G20 Summit to consider trade ministers' proposal to map global value chains

The two-day G20 Summit which begins on September 9 in New Delhi will consider a proposal by its trade ministers to endorse voluntary and non-binding "G20 Generic Framework for Mapping Global Value Chains (GVCs)". The trade ministers had underscored the importance of open, inclusive, resilient, sustainable, diversified and reliable GVCs in the Trade and Investment Ministerial meeting that was held in Jaipur on August 25. The outcome document prepared after the meeting stated that a mapping framework can help members identify opportunities for building resilience within GVCs.

The GVC framework, proposed as a well-defined, voluntary and non-binding generic mapping framework, is based on three building blocks – data, its analysis and its representation. It proposes that the GVC resilience framework should be based on collecting timely high-quality sector-level data and voluntarily providing firm-level data. It also recognises the complexity of GVCs and proposes the use of models and indicators to analyse the data to obtain key insights. Finally, the G20 trade ministers wanted the GVC resilience framework to use advanced technological tools that present underlying patterns from data analysis in a user-friendly manner.

By incorporating the building blocks, the ministers feel that the framework can help identify the sectors and products critical to GVC resilience.

The draft framework proposed by the ministers identifies concentration of suppliers and markets, volatility of trade volume and value, upstreaming or downstream of an industry or product, critical nature of the industry or product and connectivity as some of the key areas that can impact GVC resilience. Collaboration, coordination, preparedness, inclusion and sustainability, etc were also identified as some of the guiding principles that can help address the need for keeping critical GVCs resilient and robust.

The outcome document also proposes measures to strengthen the role of Micro, Small and Medium Enterprises (MSMEs) and to reform the World Trade Organisation (WTO).

G20, the forum for international economic cooperation, comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom and United States) and the European Union. Its members represent around 85% of the global GDP, over 75% of the global trade, and about two-thirds of the world population.