Need to Revisit the Globe Trade Regime to Benefit the Asian Continent says Dr. Singh

“The Asian economy has much to offer to the globe. The Asian continent has a demographic advantage being home to a young, skilled and productive work force. Secondly, the continent boosts of a pool of natural resources which needs to be tapped to give impetus to its manufacturing. Thirdly, technical expertise required for any manufacturing or service industries are intrinsic in the Asian continent. The combination of a demographic base coupled with access to natural resources and technological expertise inherent in Asia makes it the centre piece of the globe. However, the Asian developmental model lacks access to quality infrastructure, education and health. The answer to its shortcomings lies in global integration by encouraging international trade and investment. However, trade protectionist policies of major economies of the continent possess trade barriers. There is a pressing need to revisit the global trade regime to create equal opportunities for all economies to benefit from global trade and growth”, said General (Retd) Dr. Vijay Kumar Singh, Minister of State for External Affairs, Ministry of External Affairs and Minister of State (Independent Charge), Ministry of Development of North Eastern Region, Government of India during the inauguration ceremony of the 4th edition of the Global Economic Summit on the theme “Asia: Powering Global Markets” jointly organised by MVIRDC World Trade Centre and All India Association of Industries. The Summit shall facilitate guidelines and policy frameworks for Asia to grow and prosper as a continent, Dr. Singh said.

Outlining the path for the Indian economy, Dr. Singh said that India is gradually picking up from its sluggish growth prospects witnessed recently. It is of paramount importance to note that manufacturing sector is the strength of any economy which needs to be revived. The Government of India needs to revive its manufacturing sector through government intervention, incentives, subsidies, tax holidays and availability of funds. Secondly, India needs to raise its agricultural productivity. Self sufficiency in agriculture ensures food security for all besides being a support base for the manufacturing industry. Also, the progress of the service sector is a barometer of growth for the Indian economy.

 The XV World Trade Point Federation General Assembly is being jointly held with the Summit.  Mr. Bruno Masier, President, World Trade Point Federation (WTPF) said that the main objective of the WTPF lies in giving impetus to international trade and facilitating the growth of global trade network. SMEs form the focus sector of the WTPF thereby encouraging their participation in international trade. India has been an active member of the WTPF demonstrating a strong relation of friendship and trust. There are two WTPF trade points in India – at Mumbai and Bangalore. We seek to deepen our relation with India in the future.

 Mr. Ghazi Abu  Nahl, Chairman, World Trade Centers Association (WTCA) and Chairman, World Trade Center Holdings (Cyprus) Ltd congratulated WTC Mumbai and AIAI for organizing the prestigious Summit. The Summit presents a platform for sharing learning lessons besides formulating business strategies in the context of the day’s challenging macroeconomic environment. WTC Mumbai is one of the prominent members of the WTCA which comprises of 330 WTCs across 100 countries. It is a matter of pride to note that there are 20 WTCs in India serving the business community.

Dr. Talal Abu-Ghazaleh, Founder and Chair, Talal Abu-Ghazaleh Organization(TAG-Org) said that with the advent of globalisation products and services cannot be said to be “made in a country” rather “made in the world” with Asia forming a prominent player in today’s powering and changing global markets.  The recent times have seen the growth of Information and communication technology (ICT), Intellectual Property Rights (IPR) and the Internet. The Internet has provided complete democracy to the world where “everybody is equal.” However, the need of the hour is to formulate global internet governance.

Dr. Ghazaleh informed the audience of the Ghazaleh IPR company which is a completely internet based company operating from 81 offices world over. Also, the Talal Abu-Ghazaleh Organization serves as an international education and professional service provider.

Mr. Jean-Luc Schneider, Deputy Director, Economics Department, The Organisation for Economic Co-operation and Development (OECD) enumerated on the OECD exercise of “How the world will look like in 2060?” The OECD forecasts global trade and growth to shrink to 2.5% from the current 3.5%. By the year 2060, the global trade intensity is expected to rise with share of trade in GDP rising to nearly 60%. As of date, 85% of global trade share comprises of OECD countries. However, by 2060 global trade is expected to shift to the Asian economies. As for the qualitative changes in global trade, the manufacturing base is expected to shift to China and India. While China will be a prominent electronic goods exporter; India shall export business services. Also, the world shall witness enhancement in quality education and efficiency.  However, difference in education and efficiency across regions may trigger wage inequalities. The year 2060 will create a thriving need for “international distribution policy” and “international cooperation on taxation” due to counterproductive laws, global value chains and cross country spill over’s of trade issues. The paradox of globalisation is that there will be increased international cooperation with national policies being less effective in the global world. However, global integration is expected to give way to conflict of interests amongst nations, free riding on trade agreements, international collusion, etc.

Mr. Yonov Frederick Agah, Deputy Director-General, World Trade Organization (WTO) said that WTO and WTC share a common good of achieving prosperity through trade. From the year 2000 to 2008 global trade has grown at an average rate of 6%. However, it witnessed a decline during the economic crisis of 2008 to recover in the year 2011 with Asia being an important partner of global trade. The role of the WTO is international trade lies in keeping protectionism under check, improving global business environment, increasing trade stability and disciplining non tariff barriers.

Touching upon the trade facilitation agreement Mr. Agah said that with the passage of the agreement it will be faster and cheaper to do cross country business. The cross country business may touch US$ 1 trillion creating 25 million jobs. The agreement is expected to cut trade costs by 10% to 15%. It shall ensure better participation of developing countries in global trade. Although the agreement has not reached fruition, India has signaled its compliance in making the agreement a success. The agreement has been wrongly perceived as a bottleneck in growth which actually has many economic benefits to offer. Asia is an important participant and a prominent beneficiary in the agreement.

Mr. Yaduvendra Mathur, Chairman and Managing Director, Export-Import Bank of India said that the Asian economies have witnessed growth in recent times. However, the continent suffers from inadequate infrastructure. The GDP growth of Asia has been constrained by 4% due to lack of infrastructure. Secondly, Mr. Mathur noted the need for enhancing intra-SAARC trade. According to a study by UNESCAP trade costs in the South Asian region is higher than other regions of the world which needs to be addressed. Also, the financing of international trade has been threatened by the BASEL 3 norms which may reduce availability of capital towards trade. It is vital that export credit agencies such as EXIM bank focus on intra regional trade.

Earlier, in his welcome remarks Mr. Kamal Morarka, Chairman, MVIRDC World Trade Centre said that the Indian economy is gradually looking upon from its decadal low growth. The new Government has revived sentiments in growth, industry and trade. The country is expected to witness exponential growth in international trade in the years to come. 

Further, Mr. Morarka said that the GES is a flagship event of WTC Mumbai and AIAI. The summit has witnessed participation from over 500 delegates comprising of 100 overseas delegates from across 40 countries. He encouraged the audience to benefit from the deliberations and discussions of the three day summit.

The Summit Handbook on “Asia: Powering Global Markets” and the Export-Import Bank of India’s Research Study titled “Potential for Enhancing Intra-SAARC Trade: A Brief Analysis” were released during the summit. 

Mr. Vijay Kalantri, Vice Chairman, World Trade Centre Mumbai and President, All India Association of Industries while proposing the vote of thanks said Asia is the next power house. The Asian economies together encompass growing share of manufacturing, international trade and service industry. The MSME sector of the continent is the backbone of the economy. However, its infrastructural status is its key drawback. We need to create a conducive business environment to boost the region.