Since the financial crisis in 2008, the global economic and trade outlook has yet to see clear signs of recovery, while fiscal and monetary policymaking has been increasingly hampered by harsh economic realities, WTO Deputy Director-General Yi Xiaozhun told Xinhua in a recent interview.
He explained that the debt problem has become a serious challenge faced by all countries, with de-leveraging and debt reduction becoming urgent targets for government policymakers.
Concerning monetary policy, many countries have implemented several rounds of quantitative easing, while interest rates have dropped to historic lows, he noted.
Some experts believe that if low and negative interest rates persist, this may have a negative impact in the future, perhaps even catalyzing future economic bubbles and financial crises.
While the fiscal and financial instruments have been exhausted, against the backdrop of this economic narrative that has permeated global trade discussions since 2008, Yi believed that great potential for cooperation still exists in trade and investment.
China, as host of the 11th G20 summit this year, made an important and justified decision, by putting the topic of trade and investment at the forefront of discussions in the meeting, Yi said.
On July 10, after the two-day G20 Trade Ministers Meeting in Shanghai, China’s Commerce Minister Gao Hucheng said: “The G20’s agenda have been gradually shifting from dealing with the aftermath of financial crisis to long term governance in recent years, with trade and investment emerging as another critical aspect along with financial and fiscal coordination.”
G20 economies agreed in the meeting to improve global trade governance to arrest the slowdown of global trade growth, and endorsed the G20 strategy for global trade growth.
“This is particularly important since G20 countries account for about 80 percent of global trade,” Yi explained.
He stressed that if leaders of the 20 states earnestly commit to discussions to strengthen cooperation in trade and investment in line with guidelines set out in the G20 strategy, efforts are sure to pay off in the long-term.
The official added that the strategy is characterized by operability, which once achieved will make the positive effects of global economic and trade growth tangible.
G20 economies also pledged to boost trade in services, which accounts for nearly a quarter of global trade, to enhance trade finance, which is particularly important for SMEs facing financing difficulties, he added.
Source: Xinhua/News Ghana