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G20 summit confirms countries’ readiness to seek consensus in global economic policy

23:13 | 10.12.2018 | Analytic

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10 December 2018. PenzaNews. The G20 leaders adopted a final declaration on the results of a two-day summit, which ended in Buenos Aires on December 1.

G20 summit confirms countries’ readiness to seek consensus in global economic policy

Photo: G20.org

The summit participants reaffirmed the need to reform the World Trade Organization (WTO), agreed to promote economic growth, work together to eliminate the causes of refugees, and also declared their commitment to the Paris Climate Agreement.

Commenting on the results of the meeting, Russian President Vladimir Putin noted that during the preparation of the communiqué “controversy arose over a number of issues” but in the end it has been agreed.

“[They were] the migration crisis, trade and other issues, but in the end, nevertheless, our colleagues made an effort, and the document emerged. Yes, it is more of a general nature with, perhaps, some “rounded edges”. However, I think this is good. […] Why is it important? Because it shows the most important problems that the G20 deals with, and, in any case, shows the direction we’re moving in, where we need to go in order to meet our goals. I think this is a positive result anyway,” Russian leader said answering journalists' questions.

Analyzing the results of the G20 summit, Nobuhide Hatasa, Professor, Nagoya University of Economics, expressed confidence that analysts and observers who watched the meeting were most worried about whether the leaders of G20 would be able to release a final joint communiqué.

“It was just happened within two weeks before the G20 summit during the 2018 APEC Summit held at Papua New Guinea that the leaders of APEC members for the first time since 1993 failed to issue Leaders’ Declaration. The fact that APEC Summit had ended without a formal leaders’ statement due to sharp conflicts […] casted a dark shadow over the results of the subsequent big international event of G20 in which the two hostile big nations sit at the same table again,” the expert told PenzaNews.

From his point of view, the summit can be considered successful only because the states managed to agree on a joint statement, although it does not include such words as “protectionism” and “unilateralism.”

“The countries decided to work together to develop and facilitate ‘a rules-based international order’,” Nobuhide Hatasa added.

Another important message shared among the leaders of G20 and incorporated in this year’s declaration is “the necessary reform of the WTO”, he said.

“The ideas of how to reform WTO system are completely different between Washington and Beijing but it is still a very significant statement as WTO has obtained endorsement from world leaders that it is the sole credible global platform where trade disputes are resolved orderly based on common rules,” he explained.

Meanwhile, Fernand Kartheiser, Luxembourg Parliament member for the Alternative Democratic Reform Party (ADR), noted that such meetings can be very valuable “in times of high international political tensions.”

“Even though they might not bring many concrete results in the short term, they undoubtedly have the merit to bring important leaders together and to offer a forum for discussions and thus prospects for longer-term improvements. The meeting in Argentina was therefore helpful, even though the relations between different leaders remained stressed,” the politician said.

Also, according to him, there were many economic problems that needed to be urgently addressed.

“The current weaknesses in multilateral diplomacy make bilateral negotiations on the margins of such events even more important. The meetings between the US and China and the US and European leaders on trade issues were promising,” Fernand Kartheiser said.

However, in his opinion, the final declarations of such summits “seem often to be automatic and hollow repetitions of what has already been stated many times before.”

“One could argue, that the declarations should be much shorter and more focused.. The policies followed by Saudi Arabia are for instance in flagrant contradiction with the passage on gender issues in the final declaration of the Summit. Nevertheless the G 20 meeting in 2020 is scheduled to take place in Saudi Arabia. Interestingly, the passages on climate change appear to be slightly more careful about the climate change rhetoric than in the past. Considering the current issues on trade, it would also be important to give a new impetus to trade negotiations in the framework of the WTO,” Luxembourg Parliament member explained.

Meanwhile, the politician expressed disappointment with the cancellation of the official meeting between Russian and US presidents.

“It is to be hoped that such a meeting can be arranged soon. There are many international issues that wait for urgent responses, among which the future of the INF-Treaty,” Fernand Kartheiser added.

Fabio Masini from Department of Political Science at University of Roma Tre, Vice-President Italian Council of the European Movement, Managing Editor History of Economic Thought and Policy, Managing Director International Centre on European and Global Governance, expressed the opinion that the G20 in Argentina should be understood as “a declaration of suspension of the multilateral attempt to govern global issues.”

“G20 meetings have been trying to fill a gap in global governance. There is an increasing number of issues that call for a global response, and the G20 is a proxy for a global decision-making institution. The problem is that, being a diplomatic body where governments, not citizens, sit, negotiations substitute for decisions, and depend mostly on diplomatic relationships among them,” the analyst said.

According to him, the G20 participants try to find a compromise among conflicting national interests.

“There is no effective commitment on protectionism, on migrations, on climate change, etc. Each country goes on on its own, mainly by bilateral agreements,” Fabio Masini said.

“The failure of multilateralism is probably a sign that we urgently need to move forward, to a further step in global governance, designing more accountable and effective institutions, if we do not want to miss the challenges […] like global warming and climate change, a concrete struggle against poverty and conflicts, a new international monetary system, resource management,” the expert added.

In turn, Neil MacKinnon, Global Macro Strategist at VTB Capital, expressed the opinion that the summit could not significantly affect the current state of affairs in the international economy.

According to him, the summit did not meet expectations regarding a possible settlement of the situation in trade relations between Washington and Beijing.

“Initial hopes that the G20 meeting would bring about a resolution of the US-China trade dispute have faded. This increases the downside risks facing the global economy in 2018 as well as increasing financial market uncertainty and volatility,” Neil MacKinnon explained.

Meanwhile, Brittaney Warren, Director of Compliance, Lead Researcher Climate Change & Environment, University of Toronto, drew attention to the importance of holding the G20 summits.

“They allow world leaders an opportunity to come together face-to-face in a relatively informal setting. It also gives leaders an additional opportunity to meet bilaterally and to come to agreement or discuss areas of disagreement. These meetings set the tone for the international community, and even if tensions were high this year and not all of the world’s problems were resolved, […] it is better if these world leaders continue talking. The alternative is that they do not talk and that could prove much worse for international relations and multilateralism,” the analyst said.

However, in her opinion, the tone of this year’s Buenos Aires summit was one of uncertainty.

“There were concerns that the leaders wouldn’t be able to produce a consensus communiqué, as happened at the APEC summit. On the first day of the summit several press briefings were cancelled or were closed to the briefing countries’ home media. There were also concerns about the ability of leaders to come to consensus on key issues, such as anti-protectionism and climate change, given the domestic issues many G20 countries were facing, and continue to face. But on the second day, the leaders were successful in producing a consensus communiqué, with 86 collective, politically binding, future-oriented commitments,” Brittaney Warren reminded.

However, from her point of view, the substance of those commitments was lacking.

“There was no strong statement on anti-protectionism, rising inequality, or climate change, which is being left to the UN’s COP24 to deal with, and which the G20’s oil producing members are continuing to thwart,” the expert said adding that the domestic turmoil happening in many G20 countries weakened the ability of the G20 leaders to take meaningful action and to make meaningful, substantial commitments.

Meanwhile, Sourabh Gupta, Senior Fellow at the Institute for China-America Studies in Washington, also stressed the importance of the annual meeting.

“Despite the deep bitterness in ties today among some of the major powers, it brings their national leaders under one roof. This is no small achievement, and it was evident in the body language of the assembled leaders. The more leaders talk to each other at the summit level, the lower the chances are that they will indiscriminately take recourse to force to pursue their national goals on the immediate burning international issue of the day. Unilateralism will not be reversed by such summits but the effects of such policies can perhaps be better managed,” the analyst said.

At the international economic systemic level, more conceptually, these summits do hold real value, he said.

“Economic power in the world today is too widely-dispersed for any one country or bloc of countries to impose its or their will on others. There is no global economic hegemon today although the US does enjoy the capacity to exercise a fair degree of financial hegemony due to the global role of the dollar. On the other hand, the lack of a hegemon also creates a coordination problem, especially when the overall system requires collective action on the part of major and intermediate powers to address critical challenges,” Sourabh Gupta said.

“It requires habits of cooperation under a broad-based international governance umbrella to furnish such joint cooperation. The G20 provides such an umbrella. And this umbrella becomes that much more critically-important on a rainy day – as was the case in the immediate aftermath of the Global Financial Crisis in 2008–2009,” the expert added.

The fact that all parties could issue a joint communiqué was itself modestly stabilizing, he said.

“It showed that countries were willing to forego some of their more selfish demands in order to forge a loose consensus on global macro-economic policy coordination. I know this is a low bar but unfortunately in the age of ‘America First’ and after the experiences at the G7 meeting in Canada and the APEC meeting in Papua New Guinea, this should be considered a welcome development,” Sourabh Gupta said.

Furthermore, from his point of view, it was important that China and the US were able to forge a truce with regard to their trade and investment conflict that will start on 1 January 2019.

“It remains to be seen whether the truce was worthwhile or not. But for the time being, it’s adequate to point out that it is fora like the G20 which allow such critically stabilizing give-and-take to happen,” the analyst concluded.

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