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G-20 Trade & Investment Promotion Summit Highlights Global Value Chains

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G20Leaders of trade and investment promotion agencies from around the world converged on Mexico City November 5-6, 2012 to hammer out strategies for cooperation that will help drive a global economic recovery.  Representatives of G-20 member countries, multilateral organizations and leading businesses joined in the event activities, which took place at the Four Seasons hotel over the course of two and a half days.  In all, 22 agencies from 18 countries took part in the meetings, according to event organizers.

The G-20 Trade & Investment Promotion Summit (TIPS) was held as part of a series of follow-up events to the summit of heads of government of G-20 member countries organized in Los Cabos, Mexico, in June of this year.  The G-20 is an organization composed of 20 leading developed and emerging economies, including that of the European Union.  The group was launched in 1999 as a forum for consultation and cooperation by finance and banking officials on policy matters affecting international economic stability.  The presidency or chair of the G-20 rotates annually. Mexico, as chair for 2012, hosted the Los Cabos meeting of heads of state and took the lead in organizing subsequent events to pursue the group’s agenda to promote healthy economic growth.  Mexico’s own investment and trade promotion agency, ProMéxico, acted as host and facilitator during the activities of the November summit.

The formal activities of the TIPS opened with an inauguration and plenary session featuring presentations on key topics to be addressed during the meetings.  This session was followed by two days of roundtable work meetings and presentations in a format designed to maximize exchange of ideas and experiences among the participants.  Specific themes of roundtable sessions included:

  1.     Building synergies between trade and investment
  2.     Exploring company internationalization
  3.     Peer learning in trade and investment promotion

In addition to the working roundtables, presentations during plenary sessions featured topics such as the emergence of global value chains, the value of joint trade and investment promotion and benchmarking for trade promotion, among others.  The roundtables and plenary sessions were led by representatives and specialists from multilateral organizations such as the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD) and the Organization for Economic Cooperation and Development (OECD), as well as from country agencies such as UK Trade and Investment (UKTI), the Australian Trade Commission (Austrade) and the Instituto Español de Comercio Exterior (ICEX).

Within the context of the overall themes of cooperation and the importance of facilitating trade and investment, a number of topics received particular emphasis at the meetings.  Among the most cited was the growing importance of global value chains (GVCs) in shaping the environment for modern international business.  As defined in the event program, GVCs mean that goods and services cross borders multiple times before reaching consumers in their destination market.  WTO Chief of Staff Arancha González commented extensively on this topic in her opening remarks, referring to the concept of “trade in tasks” as opposed to trade merely in finished goods.  As manufacturing production chains have become ever more globalized in recent years, for example, more and more products are incorporating materials and value-added processes provided in multiple countries over the course of the production process.  This evolution is creating products and services that González called “made in the world,” rather than the conventional notion of goods made in one country for export to another.

The rise of GVCs has important implications for numerous areas of both national and international trade policy.  Among these, as the WTO’s González emphasized, is the increasingly counterproductive nature of protectionist trade and investment policies conceived in a prior industrial era.  In the context of GVCs, attempts to “protect” a particular domestic industry may result in inhibiting the importation of goods or components requiring locally provided added value, or investment in production or service infrastructure that would generate local jobs and technology transfer.  As OECD Chief of Staff Gabriela Ramos added in her concluding comments, in the context of GVCs, it is important to relinquish the simplistic idea that imports are the enemy and exports are the friend, as now all may be equally necessary to a country’s healthy economic growth.  Speakers remarked that improving the quality of factors such as education and training, social safety nets, infrastructure and environmental protection is key to the success of GVCs, and as such the global production chains optimally will serve to boost these aspects locally.

Throughout the sessions, particular attention was given to the role of small and medium enterprises (SMEs) and the need to incorporate them into GVCs.  The WTO’s González urged the assembled promotion agency representatives to help provide SMEs with quick and accurate information to support their internationalization efforts, and UNCTAD Investment and Enterprise Director James Zhan called on multilateral agencies to boost capacity building among SMEs to help incorporate them into the supply chains of multinational corporations.

At the conclusion of the intense two days of meetings, participants expressed enthusiasm for the potential advances that could be achieved by the commitments to cooperation and best practices discussed.  In his concluding remarks, Pro Mexico’s Carlos Guzmán presented the following challenges to trade and investment promotion agencies going forward:

  1.     Increase coordination of trade promotion activities with those of investment
  2.     Compensate for resource limitations by increasing collaboration among agencies
  3.     Integrate SMEs into global value chains
  4.     Include input from the private sector into trade and investment policy planning
  5.     Create support networks to link promotion agencies
  6. [readon1 url="http://www.vallartatoday.com"]Source:www.vallartatoday.com - Translation by Suyapa Ajuria Nov. 13, 2012[/readon1]