Fri, Jul 07, 2017 page9

• G20 might be most remarkable since the global financial crisis

  • By Andrew Hammond
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  World leaders are making final preparations for the G20 summit in Hamburg, Germany, today and tomorrow. The meeting, which is likely to see key splits between the US and other Western countries, could become the most remarkable G20 since the 2009 meeting in London during the storm of the international financial crisis.

  Presidents and prime ministers are to be in attendance from the US, China, Germany, India (which takes the G20 chair next year), Japan, Indonesia, Australia, Russia, Brazil, the UK, Saudi Arabia, South Africa, Turkey, France, Italy, Germany, Canada, South Korea, Argentina, Mexico and the EU. Collectively, these powers account for about 90 percent of global GDP, 80 percent of world trade and about 66 percent of the global population.

  It is not just the splits in the West that could make this year’s G20 memorable. There is also massive attention being paid by many international publics to Russian President Vladimir Putin’s long-awaited first meeting with US President Donald Trump.

  However, the biggest spectacle will be the divisions within the usually more unified Western powers. Key splits are likely to be witnessed between Canada, the US and key EU states over issues such as international trade, migration and climate change.

  German Chancellor Angela Merkel last week sent a coded message to Trump that “whoever believes that the world’s problems can be solved by isolationism and protectionism is mistaken... One shouldn’t expect any easy conversations in Hamburg.”

  What this appears to underline is that she will not shirk controversy at the summit, which will also see high-profile protests outside the security perimeter.

  Given the splits in the Western ranks, Merkel might well find that one of her strongest allies on climate and trade issues could be Chinese President Xi Jinping (習近平). Xi has positioned himself this year as a defender of economic globalization and also a big advocate, like Merkel, of the Paris global climate change deal.

  In part, this is because the Chinese leader wants to defend the legacy of last year’s G20 summit in Hangzhou, China, which focused on the need for more innovative, sustainable global growth. Just prior to the event in September last year, Xi and former US president Barack Obama both formally ratified the Paris agreement, an important move given that the US and China are together responsible for 40 percent of the world’s carbon emissions.

  The ambitious German summit agenda has a key theme of the “networked world.” The broad agenda that sits under this includes financial regulation and, in particular, addressing “harmful tax competition” between countries.

  Despite potential US opposition, Merkel also wants to reaffirm G20 commitment to free trade. One specific potential flash point with this agenda is the possibility that Trump will use the summit to demand specific action to reduce excess capacity and other perceived distortions in the steel market.

  Germany also wants to put Africa’s development on center stage at the summit. In particular, Merkel wants to secure support for a “Compact with Africa” to bring more private investment, jobs and new businesses to the continent. On a similar theme, there will also be discussion on how best to move forward with the UN’s implementation of the 2030 Agenda for Sustainable Development, and the German hosts also want as many of the G20 as possible to recommit to the Paris agreement.

  This is an ambitious program that is unlikely to be fully realized. Although the G20 is widely perceived since the 2008-2009 financial crisis to have seized the mantle from the G7 as the premier forum for international economic cooperation and global economic governance, it has limited effectiveness in practice.

  It has been a decade since the group was upgraded from a finance minister body to one where heads of state meet — a move that was greeted with considerable fanfare, including from then-French president Nicolas Sarkozy, who claimed that “the G20 foreshadows the planetary governance of the 21st century.”

  Yet, the fact is that the forum has failed so far to realize the full scale of the ambition some thrust upon it at the height of the international financial crisis. A key part of failure to deliver on previous high expectations is that the G20 meetings have no formal mechanisms to ensure enforcement of agreements by world leaders.

  That the agenda will include a focus on Africa, sustainable development and a more equitable world order will be noted with irony by some non-G20 countries. There remain concerns in some of these states about the composition of the G20, which was originally selected in the late 1990s by the US along with G7 colleagues. While states were nominally selected according to criteria such as population, GDP, etc, criticism has been made of omissions such as Nigeria, sometimes called the “giant of Africa,” which has three times South Africa’s population.

  Former Norwegian minister of foreign affairs Jonas Gahr Store has gone so far to call the G20 “one of the greatest setbacks since World War II,” inasmuch as it undermines the UN’s universal sense of multilateralism. Reflecting this, the UN General Assembly in 2009 convened the rival UN Conference on the Global Economic Crisis as an alternative forum.

  Taken overall, while the G20 has not yet lived up to some of the initial expectations of it, it continues to be a forum prized by its members. This year’s forum could be especially memorable given the Trump-Putin meeting, plus the divisions that are likely to be on display within Western powers owing to Trump’s “America first” agenda.

  Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.
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