WT/GC/221  
 
29 September 2020  
(20-6610) Page: 1/22 
General Council  Original: English  
 
 
G20 TRADE AND INVESTMENT MINISTERIAL MEETING  
COMMUNIQU É 
Tuesday , 22 September 2020 
The following  communiqu é, dated 22 September 2020, is being circulated at the request of the 
delegation of the Kingdom of Saudi Arabia.  
 
_______________  
 
 
1.  We, the G20 Trade and Investment Ministers, met virtually on 22 September 2020, under the 
G20 Saudi Presidency, to further strengthen G20 trade and investment cooperation.  
2.  We have met on two previous occasions this year for extraordinary virtual meetings to ensure a 
coordinated response to the impact of COVID -19 on global trade and investment and the global 
economy. We remain gravely concerned with the serious risks posed to all countries, particularly 
developing and least developed countr ies, and notably in Africa and small island states.  
3.  Amid the COVID -19 pandemic, we will continue our cooperation and coordination to: (i) support 
recovery of international trade and investment; (ii) support the necessary reform of the World Trade 
Organizat ion (WTO) to which the Riyadh Initiative on the Future of the WTO provides political 
support; (iii) encourage greater international competitiveness of Micro -, Small and Medium -Sized 
Enterprises (MSMEs); (iv) foster economic diversification; and (v) strengt hen international 
investment.  
4.  At this critical time, trade and investment must act as important engines of growth, productivity, 
innovation, job creation, development and poverty reduction, to contribute to laying the foundation 
for a global economic recov ery that leads to sustainable, balanced and inclusive growth. We will 
continue to take joint actions to strengthen international cooperation and frameworks.  
5.  We recall the importance of maintaining focus on the implementation of the Sustainable 
Development Goals and the role of trade and investment in this regard.  
Supporting Recovery of International Trade and Investment  
6.  We continue to endorse the "G20 Actions to Support World Trade and Investment in Response 
to COVID -19" which we will continue to implement and recall our request that the Trade and 
Investment Working Group provide status updates. In this regard, we welcome the progress 
achieved, in particular the termination of many trade restrictive measures and the imple mentation 
of trade facilitation measures. We reiterate the importance that any emergency trade measures 
designed to tackle COVID -19, if deemed necessary, are targeted, proportionate, transparent, 
temporary, reflect our interest in protecting the most vulne rable, do not create unnecessary barriers 
to trade or disruption to global supply chains, and are consistent with WTO rules.  
7.  We will continue to do whatever it takes and to use all available policy tools to minimize the 
economic and social damage of the pa ndemic, restore global growth, maintain market stability, and 
strengthen resilience, as mandated by our Leaders.  WT/GC/221  
 
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8.  As health challenges continue to take center stage, we emphasize the essential role of the 
multilateral trading system in promoting stability a nd predictability of international trade flows, as 
well as of trade and investment policies in ensuring that all countries have access to essential medical 
supplies and pharmaceuticals, including vaccines, at an affordable price, on an equitable basis, 
where they are most needed and as quickly as possible, and incentivize innovation consistent with 
members' international commitments. We also recognize the need to increase the sustainability and 
resilience of national, regional, and global supply chains and to expand production capacity and 
trade, notably in the areas of pharmaceutical, medical and other health -related products. We will 
continue to explore COVID -19 related WTO initiatives in this respect.  
9.  We will continue to work to realize the goal of a free , fair, inclusive, non - discriminatory, 
transparent, predictable and stable trade and investment environment and to keep our markets 
open, including to assist in the recovery from the economic and social impacts of the pandemic.  
10.  The need to handle trade te nsions and to foster mutually beneficial trade relations, affirmed 
last year in Tsukuba, is critical in the post COVID -19 scenario. We reaffirm that structural problems 
in some sectors, such as excess capacities, can cause a negative impact. We will contin ue to work 
to ensure a level playing field to foster an enabling business environment.  
11.  We highlight the critical role that the digital economy and electronic commerce have played in 
helping sustain economic activity through the COVID -19 pandemic and in ens uring the continued 
operation of supply chains and delivery of essential goods and services. We also note that the 
pandemic has underscored the challenge of the lack of access to the digital economy for many 
vulnerable citizens due to the persistence of th e digital divide. We recall the Osaka Leaders 
Declaration and the Tsukuba Trade and Digital Economy Ministers Statement and reaffirm the 
interface between trade and the digital economy. We note the ongoing discussions under the Joint 
Statement Initiative o n Electronic Commerce and the Moratorium on Customs Duties on Electronic 
Transmissions, and reaffirm the need to reinvigorate the Work Program on Electronic Commerce at 
the WTO.  
12.  We recognize the importance of continuing to foster women 's economic empowerme nt with a 
view to achieving global economic recovery. To that effect, we take note of the work of the 
Women  20 and will continue to support the growth of women -owned businesses and their increased 
participation in global markets and international trade.  
Supporting the Necessary Reform of the WTO – Riyadh Initiative on the Future of the WTO  
13.  We recognize the contribution that the Riyadh Initiative on the Future of the WTO has made by 
providing an additional opportunity to discuss and reaffirm the objectives a nd foundational principles 
of the multilateral trading system and to demonstrate ongoing political support for WTO reform 
discussions.  
14.  We note the Chair 's "Summary of the Exchange of Views under the Riyadh Initiative on the 
Future of the WTO " (Annex 1) and  its transmission to all WTO Members through the General Council 
of the WTO. This Summary was prepared by the Chair of the Trade and Investment Working Group 
under his own responsibility and is without prejudice to the positions of individual members.  
15.  We reaffirm our commitment to the objectives and principles enshrined in the Marrakesh 
Agreement Establishing the WTO.  
16.  We recognize that the effectiveness of the multilateral trading system depends on the 
implementation of WTO rules by all Members, as well as their respective enforcement, in order to 
maintain the balance of Members ' rights and obligations.  
17.  We remain committed to working actively and constructively with other WTO Members to 
undertake the necessary reform of the WTO. We recognize that this reform  should improve the 
functions of the WTO and we encourage a constructive discussion of all proposals in this regard.  
18.  We recognize transparency as an important condition for enhancing trade predictability and 
fostering trust between WTO members with regards  to the compliance with their WTO obligations. 
In this regard, we reaffirm our commitment to fulfil our WTO transparency obligations and to lead WT/GC/221  
 
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by example and we call on all other WTO Members to do so. We recognize the need for assistance 
to WTO Members t hat face capacity constraints in meeting their notification obligations. We 
acknowledge ongoing discussions to enhance transparency and bolster compliance with notification 
obligations at the WTO.  
19.  We underscore the significance of ongoing WTO negotiations and reiterate our support to 
achieve an agreement by 2020 on comprehensive and effective disciplines on fisheries subsidies, as 
WTO Ministers decided at the 11th Ministerial Conference. Many members affirm the need to 
strengthen international rules on indu strial subsidies and welcome ongoing international efforts to 
improve trade rules affecting agriculture. Many of us highlighted agricultural subsidies and 
agricultural market access. We also stress that urgent action is necessary regarding the functioning 
of the dispute settlement system in order to contribute to predictability and security in the 
multilateral trading system.  
20.  We note the ongoing discussions under the Joint Statement Initiatives (JSI) at the WTO, 
including the JSI on E -Commerce, Investment F acilitation for Development, MSMEs, and Services 
Domestic Regulation. G20 participants in these initiatives call for significant progress in the lead up 
to the 12th WTO Ministerial Conference. We note that concerns have been expressed on rule -making 
by som e G20 members  who are not part of the JSIs.  
21.  We note the process under -way to select the next Director General of the WTO. We look 
forward  to working with all WTO Members towards concluding the selection process by the 
7th of November 2020.  
22.  The 12th WTO Ministerial Conference represents an important milestone in an inclusive and 
ambitious process of WTO reform. We will use the additional time available until then to bolster our 
efforts to work constructively with other WTO Members to achieve meaningful pr ogress in advancing 
our shared interests, including emerging stronger from the COVID -19 pandemic and progressing 
with the necessary reform of the WTO to improve its functioning.  
Boosting the International Competitiveness of MSMEs  
23.  MSMEs play a critical role  in our economies, employing between 40 to 90 percent of the labor 
force, accounting for 95 percent of firms across the world, and generating 35 to 60 percent of our 
GDP. Their ability to continue growing and to increase their significant contribution to e conomic 
activity depends, in part, on their capacity to further integrate into the global economy. We also 
recognize the different challenges faced by MSMEs in different countries, and notably in developing 
and least developed countries.  
24.  MSMEs face disprop ortional challenges in their efforts to become more competitive and more 
integrated into the global economy. They are particularly vulnerable to shocks, such as the COVID -19 
pandemic, are disproportionately affected by the lack of resources, information an d skills, including 
to adapt to technological changes, encounter challenges in adapting to different regulatory 
frameworks and new regulations, and face difficulties in joining regional and global value chains. 
This is particularly the case for women -owned  MSMEs which often have limited access to finance 
and business opportunities.  
25.  With the objective of promoting inclusive economic growth through increased participation of 
MSMEs in international trade and investment, we endorse the "G20 Policy Guidelines on  Boosting 
MSMEs ' International Competitiveness " (Annex 2). These non -binding and voluntary Policy 
Guidelines will provide reference to national and international policymaking, notably for participants 
in the WTO Joint Statement Initiative on MSMEs, that co ntributes to improving the capacity of MSMEs 
to connect, compete, change and adapt in the face of emerging technologies and external shocks.  
Fostering Economic Diversification  
26.  Economic diversification reduces vulnerability to economic shocks and remains an  important 
goal for all countries, particularly developing and least developed countries. The economic and social 
impact of the COVID -19 pandemic raised our sense of urgency in working to address structural 
weaknesses and increase the resilience and sustai nability of our economies and our value chains WT/GC/221  
 
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inter alia  through more diverse production and trade structures. In this regard, we acknowledge that 
trade in services and special economic zones could foster economic diversification.  
27.  We note the "Synthesis R eport of Members ' Best Practices and Lessons Learned on Trade in 
Services " (Annex 3). We recognize the important role that services and services trade play in 
supporting growth, development and diversification strategies. We further emphasize the 
importanc e of continuing constructive discussion on supporting the increased participation of 
developing countries in services trade, and on increasing economic opportunities for women and 
youth in particular.  
28.  We note the "Synthesis Report of Members ' Best Practice s and Lessons Learned on Special 
Economic Zones (SEZs) " (Annex 4). Many members consider that SEZs can contribute to investment 
attraction, economic diversification, industrial upgrading, export growth, job creation and income 
generation. Members recognize  that SEZs should be administered in a manner that ensures 
compliance with WTO rules and guards against the risk of illicit trade.  
Strengthening International Investment  
29.  Foreign direct investment (FDI) is key for economic growth, job creation and capital 
accumulation. The COVID -19 pandemic has had an immediate negative effect on international 
investment flows, adding to the stagnant global investment flows over the past decade, and 
significantly widening the already -large gap in investment needed t o meet the SDGs. In this regard, 
recalling the voluntary G20 Guiding Principles for Global Investment Policymaking, we are committed 
to facilitate and strengthen international investment.  
30.  We recognize the relationship between industrial, investment and tra de policies, especially in 
our coordinated response to the COVID -19 pandemic. In this regard, we see value in sharing best 
practices on promoting investment in productive sectors related to or impacted by COVID -19, and 
to identifying key areas, such as cri tical medical supplies and equipment and sustainable agriculture 
production, where investment is urgently needed.  
31.  We note the "Report on FDI Flows and Investment Attraction Frameworks in Developing and 
Least Developed Countries ", which refers to gaps in in vestment promotion capabilities and 
opportunities for improved cooperation in the provision of technical assistance on investment 
attraction to developing and least developed countries.  
32.  Through a "G20 Statement on Technical Assistance for Investment Attrac tion" (Annex 5), we 
encourage further collaboration among the competent authorities of G20 countries, including in the 
G20 Development Working Group and with international organizations, within their mandates, to 
consider additional actions to address gaps  in investment -related technical assistance.  
Way Forward  
33.  With a view to ensuring that international trade and investment can effectively contribute to 
realizing the opportunities of the 21st century for all by overcoming the economic and social effects 
of the pandemic and shaping a more resilient, inclusive and sustainable world for all, we jointly 
recommend our Leaders consider these important topics at the Riyadh Summit.  
34.  We extend our gratitude to the Saudi G20 Presidency for its determined efforts and le adership. 
We will submit this Communiqué to the G20 Leaders ' 2020 Summit and will continue our cooperation 
towards Italy 's G20 Presidency in 2021 and thereafter.  
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ANNEX 1  
RIYADH INITIATIVE ON THE FUTURE OF THE WTO  
TIWG CHAIRS SUMMARY  
Table of Contents  
BACKGROUND  ................................ ................................ ................................ ..................  5 
PROGRESSION OF WORK  ................................ ................................ ................................ . 5 
CHAIR'S SUMMARY  ................................ ................................ ................................ ..........  6 
COMMON OBJECTIVES  ................................ ................................ ................................ .........  6 
FOUNDATIONAL PRINCIPLES  ................................ ................................ ................................  7 
COLLECTIVE VISION TO ADVANCE THE NECESSARY WTO REFORM  ................................ ...........  7 
CONCLUSION  ................................ ................................ ................................ ...................  8 
 
 
This Summary was prepared by the Chair of the Trade and Investment Working Group (TIWG) under 
the Chair 's responsibility and is without prejudice to the positions of individual G20 members or 
guest countries . 
 
BACKGROUND  
G20 Leaders have repeatedly called for and supported the necessary reform of the World Trade 
Organization (WTO).  
 
In Argentina (2018), Leaders recognized the contribution that the multilateral trading system has 
made  to "growth, productivity, innovation, job creation and development " and that  "[t]he system is 
currently falling short of its objectives and there is room for improvement ", and therefore supported  
"the necessary reform of the WTO to improve its functioning ." 
 
In Japan (2019), Leaders reaffirmed their  "support for the necessary reform of the WTO to improve 
its functions " and committed to  "work constructively with other WTO Members, including in the lead 
up to the 12th WTO Ministerial Conference. " 
 
Additional ly, in endorsing the  "G20 Actions to Support World Trade and Investment in Response to 
COVID -19" at their Extraordinary Meeting of 14 May 2020, the Trade and Investment Ministers noted 
that the long -term actions identified in the document  "support the nece ssary reform of the WTO and 
the multilateral trading system. " 
 
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The Riyadh Initiative on the Future of the WTO (the Riyadh Initiative)  was launched by the 
Saudi G20 Presidency (the Presidency), building on the commitment from our Leaders, to provide 
an additional opportunity for members to work constructively towards the necessary reform of the 
WTO. By identifying common ground of WTO ob jectives and trade policy principles under the Riyadh 
Initiative, the G20 can play an important role in providing political support for reform discussions. 
The discussions on the specific issues of WTO reform will continue to take place exclusively at the 
WTO among its full membership.  
 
PROGRESSION OF WORK  
The Presidency has consulted with all G20 members and guest countries, and a consensus was 
reached to pursue the Riyadh Initiative.  
 
In the context of the first Trade and Investment Working Group (TIWG) m eeting on 9 March 2020, 
the G20 formed a Focus Group under the Riyadh Initiative to concentrate the discussion on strategic 
questions relating to the multilateral trading system and the future of the WTO.  WT/GC/221  
 
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The Presidency facilitated the discussion by colle cting members ' responses to a set of strategic 
questions, as follows:  
 
1. How can the multilateral trading system be used to advance our shared objective of promoting 
 growth, productivity, innovation, job creation and development?  
 
2. What are the objecti ves that the WTO should pursue? What are the foundational principles 
 that should underlie the WTO?  
 
3. What is the policy vision for how agreed functions of the WTO should be fulfilled to meet our 
 objectives?  
 
4. Which reference materials and sources of trade and economic policy principles are helpful in 
 providing a historical perspective and supporting t he improved functioning of the WTO?  
 
The Presidency compiled and circulated responses to the above four strategic questions from all 
TIWG members and guest countries to identify common objectives and trade policy principles for 
WTO reform.  
 
Further, the Pr esidency organized a virtual Riyadh Initiative Workshop on 25 June 2020 that 
convened G20 members, guest countries, WTO Deputy Directors -General, as well as global trade 
policy specialists for a high -level discussion on WTO objectives and foundational prin ciples. The 
Presidency hopes that the workshop discussions support the work of G20 members as we seek to 
advance the necessary reform of the WTO.  
 
During the second TIWG meeting on 29 June 2020, members presented their answers to the 
strategic questions an d discussed the scope of common WTO objectives and principles that could be 
identified, as well as issues on which further efforts are required to reach consensus.  
 
During the third TIWG meeting on 20 –21 September 2020, the Presidency presented to members 
the Chair 's Summary of the Riyadh Initiative for further discussion.  
 
During the Ministerial Meeting on 22 September 2020, Trade and Investment Ministers noted the 
Chair 's Summary of the Riyadh Initiative and its transmission by Saudi Arabia to the General  Council 
of the WTO.  
 
The Chair 's Summary of the Riyadh Initiative may be utilized to provide political support on further 
reform discussions among WTO Members.  
 
CHAIR 'S SUMMARY  
G20 members confirmed that they continue to fully support the objectives of th e WTO and share 
common ground based on its foundational principles. The views expressed by G20 members can 
provide political support to advance the necessary reform of the WTO in Geneva.  
 
The following section summarizes the G20 discussions into three cate gories: (i) common objectives, 
(ii) foundational principles, and (iii) the collective vision to advance the WTO reform.  
 
COMMON OBJECTIVES  
At their Extraordinary Summit on 26 March, G20 Leaders reiterated the objective  "to realize a free, 
fair, non -discrim inatory, transparent, predictable and stable trade and investment environment, and 
to keep our markets open. " Our discussion highlighted the role of the WTO to achieve Members ' 
objectives, and specifically noted the importance of the WTO rules in supportin g economic recovery 
from the COVID -19 pandemic.  
 
All members reconfirmed their commitment to the objectives enshrined in the Marrakesh Agreement 
Establishing the WTO, with most members noting that some of these objectives are also reflected in 
the Marrakes h Declaration.  
 WT/GC/221  
 
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FOUNDATIONAL PRINCIPLES  
With respect to the principles that underpin the WTO, the Chair notes that G20 members ' responses 
referred to the foundational principles embodied in the Marrakesh Agreement and included in the 
covered agreements, with most members noting that some of these foundational principles are also 
reflected in the Marrakesh Declaration.  
 
The Chair n otes the following outcomes of the exchange of views on foundational principles:  
 
• All members agreed to list the following as part of the principles of the WTO:  
 
o Rule of law  
o Transparency  
o Non-discrimination  
o Inclusiveness  
o Fair competition  
o Market openness  
o Resistance to protectionism  
o Reciprocal and mutually advantageous arrangements, acknowledging that agreements 
provide for differential and more favorable treatment for developing economies, including 
special attention to the particular situation of least devel oped countries  
• Most members stressed that 'sustainability ' is a principle of the WTO  
• Most members stressed that 'market -oriented policies ' is a principle of the WTO.  
• Some members stressed that 'special and differential treatment ' is a principle that is 
integral to and underpins the WTO and that should be preserved. Many members, 
highlighting that WTO rules contribute to economic growth and development, expressed 
the view that S&DT is a tool to facilitate the achievement of WTO objectives and should 
be appli ed on the basis of demonstrable needs.  
• Members noted the practice of consensus -based decision making in the WTO, expressly 
carried  over from the GATT in the Marrakesh Agreement. Some members consider this 
practice to be a principle of the WTO.  
 
COLLECTIVE  VISION TO ADVANCE THE NECESSARY WTO REFORM  
Concerning the policy vision for how agreed functions of the WTO should be fulfilled to meet agreed 
objectives, the G20 discussions focused on the need for members to fully comply with the WTO 
obligations negotia ted and agreed to by WTO Members.  
 
G20 members agreed on the need to provide political support to achieve the necessary reform of 
the WTO and to improve the functions of the WTO.  
 
A general sentiment emerged that in order to engage in effective reform, members must fully adhere 
to existing WTO obligations on transparency. Members shared ideas and referenced initiatives on 
transparency that could be pursued at the WTO in order to enhance trade predictability and to bolster 
compliance with WTO noti fication obligations and recognized the need to support Members that face 
capacity constraints in meeting their obligations.  
 
All members reaffirmed the importance of multilateral approaches to negotiations. Most members 
suggested that, using the flexibili ties provided by the WTO framework,  "open plurilateral " 
negotiations could be pursued by members who were ready to move ahead on particular issues and 
highlighted the momentum that, in the light of historical precedents, such initiatives can provide 
toward s multilateral outcomes. Other members recalled existing rules on negotiations and decision 
making in the WTO and emphasized that new rules be adopted by consensus.  
 
Recalling Tsukuba Trade Ministers ' call for action regarding  "the functioning of the dispu te settlement 
system consistent with the rules as negotiated by the WTO Members ", members agreed that the 
dispute settlement system is in urgent need of reform. Divergent views were expressed on the 
nature of reforms that would ensure the WTO dispute settl ement system faithfully supports the 
WTO's important functions of monitoring and negotiation.  
 WT/GC/221  
 
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CONCLUSION  
The Saudi G20 Presidency extends its appreciation to all TIWG representatives for their feedback 
and engagement in the Riyadh Initiative. The Presiden cy notes the following outcomes of the Riyadh 
Initiative:  
 
• G20 support for the objectives enshrined in the Marrakesh Agreement Establishing the 
WTO, with most members noting that some of these objectives are also reflected in the 
Marrakesh Declaration.  
• Affirmation of foundational principles of the multilateral trading system with different 
views being expressed on various issues.  
• Determination to tackle the necessary reform of the functions of the WTO and to discuss 
all proposals in this regard.  
• The need fo r Members to fulfill their notification obligations as a necessary condition for 
Members to effectively monitor compliance with existing rules.  
• Recognition by most members of the value of pursuing plurilateral negotiations on issues 
where progress can be a chieved and emphasis by some members that new rules be 
adopted by consensus.  
• Shared sense that the dispute settlement system needs urgent reform, with divergent 
views on the nature of such reforms.  
 
The Saudi G20 Presidency sincerely hopes that the Riyadh Initiative will help advance the shared 
interest of WTO Members in bringing about the necessary reform of the WTO, so it can fulfil its 
objectives of improving the lives of the world 's citizens and ensuring peaceful, inclusive and 
sustainable economic deve lopment through multilateral cooperation.  
 
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  WT/GC/221  
 
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ANNEX II  
G20 POLICY GUIDELINES ON BOOSTING MSMES  ' INTERNATIONAL COMPETITIVENESS  
Non-binding Policy Guidelines  
With the objective of promoting inclusive economic growth through international trade and foreign 
investment, and recognizing that Micro, Small and Medium Enterprises (MSMEs) represent the 
overwhelming majority of companies and contribute significantly to employment and GDP worldwide, 
including in the G20 countries;  
 
Acknowledging that ensuring transparent and predictable rules for global trade particularly benefits 
MSMEs who have fewer resources than larger firms;  
 
Recognizing the particular challenges MSMEs face in internationalization, including in the areas of 
access to information, technology, digital, and finance, compliance with standards, technical 
regulations and conformity assessment procedures, connecting to supply chains and developing 
sustainability and crisis resilience, especially in the context of the COVID -19 pandemic;  
 
Recognizing the different challenges faced by MSMEs of different sizes, capabilities and in different 
countries, and notably in developing and least developed countries, including due to the persistence 
of the digital divide;  
 
Acknowledging that empowering MSMEs can contribute to realizing inclusive economic growth and 
to fulfilling the Sustainable Development Goals (SDGs);  
 
G20 members hereby propose the following non -binding policy guidelines on boosting MSMEs ' 
international competitiveness  as important elements for sustainable MSMEs growth and integration 
into global and regional value chains.  
 
Boost MSMEs ' capacity to connect  
I. Access to information : support national and international efforts, including in the WTO, to 
improve access to relevant information for MSMEs  ' internationalization, including through:  
 
a. Enhancing access to market intelligence for MSMEs, especially information regarding 
market ac cess, trade and investment policies, public procurement opportunities and 
cross-border procedures;  
b. Enhancing communication channels and networks for MSMEs, including through 
deepened collaboration with the private sector;  
c. Enhancing the transparency of term s and conditions of cross -border sales on digital 
platforms;  
d. Ensuring transparency on trade -related measures through compliance with WTO 
notification obligations;  
e. Enhancing the transparency of information on standards, technical regulations and 
conformity assessment requirements;  
f. Considering the specific needs of MSMEs engaged in international trade in domestic 
regulatory development, to the extent practicable.  
II. MNC-MSME linkages : encourage MSMEs, Multinational Corporations (MNCs) and their affiliates 
to develop fair, balanced, and mutually advantageous linkages to support increased participation of 
MSMEs in global and regional supply chains, and to explore ways of making those supply chains 
more resilient and reliable for MSMEs, including through the str engthening of relevant business 
support organizations that host information portals on competitiveness of local MSMEs and offer 
matchmaking services, with MNCs and MSMEs ensuring confidentiality of data generated through 
the partnership.  WT/GC/221  
 
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III. Digital infra structure : develop universal, secure and affordable connectivity, in particular 
digital connectivity infrastructure, to help MSMEs lower the cost to internationalize, including through 
support to meet the Sustainable Development Goal 9 of the 2030 United N ations Agenda.  
 
Boost MSMEs ' capacity to compete internationally  
IV. Market -based MSME upgrading : foster upgrading of practices and capabilities of MSMEs, 
when possible, through cooperation with MNCs to enable the use of relevant and transparent industry 
standards, ensure the quality and compatibility of inputs in various stages of value chain production, 
and provide for the safety and security of final products. Such improvements might also contribute 
to the economic, social and environmental sus tainability of international trade and investment 
activities.  
 
V. Trade of safe, high quality goods : strengthen public or private national quality infrastructure 
that transmits knowledge on and provides assurance of the safety of goods for trade and invest ment, 
without creating unnecessary restrictive regulations and unnecessary obstacles to international 
trade.  
 
VI. Trade facilitation : enhance trade facilitation, including by full implementation of the WTO Trade 
Facilitation Agreement, by adopting digital solutions, where possible, to support the movement of 
goods across borders, and ensure that any trade facilitation measures are non - discriminatory to 
MSMEs and are mindful of MSMEs challenges, to the extent practicable.  
 
Boost MSMEs ' capacity to change an d adjust  
VII. Technology and innovation : adopt policies that help MSMEs benefit from digital 
transformation and seize opportunities in new technologies for increased competitiveness in the 
global market, including through:  
 
a. Encouraging educational systems,  including vocational training, to supply MSMEs with 
the skilled labor force needed to work with the latest technologies;  
b.  Considering the particular needs and challenges of MSMEs when designing and 
implementing innovation policy support instruments;  
c.  Promoting collaboration between the private sector and academic or other research 
institutions through skill development and innovation incentives;  
d.  Promoting collaboration between private and public actors for effective identification 
and sharing of informati on on technologies.  
VIII. Access to finance : facilitate MSMEs ' access to finance, including trade finance and finance 
that facilitates adoption of new technologies.  
 
IX. Crisis preparedness : ensure that MSMEs are able to take full advantage of assistance p rograms 
to support speedy recovery from external shocks that hit individual sectors or the entire economy.  
 
Enhance evidence -based policy making for MSMEs ' competitiveness  
X. Data collection : step-up efforts to regularly collect, to the extent practicable,  firm-level data for 
better informed policy making and the facilitation of MNC -MSMEs matchmaking.  
 
XI. Information exchange and notification : utilize existing multilateral channels, on a voluntary 
basis, such as the WTO  's Trade Policy Review process and the WTO Informal Working Group on 
MSMEs, to step -up exchange of information on MSMEs -relevant policies.  
 
XII. Bilateral mechanisms : give due consideration to MSMEs issues in bilateral trade and 
investment agreements and mechanisms or develop new mechanisms such as partnerships for 
MSMEs development and policy dialogues to better coordinate and implement MSMEs -related policy 
goals.  WT/GC/221  
 
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REFERENCES  
G20/ITC (2020*), Internationalization of Micro, Small and Medium -sized Enterprises in the 
21st Century: Challenges and Policy Options, Background note for the Saudi Arabian presidency of 
the G20 Trade and Investment Working Group, March 2020.  
 
G20/ITC (2020*), The Impact of Technological Disruption on Small Businesses, Background note for 
the Saudi Arabian presidency of the G20 Trade and Investment Working Group, March 2020.  
 
G20/World Bank (2020*), Boosting MSMEs  ' international competitiveness thr ough promoting 
MNC-MSME linkages: theory, practice and a policy agenda, Background note for the Saudi Arabian 
presidency of the G20 Trade and Investment Working Group, March 2020.  
 
International Trade Centre (ITC). (2015). SME Competitiveness Outlook 2015:  Connect, Compete 
and Change for Inclusive Growth. Geneva: ITC.  
 
International Trade Centre (ITC). (2018). SME Competitiveness Outlook 2018: Business Ecosystems 
for the Digital Age. Geneva: ITC.  
 
Jansen, M. and R. Lanz (2013), Skills and Export Competitive ness for Small and Medium -Sized 
Enterprises, Geneva: World Trade Organization.  
  
Organization for Economic Co -operation and Development (OECD). (2019a).  
OECD SME and Entrepreneurship Outlook 2019. Paris: OECD Publishing.  
 
World Bank (WB), World Trade Organ ization (WTO) (2019), Global Value Chain Development Report 
2019: Technological Innovation, Supply Chain Trade and Workers in a Globalized World, World Bank 
Group, Washington, DC.  
 
World Trade Organization (WTO). (2018). World Trade Report 2018: The Future  of World Trade, 
How Digital Technologies are Transforming Global Commerce. Geneva: WTO Publishing.  
 
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ANNEX III  
SYNTHESIS REPORT OF MEMBERS' BEST PRACTICES AND LESSONS  
LEARNED ON TRADE IN SERVICES  
This Synthesis Report was prepared by the Chair of the Trade and Investment Working Group (TIWG) 
under the Chair 's responsibility based on different inputs provided by G20 governments and invited 
countries and is without prejudice to their individual positions.  
 
The Economic Contri bution of the Services Sector and Trade in Services  
G20 participants emphasized that services and services trade have become an important engine of 
economic growth. Services trade contributes to efforts at diversifying the economy and national 
export struc tures, as well as to improving infrastructure, including for commodity -dependent 
economies and developing countries.  
 
The important role of services in G20 economies is reflected in the sector's high share of GDP 
(e.g.,  54% in China and Russia , close to 70 % in Canada , Germany , Japan , and South Africa , and 
80% in the United Kingdom ) and its contribution to employment (e.g., 55% in Indonesia , 67% in 
Russia , 70% in the Republic of Korea , 80% in Australia ). Typically, services' share of GDP and 
employment has tended to increase in recent times. The sector also accounts for a predominant 
share of new businesses established (about 80% in Germany ). 
 
Services play a large and increasing role in international t rade and investment. Overall, trade in 
services has expanded faster than trade in goods over the last decade. A number of countries report 
that services' share of their total exports has been increasing. In South Africa , 10% of the country's 
services job r elate to services exports. In Spain , services exports amount to 10.6% of GDP. 
In Russia , services exports constituted 43% of non - commodity exports.  
 
The participation of developing economies in trade in services also grew with digital services playing 
an increasing role in that trade. Developing countries have comparative advantage in a number of 
services and tapping this potential could help diversify exports beyond goods. In Argentina , 
knowledge -based services are of particular importance for micro, smal l and medium -sized 
enterprises (MSMEs), which accounted for almost half of the country's services exports. Some 
sectors highlighted for export strength and growth in developing economies include business 
services, finance and insurance, telecommunication, computer, information services, tourism, 
transport, construction, and health services. The services sector also accounts for a significant share 
of inward foreign direct investment (FDI) (e.g., 70% in Turkey  in 2019, 60% in India). 
  
The services sector an d trade in services, including digital services, are expected to play an important 
role in the post COVID -19 economic recovery. The pandemic had inflicted significant damage to 
services sectors, but the shift to digital services in various areas has contri buted to resilience and 
could offer future growth opportunities.  
 
Services as Inputs to Other Economic Activities and their Role in Supply Chains  
Across G20 economies, services are increasingly used as inputs in the production process in the 
manufacturing and agriculture sectors. This has strong implications for economy -wide productivity, 
competitiveness of merchandise exports, and economic diversification.  
 
Services inputs enable firms to increase their productivity and produce a greater number of products . 
In addition, the supply of services jointly with goods, such as insurance, financing or maintenance 
services, allows firms to keep adding value by offering integrated solutions to their customers.  
 
For many G20 participants, services represent, in value -added terms, a significant share of exports 
of manufactured products and of total exports. For example, in Mexico , Russia , the United Kingdom  
and the United States , services value -added content contributes approximately a third of 
manufacturing exports. In  value -added terms, services account for an estimated two -thirds of total 
exports in the United Kingdom , almost 60% in the case of the European Union , and about half for 
Brazil . A significant share of services value added in exports stems from imported ser vices.  
 WT/GC/221  
 
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This underscores that exports of goods rely intensively on services inputs. Access to quality services, 
such as telecommunication, finance, logistics, or transport services, is indispensable for 
manufacturing and agricultural businesses to connect to global and regional value chains. Dynamism 
of the services sector, effective regulations and openness to services trade are linked to overall 
competitiveness and integration into the global marketplace, and diversification. Many members 
highlighted that  the supply of digitally -enabled services and the free flow of data, respectful of 
privacy and data security, can facilitate the use of services as inputs into goods production and 
trade.  
 
Furthermore, lower entry -costs in many services sectors compared to  manufacturing facilitate the 
participation of MSMEs in GVCs.  
 
Services Trade Policies and the Role of Services in Growth, Development and 
Diversification Strategies  
Services and services trade play a significant role in growth, development and diversification 
strategies of G20 participants. A highly innovative and competitive services sector is vital in 
maintaining global economic growth and efficiency and is a key driver of economic diversification in 
the 21st century, both in developing and de veloped economies. Increasing services trade can 
contribute to economic diversification, thereby enhancing economic stability and reducing 
vulnerability to shocks.  
 
Various G20 participants highlighted strategies that can be used to create the right condit ions for 
diversification, including a combination of domestic measures and trade policies, such as: 
championing greater services trade liberalization – at home and abroad –, improving transparency 
of services policies, supporting business to export service s, attracting foreign direct investment in 
services sectors, facilitating the free flow of data, without prejudice to legitimate public policy 
objectives, improving the business climate, and promoting services related to environmental 
protection, such as u sing the circular economy as one of the available tools, among  others, to achieve 
environmental sustainability.  
 
Various G20 participants underscore the key and positive role of their domestic services policies in 
fostering growth and diversification. Stre ssed in that regard were the positive impact of measures 
to open up the services sectors to international competition, as well as the high relevance of quality 
and transparent domestic regulatory frameworks and of a sound business environment. Such 
domesti c policies can contribute to enhancing the competitiveness of national companies and to 
fostering greater participation in international trade.  
 
As regards services trade openness, Saudi Arabia , for instance, decided to allow 100% foreign 
ownership in road  transport services to improve efficiency, safety, sustainability, and to facilitate 
connectivity and trade in goods. Brazil 's full liberalization of the air transport sector aimed to 
facilitate access to key services inputs so as to improve overall compet itiveness. Turkey , for its part, 
abolished public monopolies and opened the market to competition in telecommunication and postal 
and courier services, which resulted in improved and more affordable telecommunication and logistic 
services. Some G20 economi es also highlighted benefits of reforms to their foreign investment 
regime, which facilitated services trade under mode 3 (commercial presence). India opened new 
sectors to FDI and liberalized its visa regime.  
  
With respect to domestic regulatory framewor ks and business environments, participants highlight 
that government policies that standardize and simplify licensing, registration and other requirements 
for services sectors, and that maintain fair competition by establishing independent and impartial 
sectoral regulators, such as in telecommunication services, can create more favorable conditions for 
services firms and services trade to grow.  
 
In terms of international actions, many participants highlight that services liberalization and binding 
commitmen ts can provide stability, predictability, and lower trade barriers. Many participants 
underscore the importance of negotiations on domestic regulation disciplines in the WTO, noting 
their contribution to regulatory transparency and their benefits for busin esses, especially MSMEs. 
Many participants stress the importance of rule -making on e -commerce in the WTO for the promotion 
of trade in services in the digital economy and the benefits of a greater participation of smaller 
businesses in digital trade. Some participants underscored the importance of strengthening the 
exploratory and non -negotiating engagement under the Work Program on E -Commerce at the WTO WT/GC/221  
 
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before embarking on rule - making on E -Commerce. Some participants stressed on the need to 
reinvigorate m ultilateral discussion in the Working Party on Domestic Regulations at the WTO. Some 
participants stress the importance of international discussions on data governance. Finally, some 
participants emphasize the need to focus on overcoming the digital divide , improving digital 
infrastructure in developing countries and enhancing digital capabilities.  
 
G20 participants also shared that undertaking comprehensive work to identify relevant applied 
measures affecting trade in services, in the context of participat ion in bilateral or regional trade 
negotiations, can facilitate services trade through increased transparency and predictability. A 
number of governments had also taken actions to enhance collaboration with the private sector. In 
Brazil , for example, the " Simplifica Program" aims at simplifying the business environment by 
tackling bottlenecks identified by the private sector. Russia  has launched the  "Regulatory guillotine " 
initiative, which stipulates for the revision of all mandatory requirements and proce dures with the 
view to withdraw unnecessary and excessive requirements identified by the private sector.  
 
A number of G20 participants have taken actions specifically designed to help SMEs enter the global 
services market. Under Australia 's "Services Expor t Action Plan", the Australian government 
responds to industry -led recommendations aimed at boosting the service sector's export potential. 
In Indonesia , the government established a program to boost the tourism sector as a part of the 
creative economy, wh ich is key to the economic diversification strategy, by facilitating the 
development of priority destinations.  
 
Enhancing Transparency and Predictability for Services Trade  
Various G20 participants considered it important to enhance transparency of service s trade policies 
so as to facilitate trade in services.  
 
The importance of promptly notifying measures in the WTO was stressed by many participants, along 
with that of publishing measures online, including in advance of their implementation, wherever 
possible. The importance of consulting widely across government and with industries and key trading 
partners on the development of new measures or reforms to existing measures, was also 
underscored. The role of international organizations, such as the WTO, in m aking available further 
information on trade in services was also mentioned.  
 
Many participants indicated that international rules on transparency of domestic regulations and 
binding commitments in trade agreements also make important contributions. A stab le and 
transparent domestic regulatory framework, as well as international rules on trade in services 
generate stability, transparency and predictability for services trade suppliers.  
 
Trade in Services and Aid for Trade  
A number of G20 developing countrie s believe that Aid for Trade plays a critical role in advancing 
international cooperation in trade in services and that Aid for Trade needed to be mobilized to provide 
new trade opportunities, reduce trade costs in services, and enhance connectivity by pro viding an 
enabling environment for service markets.  
 
Aid for Trade could support the implementation of services trade policies in several key areas, such 
as policies to: facilitate the supply of basic infrastructure services; help establish enabling condit ions 
for the online supply of services; promote value chain integration and facilitate access to, and supply 
of, services used as inputs into the production and export of goods; help enhance diversification by 
fostering greater services exports across all modes of supply, including cross -border electronic 
supply; and assist in the development and implementation of national legal frameworks for domestic 
and cross -border e -commerce.  
 
A number of countries note that open and well -regulated services markets are key to ensuring that 
developing countries can integrate in regional and global value chains and benefit from global trade 
in services. It was pointed out that market access was not the only barrier, as lack of infrastructure, 
insufficient regul atory frameworks, and skill levels could affect the capacity of businesses in 
developing countries to take advantage of trading opportunities. While preferences for LDCs, such 
as under the WTO LDC Services Waiver, and other export -oriented programs may be important,  
capacity -building to help overcome supply -side constraints is critical to foster the development of 
services trade.  WT/GC/221  
 
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The Contribution of Trade in Services to Women Empowerment and Youth Employment  
G20 participants observed that  women  and youth  typically play a larger role  in the services sector. 
In Canada , 90% of  female labor  force is  employed  in the service sector as  are 86% of workers  of 
both sexes between the ages of  15 and 24. In Spain , services employ 80% of those aged under 29 
(75%  for those aged 29 or older) and 89% of women (65% of men). In  Russia , the share of women 
employment in the services sector is  above 80%,  compared  with 15% in manufacturing and 4% in 
agricultural sectors. In the United Kingdom , there are more women in senior  and top management 
positions in  services than in manufacturing.  
 
Since the services sector accounts for a predominant share of new businesses established, a vibrant 
services sector provides important opportunities for women and young people to start their  own 
company. In Canada , women start -up more businesses in this sector.  
 
In that context, policies that encourage trade in services tend to increase opportunities for young 
people and women. In countries where the participation of women and youth in the ec onomy is 
deemed insufficient, the development of the services sector provides a promising channel for 
unlocking potential and driving their engagement in the workforce.  
 
It was noted that, in some countries, the gender -differentiated wage gap is lower in s ervices than 
in manufacturing. The rise of services therefore has the potential to promote gender equality in the 
labor market. E -commerce is also mentioned by some participants as important to increase the 
participation of women and under -represented grou ps in services trade, given relatively lower 
barriers to entry.  
 
_______________  
 
  WT/GC/221  
 
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ANNEX IV  
SYNTHESIS REPORT OF MEMBERS ' BEST PRACTICES AND LESSONS  
LEARNED ON  SPECIAL ECONOMIC ZONES (SEZS)  
This Synthesis Report was prepared by the Chair of the Trade and I nvestment Working Group (TIWG) 
under the Chair 's responsibility based on different inputs provided by G20 governments and invited 
countries and is without prejudice to their individual positions . 
 
SEZs in G20 Countries  
Special Economic Zones programs are w idely used in the majority of G20 members. Some members 
have a significant number of zones, including China, India, Turkey, and the United States.  
 
Several high - and upper -middle -income G20 countries, such as Spain, the Russian Federation and 
Turkey, are c urrently developing high value -added or strategic industries through technology -based 
zones (e.g. R&D, high -tech, or biotech zones) and other specialized zones, with the aim to support 
the transition to a services economy and to upgrade innovation capabili ties. The Russian Federation 
has established various specialized SEZs, including Industrial SEZs, Technology and Innovation 
SEZs, Tourism and Recreational SEZs, and Logistical SEZs. Turkey has developed Technology 
Development Zones (TDZs) and Specialized F ree Zones (SFZ) to promote market -oriented 
technological development and to contribute to the establishment of a knowledge -based economy.  
 
A number of members are developing new generation zones with specific objectives related to 
sustainability targets, i ncluding combining high -tech industry ecosystems for SMEs and 
environmental protection initiatives. For instance, the Incheon Free Economic Zone (IFEZ) in the 
Republic of Korea aims to be eco -friendly by providing automatic waste -collection system and othe r 
facilities.i In Spain, SEZs are developed as 3D incubators to provide a supportive environment for 
SMEs and to promote the development of domestic Industry 4.0 strategies.ii 
 
A number of G20 countries (e.g. Japan and China) have also emphasized the role of SEZs as a 
testing field for regulatory reforms. The 10 National Strategic Special Zones in Japan have facilitated 
challenging regulatory reforms.iii In China, one of the main objectives of the Pilot Free Trade Zones 
(PFTZs) is to expl ore new pathways to comprehensive policy reforms. Over 200 practices developed 
in the Pilot Free Trade Zones were later implemented nationwide.iv 
 
Some countries, including Australia, Canada, Switzerland and Singapore, do not have SEZ programs 
in their mix  of policy schemes to promote and facilitate trade and investment. Australia, for example, 
favors FTAs, trade and investment liberalization and facilitation to SEZ programs.v Switzerland 
focuses on improving the general framework conditions in a sectorial  and technology neutral manner 
and does not pursue an industrial policy in the sense of promoting certain industries or technologies 
in the framework of SEZs.vi Canada, similarly, applies a liberal tariff policy and programs that offer 
 
i The Incheon Free Economic Zones (IFEZ) objectives are "the urban development of IFEZ area 
(smart -city, green -city, global business city), inducing foreign direct investment to IFEZ area and constructing 
the multi -functional economic city. " 
ii Spain 3D incubators aim to "provide and nurture a protective environment for SMEs in a unique 
technological incubator; allocate potentia l entrepreneurs that require edge technological support; promote the 
4.0 Industrial revolution in the Spanish Economy; transform the economic environment in Barcelona and 
Spain; and re -convert the logistic chain industry. " 
iii In Japan, "in the 10 areas desi gnated by the national government, bold regulatory reforms and other 
measures such as tax incentives are comprehensively and intensively promoted for projects carried out jointly 
by the central government, local governments, and the private sector. As of A pril 2020, over 100 reforms have 
been realized and over 350 projects are ongoing as a result of these regulatory reforms. " 
iv China 's PFTZ "encourage innovation in systems and mechanisms, trade and investment facilitation and 
liberalization, etc. The PFTZ a re piloting reform measures and spreading good practices and experience to 
other areas, the zones have cultivated a climate of reform and innovation nation -wide and inspired local 
governments to improve their services and local business environment. " 
v Australia "has found that the FTAs, trade liberalization and facilitation and foreign direct investment 
provide far greater benefits than special economic zones. " 
vi Switzerland "does not pursue an industrial policy in the sense of promoting certain industries  or 
technologies in the framework of SEZ”. “Instead, the country focuses “on improving the general framework 
conditions in a sector neutral and technology neutral way. " WT/GC/221  
 
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domestic businesses many of the same benefits as those found in SEZs to support business 
productivity and competitiveness by reducing direct production costs.vii The preference to a ttract 
investment through other means than SEZs is not universal among the higher -income G20 
economies; the United Kingdom is in the process of policy consultation to build up to 10 freeports, 
with the aim to promote regeneration and job creation, and crea te innovative hubs for global trade 
and investment across the country.viii 
 
Potential Positive Impact of SEZs  
The Economic Contributions of SEZs  
A number of G20 participants with SEZ programs have emphasized SEZs ' contributions to investment 
attraction, econ omic diversification and industrial upgrading, export growth, job creation and income 
generation – both directly and indirectly, as well as to increasing participation in global value chains.  
 
FDI attraction . SEZs are seen by many G20 members as a key inve stment promotion tool. Italy 
stressed the economic benefits and contributions of SEZs in attracting investment in the less 
developed areas of the country. In China, PFTZs contributed 15% to the country 's total foreign 
investment and international trade in 2019. SEZs in the Russian Federation have attracted investors 
from 37  countries by the end of 2019.  
 
Economic diversification and industrial upgrading . There are numerous examples among G20 
members of how SEZs have contributed to economic diversification a nd industrial development and 
upgrading. SEZs in the United Arab Emirates have led to diversified streams of revenue and 
promoted economic diversification in terms of trade and investment. For South Africa, one of the 
main considerations in defining the ty pe of the zone is to develop multi -activities zones targeting 
diverse economic sectors rather than on one or few sectors. In Turkey, TDZs have encouraged 
technology dissemination by supporting cooperation between zones and universities as well as 
higher ed ucation institutions.  
 
Export growth . Many G20 countries have reported that SEZ programs account for a major share of 
their exports, particularly manufactured exports. In many countries, zones are regarded as crucial 
to stimulate trade and industrial expor t activity. In Turkey, TDZs contributed $4.4 billion and Free 
Zones contributed $7.98 billion to its exports in 2019.  
 
Job creation . Most G20 members (e.g. Argentina, Brazil, India, and Indonesia) consider SEZs an 
effective tool for job generation, particu larly for women entering the workforce. Worldwide, an 
estimated 90 -100 million people are directly employed in SEZs and free -zone programs 
(World  Investment Report 2019 (WIR19)).ix In the Russian Federation, over 42,000 jobs were 
created within SEZs by the  end of 2019. The Aegean Free Zone in Turkey provides employment to 
more than 20,000 people around the region and all Free Zones in Turkey provide employment to 
more than 75,000 people. Four industries in Brazil 's Ceará SEZ generated more than 16,000 direc t 
and indirect jobs.  
 
Income generation . Many members noted that zones expansion has contributed to the generation 
of additional government revenues. In Indonesia, The Galang Batang SEZ has contributed to an 
increase of 25 per cent of the local government revenues in the Bintan District for the period 
2016-2018. During the same period, the zone has also contributed to the rise of the Gross Regional 
Domestic Product of the district by around 16%.  
 
Social and Environmental Benefits . G20 countries have also re cognized the social and environmental 
benefits of SEZs. SEZs have promoted regional development, contributed to gender balance and 
improved labor quality as well as enhanced environmental protection.  
 
vii Over the past decade, Canada "has maintained a proactive tariff policy to support bus iness 
productivity and competitiveness by reducing direct production costs for Canadian manufacturing. This includes 
unilaterally eliminating tariffs on all machinery and manufacturing inputs to make Canada a tariff -free zone for 
industrial manufacturers, and eliminating tariffs on certain inputs used by Canadian agri -food processors in 
their operations. Canada also offers programs that provide Canadian businesses many of the same benefits as 
those found in site -specific foreign trade zones, including duty relief programs that are applicable nationally. " 
viii UK Freeport consultation: https://www.gov.uk/government/consultations/freeports -consultation . 
ix WIR19. UNCTAD (2019). Worl d Investment Report 2019: Special Economic Zones. New York and 
Geneva: United Nations.  WT/GC/221  
 
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Regional development . Zones are also considered as a potential tool for promoting regional 
development, although proximity to cities and infrastructure hubs remains a precondition for zone 
success. Argentina noted that the establishment of the free zones contributed to the development 
of regi ons that were in a critical economic situation. In Japan, the National Strategic Special Zones 
have contributed to regional revitalization, helping to address unique challenges such as labor 
shortage and health care. In the Republic of Korea, the Incheon F ree Economic Zones (IFEZ) areas 
are developed from  "nothing to everything ". IFEZ Authority has established schools, universities, 
and hospitals to make the zones more convenient for the residents. In Russia, territories of advanced 
social - economic develop ment (TORs) contribute significantly to the regional development policy. 
Many of them are located in the Far East regions of the country and so -called  "single -industry towns ". 
  
Gender balance . It was also noted that in some G20 countries, SEZs have clear initiatives that 
contribute to gender balance. Notably, in Turkey, the Organized Industrial Zone (OIZ) focused on 
increasing the number of kindergartens to increase the employment of women in the zone.  
 
Labor quality.  For many G20 members (e.g. Brazil, Ind onesia, the Russian Federation and Turkey), 
SEZs represent a stimulus for workforce training programs. In Brazil, as part of the Ceará SEZ 
development program, a local workforce qualification center was established, with the aim to qualify 
the local workfo rce, to meet the demand of qualified labor and improve the education and 
professional sector in the country.x 
 
Environmental protection . Most G20 countries aim to promote high environmental standards within 
the zones, and various measures were highlighted  to this end.xi SEZs and the incentives offered 
therein can attract investment relevant to the Sustainable Development Goals (SDG). Recent years 
have witnessed the emergence of so -called eco -industrial parks. Existing SEZs are also becoming 
more sustainabl e development -friendly (WIR20).xii Modern zones, in particular, offer facilities 
tailored to the needs of target industries. Such SEZs tend to have zone -specific environmental 
regulations and dedicated facilities for waste treatment. In the Republic of Kore a, IFEZ aims to be 
eco-friendly by being low carbon with automatic waste -collecting system and re -use of sewage. For 
Spain, it is important for the zones to contribute with their transformation according to the UN SDG.  
 
Some G20 countries have also acknowl edged that services provided by zone operating companies, 
or shared services among zone investors, are often used to support higher environmental standards. 
For instance, in Turkey, the Aegean Free Zone hosts only clean production facilities that meet cert ain 
environmental standards. The operating company, which holds an ISO 14001 certificate for its 
Environmental Management System, provides services for waste management, water treatment, 
disposal of garbage and recycling.  
 
 
x In 2019, 1,442 local workers were employed in the area of Galang Batang SEZ, Indonesia, from the 
construction sectors. In parallel, the developer of Galang Batang SEZ also conducted human resources training 
and development in aluminum and electrical industries. SEZs in the Russian Federation have promoted the 
development of human capital and growth of highly qualified personnel. In Turkey, Aegean Free Zone and the 
compa nies investing in the zone provide various training programs for qualified personnel and are connected 
with vocational schools and universities around the region.  
xi In China, PFTZs pursue targeted strategies such as green development, commitment to better quality, 
higher efficiency, and more robust drivers of economic growth through reform, and strive to achieve high -
quality development. France stressed the importance of integrating SEZs dynamically in development strategy, 
avoiding environmental negative i mpacts by refusing the manufacture of goods with lower environmental 
disciplines than those that operate outside the SEZ. Saudi Arabia highlighted the importance of promoting 
compliance with established environmental standards.  
xii WIR20. UNCTAD (2020). Worl d Investment Report 2020: International Production Beyond the 
Pandemic. New York and Geneva: United Nations.  WT/GC/221  
 
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Concerns About SEZs  
Some members stressed the importance of avoiding undesired practices in SEZs (customs or tax 
fraud, intellectual property rights infringement, and other illegal activities, such as money 
laundering)xiii,xiv and called for adherence to the OECD Recommendation on Countering Illicit Trade 
and Enhancing Transparency in Free Trade Zones.  
 
In addition, some members raised concerns about the impact of SEZs on the level playing fieldxv and 
observed that some incenti ves offered to enterprises in these zones may distort trade and be 
inconsistent with certain WTO obligations. In this regard, some members called on governments to 
carefully review the WTO consistency of the incentives provided to enterprises that operate in their 
SEZs.  
 
While some members highlighted concerns linked to SEZ development, these concerns are 
non-exhaustive and not shared equally by all members. In addition, it should be noted that SEZ 
characteristics and impacts are country -specific, or in som e cases SEZ -specific and, as such, 
concerns raised by members may be difficult to generalize.  
 
Factors Enabling Success of SEZs  
Strategic focus . Several G20 countries (e.g. China, the Republic of Korea, Japan, the Russian 
Federation, Spain and Turkey) reco gnized that a well - designed SEZ program with clear goals and 
integrated with national development strategy is an important prerequisite to successful zones. 
Some G20 members consider that SEZs need to be built on the existing national competitive 
advantag es and closely linked to the country 's level of industrial development.xvi High-tech zones 
cannot be developed without sufficiently skilled resources, research institutions and the amenities 
to attract specialized foreign personnel.  
 
Locational advantages . Access to intermodal transport and closeness to ports or large cities, as  well 
as access to sufficiently skilled resources and research institutions have been highlighted as key 
locational advantages. For example, in Italy, the main reason cited for the success of Campania SEZ, 
is its strategic location close to key infrastruct ure hubs (ports and airports) and to labor pools. 
Investors in the zone are mostly those exporting by sea. Similarly, the Calabria SEZ aims to create 
connections between regional industrial areas and the port of Gioia Tauro, the center of the SEZ.  
 
Regulat ory framework and governance . Some G20 countries have stressed that an independent 
regulator or SEZ authority is considered a key factor in the success of zone programs. South Africa 
suggested that the public authorities should be involved in mainly regula tory functions rather than 
owning, developing or operating zones, removing any conflict of interest arising from the regulating 
body having the authority to approve zones and projects and at the same time owning specific zones.  
 
 
xiii France noted that regarding investment promotion in SEZs, a coordinated approach should be 
encouraged, in order to avoid loopholes that could be conducive to illicit trade. In a global perspective, 
counterfeiting, money laundering, drug smuggling or even illicit practices benefiting to terrorist groups might 
indeed take advantage of different legislations, legal loopholes or unseen practices taking  place in SEZs.  
xiv The United States noted concern that SEZs may attract the interest of criminal actors who want to 
take advantage of the relaxed oversight and softened customs controls to manufacture and distribute illicit 
goods. The United States emphasi zed the need for governments to ensure that proper intellectual property 
right protection and enforcement systems are in place in SEZs, so that illicit actors do not exploit the zones to 
facilitate their activities.  
xv Australia considers that trade benefit s are restricted to the special zones with limited spillovers.  
xvi For example, the advantageous geographic position, abundance of land and natural resources was 
key to the success of the Tourism and Recreational SEZs (TR SEZs) in the Russian Federation. Located in most 
picturesque regions in the country, the TR SEZs have all the necessary conditions for launching tourist, sports, 
recreational and other kinds of tourism businesses. They offer the possibility for developing beach, health, 
advent ure and eco -tourism, as well as extreme sports. The Russian Federation also stressed as major success 
factor of its SEZs the availability of human resources (the country has a 146.9 million strong manpower), and 
the highly skilled local personnel. Influent ial research institution/technical schools/universities are concentrated 
in regions where SEZ are located, which also grants investors ' access to R&D in science, technology, and 
medicine. Turkey also highlighted the importance of the specialized free zone location in the center of Izmir, 
the well -developed infrastructure and the qualified labor force.  WT/GC/221  
 
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Private sector involvement in zone development and management . Many G20 members stressed the 
importance of the involvement of the private sector in the ownership, development and management 
of the zones. South Africa has gradually allowed private sector to participate in zone develo pment 
and operation in order to increase the efficiency of zones. Turkey follows a Public -private partnership 
(PPP) model where a private company builds and operates the zone while administrative operations 
are carried out by the government. This modality enables the enhancement of the investment 
climate through mutual relationship between public and private parties.xvii 
 
Appropriate incentives . The incentives offered in zones are considered by many G20 members key 
elements of their value proposition, togethe r with investment facilitation practices. In Italy, in 
addition to tax credit, companies operating in the SEZs can also access all incentives that the State 
and the Regions make available to businesses as a whole, such as development contracts or funds 
to support the revitalization of industrial crisis areas. Administrative simplifications are the second 
major incentive for companies that decide to operate within an SEZ.  
 
Supporting services . Infrastructure and services were also noted by G20 members as key  for zone 
success. The Russian Federation developed transport infrastructure offering proximity of SEZ to 
federal highways, ports and airports. In Turkey, the Organized Industrial Zones (OIZ) investors 
benefit from low water, natural gas, and telecommunica tion costs. The importance of non -
infrastructure services has also been raised, including dedicated human resources -related services, 
security, catering or housing services, and on -site residential and commercial areas.xviii 
 
Good Practices in SEZ Development  
Zone evaluation and monitoring . Several countries conduct annual or periodical evaluation of their 
SEZs to ensure the  long-term performance and development of zones.xix Others require reports on 
performance from zone developers as monitoring tool.xx The Un ited Arab Emirates emphasizes the 
importance of evaluation, considering that without  suitable  instruments and tools to analyze, 
measure and improve the performance of SEZs, the benefits of diversification through the zones 
might not outweigh the costs. In China, third -party evaluations are regularly conducted on the 
performance of PFTZs, including their progress on the pilot reform tasks, as well as whether the 
practices and experience they developed can be spread to other areas. Similarly, the Russian 
Federation has established a comprehensive methodology to monitor and evaluate the performance 
of its SEZs, with annual evaluations of and reporting on SEZ functioning and operations. Spain has 
developed several KPIs to measure the full operation of both the 3 D Incubator and the 3D Factory.  
 
Investment facilitation measures . G20 members and observers are relying more on investment 
facilitation measures, in addition to or instead of fiscal or financial incentives, to attract investment. 
Almost all respondents ha ve reported some investment facilitation measures within their SEZs, 
where one -stop services are the most common practice. In Japan, it is estimated that about 
9.4 trillion yen have been generated by the redevelopment project in the Tokyo area by simplifyi ng 
and speeding up administrative procedures. India has developed an online electronic portal that 
enables electronic filing and processing of SEZ and customs related transactions. The system 
facilitates uniform validations and processes across all zones, electronic filing and processing, 
transparency in transactions and remote access, and has proved to be an efficient tool for reducing 
costs and time. Saudi Arabia has established a 360° integrated government service center 
(integrating services from differ ent departments and ministries) to facilitate investment -related 
administrative processes.  
 
 
xvii Other examples of the involvement of the private sector in zone development and management 
include Indonesia and Japan.  
xviii Services developed within SEZs hav e been raised by the Republic of Korea, Saudi Arabia.  
xix Countries which have conducted annual or periodical evaluation include China, Japan, the Republic of 
Korea, the Russian Federation, Turkey and Saudi Arabia.  
xx In Indonesia, and according to the Govern ment Regulation Number 1 Year 2020 regarding the 
operation of Special Economic Zones, the developer should report the SEZ development as well as the progress 
of investments to the Administrator and Local Government (as the Regional Council of SEZ). Central  
Government as the National Council of the SEZ periodically monitors and evaluates the development and 
operation of the SEZ.  WT/GC/221  
 
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International and regional cooperation on SEZs . Some G20 members have called for enhanced 
international and regional cooperation. They believe that the process of z one modernization could 
benefit from a global exchange of experience and good practices. The Russian Federation stressed 
that active promotion of experience and information exchange with other SEZ around the world, 
organization of respective international events (fairs, exhibition, forums) and participation of SEZ 
representatives (including residents and SEZ management) in such events, could improve the 
functioning of SEZ, as well as attract new investors and residents. Spain also expressed interest 
from th e incubated companies for attending more international events to share their experiences 
and success stories. France and the European Union emphasized the importance of cooperation for 
the implementation of the OECD Recommendation on Countering Illicit Tra de and Enhancing 
Transparency Free Trade Zones.  
 
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  WT/GC/221  
 
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ANNEX V  
STATEMENT ON TECHNICAL ASSISTANCE FOR INVESTMENT ATTRACTION  
We, the Trade and Investment Ministers of the G20 and guest countries, having met virtually on 
22 September  2020, recognize the serious risks posed to all countries, particularly developing and 
least developed countries, by the COVID -19 pandemic and its impact on the global economy, and 
reaffirm our endorsement of the  "G20 Actions to Support World Trade and Investment  in Response 
to COVID -19" and, notably, actions related to strengthening international investment.  
 
We acknowledge the role that foreign direct investment (FDI) can play as a driving force for economic 
transformation, growth, job creation and capital accumulation, as well as for fulfilling the 2030 United 
Nations Agenda for Sustainable Development.  
 
We note with concern that the COVID -19 crisis is causing a dramatic fall in FDI flows and that the 
outlook remains highly uncertain, with developin g economies expected to experience the biggest fall 
in FDI.  
 
We note that the legal and regulatory environment can be important factors in shaping investment 
decisions, which calls for encouraging measures to ensure better transparency and predictability f or 
investment, to improve administrative procedures and to enhance the contribution of FDI to 
sustainable development.  
 
We note the important role played by the provision of technical assistance to developing and least 
developed economies on  investment  promotion and facilitation to improve their ability to attract FDI, 
to maximize its benefits and to mitigate the negative economic impact of the pandemic.  
 
Against this background, we encourage the competent authorities in our respective Governments, 
includin g through their cooperation in the G20 Development Working Group to grant special attention 
to the following issues:  
 
• Possible intensification of the provision of investment -related technical assistance by G20 
countries and invited guest countries in a pos ition to do so, while being mindful of the serious 
challenges faced by our own economies.  
 
• Sharing of best practices on improving the efficiency and impact of investment -related 
technical assistance activities.  
 
• Possible actions to address gaps and ineffic iencies in that technical assistance, through 
increased coordination and cooperation with international organizations and multilateral 
development banks, within their mandates.  
 
We call on international organizations, within their mandates, to continue mon itoring and assessing 
the impact of the pandemic on FDI flows.  
 
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