Senior leaders from 19 countries, plus the EU, will this weekend meet in Buenos Aires for the annual G20 summit. As usual, they will discuss global financial and economic policies. Many leaders will also hold important bilateral meetings on the sidelines of the summit. However, the 2018 conference is also likely see significant disagreements over trade and global economic governance.
As the G20 moves away from its early years of general agreement toward more contention, many analysts and policymakers are questioning whether it remains relevant. The G20’s importance has long been linked with the extent to which the US considers it worthwhile; so, today, with a US president who clearly does not support traditional global institutions, there are growing questions about its role.
This summit marks the 10-year anniversary of the conversion of the G20 from a technocratic institution focused on finance ministers to a full-fledged gathering of heads of state. The G20 was created in 1999 as a response to the debt crises in emerging markets in the late 1990s. The US’ Clinton administration played a key role through then-Treasury Secretary Larry Summers, who worked closely with Canadian and European partners to develop the G20.
Since the organization’s creation, its fortunes have closely followed the approaches of different US presidential administrations. During the George W. Bush administration, the G20 continued with ministerial-level meetings. While some global leaders wanted to expand the G20’s status and mandate, the Bush administration pursued a foreign policy that focused on unilateral actions or coalitions of the willing with specific goals, with limited interest in multilateral institutions.
That changed very late in the Bush administration’s tenure with the 2008 global financial crisis. As the crisis expanded, it quickly became clear that a global, coordinated response was required. An important part of that response was the first G20 summit of heads of state in Washington in November 2008. The Bush administration convened the summit, though it took place a few days after Barack Obama had won the 2008 election. Despite the forthcoming change in US leadership, the summit played an important role in coordinating a global response to the financial crisis, which many leaders recognized as a threat to their own countries requiring multilateral cooperation.
Despite growing concerns about the G20 as an organization, the summits provide a key opportunity for global leaders to meet together and one-on-one.
Kerry Boyd Anderson
The G20 continued to play an important role during the Obama administration, starting with the April 2009 summit in London. Obama’s foreign policy approach emphasized the need to reduce global reliance on US leadership and to increase burden sharing, while also maintaining US leadership through multilateral institutions and emphasizing partnerships and cooperation. This approach — combined with the need to mitigate and then recover from the financial crisis — drove the Obama administration’s support for the G20. US support for the organization, combined with the continuing need for financial stability, made the G20 a priority for many other participating countries as well.
During these years, G20 meetings tended to be marked by consensus on core issues. Of course, there were many criticisms made against the G20, including from those who opposed its approach to economics and finance, as well as from those who felt it was too exclusionary, leaving out many countries. However, the summits themselves were not hotbeds of disagreement.
Changes in leadership and shifting global trends have eroded that earlier consensus. Donald Trump exemplifies the challenge because US leadership remains critical for those who want multilateral institutions to continue advocating for capitalism, free trade, international cooperation and the post-Second World War global system and norms. Trump is clearly not an advocate for free trade, international cooperation, values such as human rights, or aspects of globalization such as increased integration. Trump takes a modern mercantilist, nationalist approach to international politics.
However, changes in Washington are not solely responsible for undermining the G20. While the leaders of France and Germany continue to advocate for the post-Second World War cooperative approach, some Europeans increasingly question the value of integration and globalization, as Brexit has demonstrated. China benefits from the global system in many ways but wants to modify it to better suit Beijing’s interests. Moscow wants to tear it down. Leaders in many emerging economies question the economic and political rules established by the major powers and often feel excluded from organizations like the G20. Furthermore, there are questions about what the G20 has achieved; economists and others debate the extent to which G20-affiliated reforms have helped improve financial stability.
Despite growing concerns about the G20 as an organization, the summits provide a key opportunity for global leaders to meet together and one-on-one. Trump plans to meet with Chinese President Xi Jinping and with Russian President Vladimir Putin, among others. Hopes are high that the meeting with Xi might produce a deal to end the US-China trade war that has significantly increased worries about the health of the global economy. In another potential major event, Trump and the leaders of Canada and Mexico might sign their new agreement, which would update NAFTA, at the summit.
In many ways, the creation of the G20 made sense at a time when economic power was diffusing beyond the Western powers, and those powers recognized the need to bring other countries into the decision-making process. However, much has changed in the last few years, and it is yet to be seen whether the G20 gathering remains an opportunity for enhancing global economic and financial cooperation.
- Kerry Boyd Anderson is a writer and political risk consultant with more than 14 years’ experience as a professional analyst of international security issues and Middle East political and business risk. Twitter: @KBAresearch
