'Trade policy cooperation and coordination
are more than ever of utmost importance to us'
Thesynergyonline Economics Bureau
Joint statement by Federal Chancellor Angela Merkel, IMF Managing Director Christine Lagarde, OECD Secretary-General Angel Gurría, ILO Director-General Guy Ryder, WTO Director-General Roberto Azevêdo, World Bank Group Chief Executive Officer Kristalina Georgieva and AfDB President Akinwumi Adesina on the occasion of their meeting in Berlin on 11 June 2018.
Our common approach of fostering international economic policy cooperation remains necessary to address global challenges, set new standards and improve the prospects for inclusive and sustainable growth. To this end, we remain committed to strengthening both institutional and informal links among national governments, international organizations and other stakeholders, including such fora as the G7 and G20.
The global conjuncture remains favorable. World growth rose to 3.8% in 2017. The IMF projects a slight pick-up in global growth to 3.9% in 2018-19. Among advanced economies, expansionary fiscal policy is expected to drive the US economy above full employment, while excess capacity in Euro Area economies is projected to narrow with support from accommodative monetary policy. Among emerging and developing economies, prospects are for continued strong growth in emerging Asia and Europe but are more subdued elsewhere. Inflationary pressures remain contained, despite the increase in commodity prices. Financial conditions are generally supportive, but with some signs of differentiation across countries. The WTO anticipates merchandise trade volume growth of 4.4% in 2018, although a continued escalation of trade restrictive policies could lead to a significantly lower number. The ILO expects the global unemployment rate to fall slightly to 5.5% in 2018.
Despite the favorable growth outlook, downside risks include a sudden tightening of financial conditions, stronger capital flow reversals, and an escalation of trade tensions hampering global economic integration. Credible strategies are needed in many economies to raise productivity and enhance inclusiveness, in some to secure debt sustainability, and in some others to address financial vulnerabilities. The current juncture provides an ideal opportunity for reforms to boost potential output and ensure that the benefits of growth are broadly shared, while building resilience against downside risks. We also note that the causes of global imbalances are complex and multifaceted, comprising macroeconomic, financial and trade aspects, and that multilateral cooperation remains crucial in that regard.
We welcome the ongoing cooperation between the IMF, the World Bank Group, the ILO, the OECD, the WTO and the AfDB, in a range of areas. We have common views on the following points:
Trade policy cooperation and coordination are more than ever of utmost importance to us. Increasing protectionist tendencies provide us with a clear incentive and opportunity to express our strong support for the multilateral trading system. International trade and open markets are necessary to spread growth impulses globally, to allow for global value chains to operate efficiently, and to create decent job and consumption opportunities on a broad scale. We will continue to work towards improving and strengthening the rules-based multilateral trading system and its role in global trade. The WTO is essential for new growth, employment and development opportunities on a global scale. It has greatly contributed to the stability and predictability of international trade relations, and continues to play a central role in the fight against protectionism. We should work further to strengthen the WTO to make it more effective in addressing the trade challenges of today. WTO members also need to engage with each other to preserve and reinforce the WTO Dispute Settlement function given its key role in ensuring fairness in global trade relations. Moreover, we appreciate ongoing efforts to conclude new bilateral and regional free trade agreements as other important tools to spur growth and job opportunities. We welcome progress made within the Global Forum on Steel Excess Capacities facilitated by the OECD and stress the urgency for participants to achieve a substantive outcome at its upcoming ministerial meeting. Concrete actions are urgently needed to address policies that distort international markets.
Digital technologies are a promising new trend giving rise to huge growth potential as well as challenges. The New Industrial Revolution (NIR) is already changing the scope, scale, speed and patterns of work, production, trade and investment, by transforming comparative advantages among countries and the traditional boundary between the physical and the digital world and between goods and services. Governments and international organisations are working on strategies to support a smooth transition of our economies so that everyone can benefit from technological innovations. We welcome the ongoing efforts by many countries in this regard. However, in order to harness the full potentials of digitization, we need to develop coherent and forward-looking policies that support inclusive innovation-driven growth, including quality education, youth employment, social inclusion, gender equality, transition to formal employment, and access to digital infrastructure. The OECD Framework for Inclusive Growth and its "Going Digital" initiative can provide important policy advice for governments in that respect. We will continue our work for a globally fair, modern, and transparent international tax system and support the ongoing OECD work in the context of the G20/OECD BEPS project on addressing the impact of digitalisation on the international tax system.
With ongoing globalization and the impact of new technological changes, it remains our goal to promote decent work and quality jobs worldwide. Thus, we fully support the UN 2030 Agenda for Sustainable Development and the herein incorporated decent work agenda of the ILO. We also support the national implementation of the UN Guiding Principles on Business and Human Rights and the further strengthening implementation of the OECD Guidelines for Multinational Enterprises and ILO Multinationals Declaration, to achieve a better application of international labour and social standards in global supply chains. Strengthening social partnership and social dialogue worldwide is an important tool for achieving these goals. International cooperation and initiatives, such as the ILO's future of work centenary initiative or the G7 and the G20 processes are fundamental in order to reduce poverty, persistent inequalities, unemployment, and to promote decent work.
Effective multilateralism is more important than ever: Global challenges need global attention, global responsibility and global solutions. We live in a time of multiple, overlapping crises that affect us all: climate shocks and natural disasters, pandemic emergencies, and conflict, violence, and forced displacement. These challenges cannot be solved nationally, but have to be addressed together. In our efforts to improve prospects for present and future generations around the globe, we are guided by the internationally agreed 2030 Agenda as well as the Paris Agreement. We require new ideas and sustainable approaches to fighting poverty and tackling inequality worldwide; including ramping up climate-related investments, providing innovative bonds to insure countries against natural disasters, and responding to major health crises like the Ebola outbreak. To maintain the momentum, we need strong multilateral institutions as well as sustained political commitment for the full implementation of agreed commitments. Africa's security, stability and sustainable development remain high priorities for us. We strive to support private sector efforts on investment, fostering industrialization and increasing African involvement in global value chains. We also share a common goal of helping African countries integrate in to, and benefit from the multilateral trading system The Compact with Africa Initiative to promote private investment flows, initiated by the German G20 presidency in 2017, relies on close cooperation between African governments and all interested development partners.
We welcome the Africa Investment Forum which is a new investment market place for pooling resources of multilateral development banks and international finance institutions, to help de-risk and leverage global pension funds, sovereign wealth funds, insurance funds and private wealth funds to invest in Africa.
Addressing climate change and protecting limited natural resources are urgent and important issues on our policy agendas. All international organizations are committed to combating climate change and promoting green growth, and to this end are cooperating within their mandates. Key challenges include aligning financial flows with the Paris Agreement and increasing climate and green finance. We also need to mobilize more private capital for low carbon investments and global green growth, as well as the transformation of our energy systems. The Paris Agreement also recognizes the critical role that a just transition of workers and enterprises towards sustainable alternatives will play. We are committed to a swift, full, and ambitious implementation of the Paris Agreement and a successful first stocktake of the Talanoa Dialogue at COP24 through our activities.