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G-20 — undercurrents and elephants in the room

The G-20 Summit of the world’s most powerful economic nations concluded on July 8 in Hamburg. Although the leaders could not agree on many points, they found sufficient common ground on the following to release a carefully worded communique: The in-principle importance of free and fair trade, adherence to World Trade Organization (WTO) rules, cooperation on global health issues and financial stability, combating terrorism and its financing, and the importance of empowering women in international development.
They could not find common ground between the US and the other G-20 members on combating climate change. While there was a general commitment to the Paris accord on climate change, 19 members deplored the US decision to leave the agreement in June.
As always, what really mattered was not written in an official statement, but happened before the summit and on its sidelines. One unspoken issue was that the world’s most powerful leaders tried to come to grips with the new international vision and definition of the US as pronounced by President Donald Trump.
Hitherto the US stood for defending free trade, democracy and human rights. Despite the polite communique sentences on the importance of trade, Trump wants to either cancel trade pacts such as the Trans-Pacific Partnership (TPP) or renegotiate others such as North American Free Trade Agreement (NAFTA).

There is no hope of resolving the big issues of our time such as North Korea, Syria and climate change without an understanding of where the various players actually stand — this was probably achieved in Hamburg.

Cornelia Meyer

He is much more skeptical than his predecessors regarding the relevance of NATO. He has not changed his view on this point, even if he vowed to defend the values of the Occident during a state visit to Poland just before the summit.
Trump also seems less preoccupied with defending democracy than most of his predecessors.
His high-profile meeting with Russian President Vladimir Putin bore some fruit: A cease-fire and de-confliction between the US and Russia in southwest Syria. But Russia and the US are still miles apart regarding North Korea.

Filling the vacuum
The “new US order” was received with astonishment by most of the world’s leaders. The narrative of what the US wants to stand for seems to have changed substantially. Whenever a hegemon leaves a vacuum on the geopolitical stage, others will fill it. In the run-up to the summit, German Chancellor Angela Merkel seemed to look to China’s President Xi Jinping for support in leading the G-20.
Germany shares many interests with China, which is a big importer of German goods. The two leaders also stand together in supporting the Paris accord. But on many levels, the values of European nations are less congruent with Chinese interests than they had traditionally been with the US.
European nations share common values regarding democracy, personal freedoms and human rights. The Organization for Economic Cooperation and Development’s (OECD) definitions of these concepts vary considerably from the ones held by Beijing.
As for trade, it was significant that Japan and Europe managed to conclude a trade deal. Japan and EU member countries comprise 30 percent of the world’s gross domestic product (GDP), 10 percent of its population and 40 percent of global trade. This renders the agreement substantial, and proves that free trade is still a priority on many countries’ agendas.
The EU also needed to put to one side its usual narrative vis-a-vis Turkey and its President Recep Tayyip Erdogan’s definition of democracy and human rights. Ankara’s agreement with the EU stopped the stream of refugees into Europe via the southern Balkans. Germany has elections in September, and Merkel’s re-election chances could easily become unhinged if Turkey decides to give refugees free passage into Europe.
The focus on Africa can be seen in this context as well. OECD nations want to see an end to poverty and chronic youth unemployment in Africa. But they understand that without a perspective toward employment and prosperity on the continent, refugees will keep on coming across the Mediterranean. So we can expect Turkey-style deals with several North African countries.
Lastly, there were the demonstrators. Protests turned violent by Friday evening, landing more than 200 policemen in hospital. The demonstrators had different agendas, but shared the view that the G-20 lacked the legitimacy to decide the fate of the world. They reverberated the groundswell of discontent behind many of the populist movements in the West.

Good to talk
In defense of the G-20 Summit, these counties represent two-thirds of the world’s population, 85 percent of global GDP and 80 percent of world trade. Even if many of the most important global problems were not solved, the leaders were grappling with the aforementioned issues and many more.
The elephants in the room, and coming to terms with them, are often more important to solving global problems than what is actually said and done. There is no hope of resolving the big issues of our time such as North Korea, Syria and climate change without an understanding of where the various players actually stand — this was probably achieved in Hamburg.

• Cornelia Meyer is a business consultant, macro-economist and energy expert. She can be reached on Twitter @MeyerResources.