Under India’s G20 presidency, India will need to ensure that TIWG and DEWG are closely collaborating, since both the working groups have common objectives on digital supply chains
The statement of the G20 trade ministers in 2016 noted the importance of GVCs and Regional Value Chains (RVCs) in driving world trade. That statement committed the G20 members to develop and implement initiatives that would promote infrastructure investment and greater supply chain connectivity. The logic here is that greater GVC integration will mean better integration for SMEs. This recommendation also made its way into the 2016 Leaders Communique which also endorsed the G20 Strategy for Global Trade Growth (SGTG). The SGTG sets the goals for ‘mutually reinforcing’ trade and investment policy to create sustainable and inclusive GVCs. While the goals are commendable, the ‘how’ question remains unanswered, both in the strategy and successive ministerial statements. The Saudi Arabian Presidency in 2020 was necessarily focused on trade recovery to alleviate COVID disruptions. The 2021 Italian presidency saw the conversation go one step forward with a focus on securing health supply chains as a response to the pandemic while reiterating the need to enable MSMEs to upgrade the use of technology to enable them to participate in GVCs. The non-binding MSMEs Policy Toolkit which was annexed to the Saudi Arabian Trade Communique needs a relook to upgrade some of these policies to binding action, especially when it comes to access to information and communication networks between MSMEs.
Over the past five years, some issues such as GVC integration have been a consistent concern for the G20. Other issues such as digital trade and the economy have become more mainstream recently.
Specifically, for the GVC question, given the recessionary tendencies emerging in the world’s largest economies and continued stress from COVID-related supply shocks, supply-chain resilience has become even more urgent. While GVCs and supply chains complement each other, they need equal and individual attention. Recessions directly impact supply chains due to their upward effect on the price of manufacturing. It is necessary to ensure supply chains remain at least marginally independent from the flux in the macroeconomic and fiscal policy space to minimise the impact of economic downturns on the production of essential commodities at the very least. In that case, India’s G20 will, thus, need to make the conversation around GVCs more nuanced and make a clear distinction between the value chain and supply chain discussion. On the digital front, the urgent question is going to be finding some common ground on the question of data flows. Niti Aayog’s Digital Empowerment and Protection Architecture (DEPA) can play a role in finding this consensus as it creates an institutional framework which is scalable. A question that needs attention is the potential for duplication of work between the TIIWG and the DEWG: What are the ways to ensure that the DEWG is discussing deliverables in line with the goals of the TIIWG? Should a joint task force of the two working groups be considered? It is important that there is at least some cross-pollination of thoughts and ideas so that more efficient conclusions can be reached.
While on the GVC issues, India has been in sync with other G20 countries, it has had several reservations on issues of ‘data free flow with trust’.
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Jhanvi Tripathi is Coordinator for the Think20 India Secretariat and Associate Fellow with ORF’s Geoeconomics Studies Programme. Her research includes international trade policy issues — ...Read More +