Reducing commercial friction and investment uncertainty are among the measures that can boost global trade as well as help reintegrate the world's "spaghetti bowl" of regional free trade and investment agreements, says a report.
Reducing commercial friction and investment uncertainty are among the measures that can boost global trade as well as help reintegrate the world’s “spaghetti bowl” of regional free trade and investment agreements, says a report.
Released today, the report prepared by the World Economic Forum (WEF) and International Centre for Trade and Sustainable Development, has suggested a set of reforms to international trade as well as investment rules and institutions.
While RTAs (Regional Trade Agreements) have freed trade and deepened economic integration around the world, the report said they have also created some challenges.
“Among these are concerns about preference erosion affecting especially developing economies, challenges faced by smaller businesses to meet demanding RTA standards and rules of origin, and the ‘spaghetti bowl’ problem -â€” the high complexity of overlapping rules and agreements facing companies that operate global supply chains across multiple RTAs,” it noted.
Boosting global growth and employment, reducing commercial friction and investment uncertainty, ensuring food security, combating climate change and environmental degradation, are among the measures suggested to strengthen global trade.
Other steps proposed include accelerating sustainable development in least-developed countries, increasing economic diversification and competitiveness in middle-income countries and preserving national policy space to make societal choices.
According to the report, the measures can create a pathway for better aligning and eventually reintegrating the world’s “spaghetti bowl” of regional free trade and investment agreements.
The report of the E15 Initiative, Strengthening the Global Trade and Investment System in the 21st Century, has also suggested structural improvements at the World Trade Organisation (WTO).
There are proposals for the evolution of not only trade law and institutions but also trade-related aspects of international development, financial, environmental, agricultural, labour and technological cooperation over the next decade to 2025.
These come on the heels of the WTO ministerial in Nairobi last December where governments failed to reach an agreement on a continuation of the Doha Round of trade negotiations in its current configuration.
Over two years, WEF and ICTSD facilitated an extraordinary multistakeholder and multidisciplinary process that engaged 375 experts in partnership with 16 other institutions.
Citing the report, Richard Samans, Member of the Managing Board of WEF, said that just because the world was not able to agree to the particular multilateral agenda on the table in the Doha Round, does not mean that a common undertaking that leaves every major constituency and region better off is not possible.