G20 summit gives chance to promote global economic governance: Italian analyst

ROME - The upcoming G20 summit to be held in China on Sept 4-5 would provide a good chance to improve global economic governance, an Italian analyst said.

"The G20 forum is a proper framework where to make decisions impacting on global economy," Alessia Amighini, senior associate researcher at the Italian Institute for International Political Studies (ISPI), told Xinhua in an interview.

"It has a lightweight and flexible structure, and not too much bureaucracy," she said.

The analyst added the Chinese presidency of the G20 has proved the summit's crucial role in terms of global governance.

"The Chinese presidency is lucid and clear-headed, as showed by its active role in the preparatory meetings, and by its tight cooperation with the previous G20 Turkish presidency and with its successor, Germany," she explained.

Amighini, an adjoint professor of International Economics at Catholic University in Milan, and assistant professor of Economics at the University of Eastern Piedmont, joined world experts who gathered at the Think 20 (T20) preparatory meeting for the G20 summit held in Beijing on July 29-30.

In her view, two specific factors were fostering positive expectations among experts."The first one is the establishment of the Working Group on Trade and Investment (WGTI), which was finally initiated by China after years of debate."

The second was the emphasis being given by G20 members so far on promoting e-commerce among various tools needed to bring new development and growth.

"The WGTI is important because trade and international investments have been the main engine of global growth from the early 2000s until the global recession, and the recent trade slowdown is the main cause of the weak global economy growth rate," Amighini explained.

Indeed, after a two-day meeting in Shanghai in early July, G20 trade ministers stressed that "global trade growth has slowed significantly since 2008, from an annual average of over 7 percent between 1990 and 2008, to less than 3 percent between 2009 and 2015. The 2015 marked the fourth consecutive year with global trade growth below 3 percent."

"Now, the (G20) goal is to find a new path to exit this situation and recover growth, which, however, does not mean returning to the growth rates prior to the crisis," the expert pointed out.

The growth registered before the financial crisis was in fact "drugged" by a proliferation of financial instruments that allowed housing bubble, according to the economist.

"That was not a healthy pattern at which to look. The 'new normal' that China has in its sight is a more realistic model of growth."

This was why the G20 Working Group on Trade and Investment would be so important.

"There were interesting cues from this perspective at the T20 meeting: we discussed how to get close to implementing the Trade Facilitation Agreement (TFA), for example, which would bring about a decrease in global trade costs."

The TFA was concluded by the World Trade Organization (WTO) in Dec 2013, but it will not enter into force before two-thirds of WTO members ratify it. The deal is expected to bring down total trade costs by 13 percent to 14 percent, according to the WTO.

Meanwhile, a new G20 debate on developing digital infrastructure provided "new insights," according to Amighini.

"Experts are looking hopefully to the discussions launched over promoting e-commerce at global level. Digital infrastructures are a common public good essential to further development," she said.

"It seems we are witnessing a 'third wave of globalization' on this regard in recent months, and this would be a pressing topic for those countries with geographical obstacles limiting trade," she added.

Creating a first group of countries enjoying a sort of "e-commerce beyond frontiers" would be the most relevant step forward, and might work as a driver for developing a new perspective of growth, according to the professor.

The analyst added the need of soft (digital) infrastructure would of course go along with that of hard infrastructures.