South-South collaboration can strengthen the foundation of future trade: Shri Goyal

The Global South needs to discuss ways and means for countries to cooperate and act together to make our supply chains open, secure, trusted, stable, and equitable, thereby making them more resilient. Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal was speaking at the 2^nd Voice of Global South Summit.

Shri Goyal said that the crisis of COVID-19 pandemic, impact of climate change and raging geopolitical tensions have disrupted and underscored the fragility of global supply chains. These disruptions have created monumental challenges of food and energy security, cost of living and achievement of the Sustainable Development Goals. He said that Prime Minister Shri Narendra Modi has rightly pointed out that most of the global challenges have not been created by the Global South, but they affect us more. Prime Minister has further underscored the need for our collective voice to be heard whenever and wherever the world looks for solutions, he added.

Shri Goyal pointed out that India successfully hosted the G 20 Summit in New Delhi in September, under the theme “one earth, one family and one future” with the support of the Global South. During its presidency, India made strong interventions in strengthening the voice of the global south including by making the African Union a permanent member of the grouping and by galvanising concrete action oriented, G 20 outcomes for the Global South, he said, adding that the African Union will now be a part of the G 20 permanently. It is necessary to make further efforts to strengthen the voice of the global south and to come together for our and humanity's future, he said.

During India's G 20 presidency, the G20 generic framework for mapping global value chains was adopted to make GVCS resilient and inclusive, Shri Goyal said, adding that this framework has been prepared, keeping in mind how countries of the global south could not only become an integral part of was GVCS, but also move up the value chain to generate more prosperity for the people. The framework promotes transparency and confidence amongst all stakeholders, as well as allows anticipation and estimation of potential risks embedded within value chains, he said. He pointed out that the key building blocks of the framework are data analysis and representation. By incorporating this building blocks, the framework can help in the identification of sectors and products critical to GVC resilience for each of the countries. He urged the participating countries to adopt this mapping framework as they undertake an exercise to assess their abilities and their GVCS both at the sector and product level as well as identify opportunities that will open up, he said, adding that this framework, once implemented, has the potential to address four key concerns related to resilience and inclusivity.

With respect to the global South, the first need is to identify global value chains, where each of the countries could focus on not only increasing their participation, but also improving the quality of their participation by moving up the value chain, Shri Goyal remarked. This will help them to partake, largest share of high value added parts of the GVCS. Secondly, he said, it will help GVCS to withstand both natural and manmade shocks. Thirdly, better integration of our micro small and medium enterprises in international markets and trade. Finally, it will help us to visualise gaps in our logistics infrastructure. The filling up of these critical gaps would help further integration and participation of the global south in global trade, he said, adding that if we work together on this, we could accelerate transformative impact that solves our trade can have in the overall growth and prosperity and also specifically on achieving sustainable development goals. For example, the phenomenal nine-fold increase in South-South trade from 600 billion US dollars in 1995 to 5.3 trillion US dollars in 2021 had a major impact on economic growth and resilience of many countries.

Shri Goyal said that during the Indian presidency, the G 20 has also recognised the importance of the WTO as aid for trade initiative for enabling developing countries, notably less developed countries to effectively participate in global trade, including through enhanced local value creation. Due to sustained efforts, the G 20 also called upon enhanced mobilisation of necessary resources. In this regard, we get the support of all our dear friends from the global south will keep pursuing this and the WTO for effective implementation, he added.

Shri Goyal pointed out that the G 20 under India's presidency has brought the G 20 framework for systems of digital public infrastructure. This recognises the role of DPIs in the delivery of services at the societal level for the people directly. We are also pursuing use of modern technology for enhancing fair and equitable global trade, Commerce and Industry Minister said. He said that the New Delhi leaders’ declaration focuses on two aspects: first, realising the importance of MSMEs and the role they play in our economies. We have identified access to trade related information and access to market as the major challenges faced by our countries in our efforts to internationalise our economy. Due to inadequate access to information MSMEs often are unable to identify potential markets, he said, adding that they have limited knowledge about business opportunities, customers, competitors, distribution procedures, local rules and regulations and taxation. As a result, they are unable to exploit market opportunities that require large volumes, consistent quality, homogeneous standards and regular supply. Under the Indian G 20 presidency, a Jaipur call for action to enhance the MSMEs access to information has been adopted in the envisages upgradation of international trade centres. Shri Goyal said that global trade helped us the portal, which will work as a one stop hub for MSMEs seeking business and trade related information. He urged all participating countries to partner in this initiative to better integrate their MSMEs in global trade.

Continuing with the achievements of recent G20 Summit in New Delhi, Shri Goyal said that it focused on trade cost reductions by increasing digitalization of trade documents. It is seen that irrespective of digitalization of documents for domestic purposes, documents critical for international trade are still not digitalized, as much implementation of electronic bill of lading, a vital document, for enabling smoother international trade can itself lead to savings of nearly six and a half billion dollars in direct costs, he said. In this regard, the G 20 has adopted 10 high level principles for digitalization of trade documents. These principles laid the roadmap for eventual transition and adoption of a widespread paperless trading system globally. This can sustainably benefit all of the developing countries by reducing the cost of doing trade, he said.

Shri Goyal pointed out that we are in the midst of a massive global shift in the way work is being done and how it will be done in the future. The future of work will be determined by industry 4.0, energy transition and New Age technologies, he said. These are bringing changes at the world workplace and workforce level. He added that we have built a consensus on how this challenge is handled in an inclusive and equitable manner to ensure the same it is important that countries of the global south collaborate in technical education, research and development, deployment of technology and related services. This South-South collaboration can strengthen the foundation of future trade, including in technology and services. As the name of the summit emphasises it is the time for countries of the global south to build partnerships based on trust and mutual respect, leveraging each other's strengths and capabilities, Shri Goyal concluded.

Global value chain resilience urged to boost participation, digitalise trade documents and integrate MSMEs into international markets. The address urges collective action to make supply chains open, secure, trusted and resilient, promoting the Global Value Chain mapping framework from India's G20 presidency to identify critical sectors and logistics gaps, raise participation and value addition in GVCs, and integrate MSMEs. It calls for G20 and WTO-supported aid-for-trade resource mobilisation, adoption of Digital Public Infrastructure and a one-stop global trade portal for MSME market access, and endorsement of ten principles for digitalising trade documents to enable a paperless trading system and lower trade costs.