G20 proved its effectiveness in dealing with the global financial crisis, it needs to step up its efforts to overcome a political crisis, fuelled by destructive unilateralism, that threatens international governance on trade, investment and tax.

Against this background, as members of the T20 Task Force on Trade, Investment and Tax Cooperation, we propose that the G20 take initiatives in three key areas. First, on trade, the G20 should back up its call for modernising the WTO with concrete proposals. Strengthening the WTO’s rulemaking capacity on digital trade taking into account the digital divide would be a good start.

There is dire need for the G20 to reform its monitoring of protectionism, taking into account new trade distortions such as export incentives. As trade liberalisation — and protectionism — can lead to disruptions, the G20 should support a fairer globalisation by speaking out for gradualism, supported by general safety nets and increased workforce mobility.

Second, building on the progress of the Base Erosion and Profit Shifting (BEPS) project, the G20 should curtail harmful tax competition. Increasing transparency on tax incentives granted by G20 countries would be an important first step.

The G20 should also deliver on its long overdue promise to phase out tax incentives for fossil fuels. A joint framework for taxing the digital economy should receive high priority.

Third, the G20 needs to pay attention to the mounting challenges of the international investment regime which is experiencing a legitimacy crisis. The G20 should resume its work on international investment policy reform and investment facilitation during the Japanese G20 presidency in 2019. We realise that these proposals require actions beyond the Buenos Aires summit. Still, it is up to the G20 to take the lead in advancing these reforms. Otherwise, we should stop referring to the G20 as the premier forum for international economic co-operation.

 


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read article Download PDF More on this topic
 

External Publication

Diversification and the world trading system

Diversification is important because it is associated with economic growth and reduced volatility.

By: Uri Dadush, Niclas Poitiers, Abdelaaziz Ait Ali, Mohammed Al Doghan, Muhammad Bhatti, Carlos Braga and Anabel González Topic: Global Economics & Governance Date: September 16, 2020
Read article More on this topic
 

Blog Post

Debt relief for Sub-Saharan Africa: what now?

When G20 finance heads meet on 18 July, Europe will again need to lead on the group’s flagship COVID-19 initiative to postpone low-income countries’ debt service payments. For the first time, China has agreed to participate as an official creditor alongside members of the Paris Club. However, continuing lack of clarity on which Chinese creditors will participate, coupled with resistance from private sector creditors to voluntary participation, suggest that actual relief will be much less than originally planned.

By: Suman Bery, Sybrand Brekelmans and Alicia García-Herrero Topic: Global Economics & Governance Date: July 14, 2020
Read article More on this topic More by this author
 

Podcast

Podcast

COVID-19’s shock for emerging economies

COVID-19 is by far the biggest challenge policymakers in emerging economies have had to deal with in recent history.

By: The Sound of Economics Topic: Global Economics & Governance Date: May 29, 2020
Read article More on this topic More by this author
 

Opinion

From G7 to G20: passing three hot potatoes

Yesterday’s G7 video-conference ended in silence. It wasn’t even possible for the group to issue a joint statement after the US administration's push to enter into a blame game over the Covid-19 label. However, let’s not give up. There is one more chance today for global coordination: the G20 emergency video-conference hosted by Saudi Arabia. This is the opportunity for the G20 to stand out and overshadow the G7 and for the world to end up with some international policy coordination. The key issues continue to be dollar liquidity, excessive dollar appreciation and plummeting oil prices.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: March 26, 2020
Read about event More on this topic
 

Past Event

Past Event

CANCELLED: India-EU Partnership: New Vistas for the Next Decade

Policymakers, academics and private sector actors from the EU and India come together to work on common issues and explore further areas of cooperation.

Speakers: Yamini Aiyar, Suman Bery, Navroz K Dubash, Alicia García-Herrero, Rajat Kathuria, Partha Mukhopadhyay, Ananth Padmanabhan, Georgios Petropoulos, André Sapir, Shyam Saran, Simone Tagliapietra and Marc Vanheukelen Topic: Global Economics & Governance Location: India International Centre, Lodhi Gardens, Lodhi Estate, New Delhi, Delhi, India Date: March 12, 2020
Read article More on this topic More by this author
 

Opinion

China’s view of the trade war has changed—and so has its strategy

The truce agreed on by China and the United States at the sidelines of the recent G-20 meeting in Buenos Aires doesn’t really change the picture of the U.S.’s ultimate goal of containing China. The reason is straightforward: The U.S. and China have become strategic competitors and will continue to be so for the foreseeable future, which leaves little room for any long-term settlement of disputes.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: December 19, 2018
Read article More by this author
 

Opinion

The world deserves a more effective G20

As the presidency shifts from Argentina to Japan at Buenos Aires (and then to Saudi Arabia) it is worth asking why the G20 has endured this long and what it needs to remain relevant in a dramatically changed world.

By: Suman Bery Topic: Finance & Financial Regulation, Global Economics & Governance Date: November 29, 2018
Read article More on this topic More by this author
 

Podcast

Podcast

Deep Focus: The G20 in a changing world order

In this episode of Deep Focus, Bruegel fellow Suman Bery joins Sean Gibson to elaborate on his recent Policy Contribution on the G20's performance over the past decade, and the forum's future prospects.

By: The Sound of Economics Topic: Global Economics & Governance Date: November 20, 2018
Read article Download PDF More on this topic More by this author
 

Policy Contribution

The G20 turns ten: what’s past is prologue

This Policy Contribution assesses the performance of the G20 since its first summit held in November 2008 to understand what could lie ahead for the institution.

By: Suman Bery Topic: Global Economics & Governance Date: November 15, 2018
Read article More on this topic More by this author
 

Podcast

Podcast

Director’s Cut: How to reform and fortify the global financial system

Bruegel director Guntram Wolff is joined by Tharman Shanmugaratnam, deputy prime minister of Singapore and chair of the G20 Eminent Persons Group, and Jean Pisani-Ferry, mercator senior fellow at Bruegel, for a conversation about the growth and stability challenges facing the global financial system, and how the system can be better equipped to deal with the significant and novel problems of the future.

By: The Sound of Economics Topic: Global Economics & Governance Date: October 23, 2018
Read article Download PDF More on this topic More by this author
 

Policy Contribution

Should we give up on global governance?

The pervasive gridlock affecting the traditional global governance approach calls into question the idea of broadening its scope beyond its core remit, and it calls for alternatives, either as substitutes for obsolete arrangements or to address emerging collective action problems in new, inadequately covered fields.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: October 23, 2018
Read article More on this topic
 

Blog Post

The G7 is dead, long live the G7

The summit in Charlevoix left behind a Group of Seven in complete disarray. The authors think that the G-group, in its current formulation, no longer has a reason to exist, and it should be replaced with a more representative group of countries. In this fast-changing world, is the G7 only a relic of the past?

By: Jim O‘Neill and Alessio Terzi Topic: Global Economics & Governance Date: June 13, 2018
Load more posts