SHANGHAI • The world's top 20 economies will work to boost sluggish global trade despite growing protectionism, overcapacity concerns and uncertainty over Brexit, G-20 trade ministers said at a meeting in Shanghai yesterday.
"The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth. Downside risks and vulnerabilities persist," the ministers said in a joint statement, adding that trade should remain "an important engine" to spur global growth.
The Group of 20 nations, which account for 85 per cent of global trade, admitted that protectionism has been rising since the financial crisis, and said that new trade restrictions in the group had reached the highest monthly average registered since the World Trade Organisation (WTO) began monitoring in 2009.
"We note with concern that despite the G-20's repeated pledge, the stock of restrictive measures affecting trade in goods and services has continued to rise," they said.
The ministers projected a 10 per cent to 15 per cent drop in cross- border investment this year.
The ministers also pledged to oppose trade protectionism and reiterated a promise not to add new protective measures until 2018.
Concerns over China's production overcapacity in steel have led to trade disputes with the European Union and United States, and China's Vice-Commerce Minister Wang Shouwen said the G-20 economies "have realised the necessity to take global cooperation to handle the challenge caused by production overcapacity".
Ahead of the meeting, WTO chief economist Robert Koopman had warned that restrictive measures could affect industries including air freight cargo, sea- based cargo, vehicle sales and production, electronics trade, and agricultural raw materials.
Global trade is expected to grow at a tepid 2.8 per cent this year, the WTO said in April.
And this year is expected to be the fifth in a row where trade grew at less than 3 per cent - its weakest sustained level in 30 years, WTO director-general Roberto Azevedo said last Friday ahead of the talks.
To combat the global slowdown, the ministers said they agreed to improve global trade governance and to work towards easing and liberalising trade.
Concerns over China's production overcapacity in steel have led to trade disputes with the European Union and United States, and China's Vice-Commerce Minister Wang Shouwen yesterday said the G-20 economies "have realised the necessity to take global cooperation to handle the challenge caused by production overcapacity".
But despite claims that China is dumping steel in foreign markets, he said "China's effort in (handling) overcapacity has been highly recognised" by the group.
"While some other countries are talking about how to cut down production, the Chinese government has already taken measures which have been effective."
And Britain's referendum vote to leave the EU has added new concerns for the recovery of global economic and trade growth.
Britain leaving the EU will "definitely have some impact on global trade, especially short-term investment", Mr Wang commented.
A G-20 workshop will study the potential impact, he added.
China hosts the G-20 this year for the first time since it became a summit-level forum.
AGENCE FRANCE-PRESSE, BLOOMBERG