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Group of 20 leaders' summit is Friday and Saturday in Buenos Aires amid shared threats of trade disputes, migration and climate change.

Bloomberg, Content provider

November 28, 2018

5 Min Read
Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony Nov. 9, 2017, in Beijing, China.ThomasPeter/Pool/GettyImagesNews

by Josh Wingrove

The world’s principal forum of global leaders is marking its 10th anniversary with an identity crisis.

The debut Group of 20 leaders’ summit was convened in 2008 to develop an international response to the financial crisis ripping through markets. Leaders attending the latest edition in Buenos Aires on Friday and Saturday face shared threats from trade disputes to migration and climate change—but are so lacking in common purpose that a blowup looks more likely than a collective response.

President Donald Trump’s “America First” agenda is one obvious culprit for the breakdown in global solidarity, but far from the only one. Even as some leaders try to put on a show of unity, others are increasingly going it alone, whether Vladimir Putin’s power play in Ukraine, Saudi Crown Prince Mohammed Bin Salman’s business-as-usual approach after the murder of columnist Jamal Khashoggi, or even Theresa May’s dogged pursuit of Brexit. 

Given the global challenges, it’s in many ways a perfect time for a summit. But the outlook for substantial breakthrough seems slim: Trump blew apart the G-7 earlier this year and the Asia-Pacific Economic Cooperation summit ended in disarray this month without a joint statement for the first time. Russia’s attack on Ukrainian warships this week further diminishes the likelihood the G-20 will showcase multilateralism over nationalist isolationism.

The paradox is there may be little alternative to such summits, said John Kirton, who leads the G-20 research group at the University of Toronto. “If you believe the demand for global governance is great and growing, the only supplier left standing is the G-20,” said Kirton. “When leaders get together, big things can happen.” 

And yet at this week’s summit, big things are more likely to be defined on the sidelines. Trump’s long-awaited meeting with China’s President Xi Jinping will be parsed for signs of a cease-fire in their simmering trade war. It will at best “produce some signs from the top that an agreement could possibly be reached—but very little on the details,” said Mary Lovely, an economics professor at Syracuse University who specializes in trade. But the U.S. “seems to have done a lot more work to prepare for a trade war than a trade truce.”

After dodging bilateral talks this month during World War I commemorations in Paris, Trump is due to meet with Putin in an encounter that may show whether the U.S. leader still wants Crimea to be recognized as Russian territory. The U.S. is also set to sign a new trade deal with Canada and Mexico at the meeting, even as Trump threatens to permanently close the U.S.-Mexico border.

Summit Sidelines

The participating countries may yet come out the other end of the summit with a joint statement, but even if they do it will be watered down to accommodate the U.S. and others. It might not, for instance, even mention multilateralism. And then there’s the defiant Saudi Crown Prince; if he travels to Argentina, then all eyes will be on who—apart from Trump and potentially Putin—will shake his hand, let alone consider him a partner on international challenges.

 “My guess is a lot of the news will be made not by the communique that comes out, but by the bilaterals that are held—or not held,” said Ted Truman, a senior fellow at the Peterson Institute for International Economics. “It’s not going to produce a breakthrough in international cooperation, if I can put it that way, because the people are not ready for a breakthrough in international cooperation.” 

Trade, and Trump, will define much of the meeting. The same summit a year ago ended with a joint statement peppered with apparent Trump appeasement lines, such as condemning “unfair trade practices,” recognizing “the role of legitimate trade defense instruments” and noting the U.S. decision to quit the Paris climate accord. The final communique, in some sections, was less a unified joint statement than a laundry list of impasses.

Brewing Crisis 

The G-20 was established in 1999 as a forum for finance chiefs and central bankers from economies representing some two-thirds of the world’s population and 85 percent of global output. It was elevated to leaders’ level in 2008 in the depths of the financial crisis: the first summit was held in Washington two months after the collapse of Lehman Brothers. As leaders head to Argentina, the G-20 lacks the urgency it had at its outset. 

“But there’s a new crisis brewing, which is trade,” said Ronaldo Costa Filho, undersecretary general for Economic and Financial Affairs at Brazil’s foreign ministry, who is the country’s sherpa, or leader’s envoy at the summit. Even so, “joint consensus recommendations” are not yet within reach, he said. 

G-7 leaders meeting in Canada in June did manage to reach a common statement, only for Trump to disavow it hours later with a tweet from Air Force One, while labeling host Prime Minister Justin Trudeau “dishonest & weak.”

Five months on, the formal G-20 agenda as set by host Argentina focuses on infrastructure, jobs of the future and food security. The fight over steel and aluminum tariffs, and the threat of U.S. tariffs on auto imports, will also dominate sideline discussions, as will the future of the World Trade Organization, something of a sibling entity for the G-20. Talks began last month on how to reform it in a way both China and the U.S. would agree to.

Khashoggi Murder

The Khashoggi murder looms large. The summit will include Turkish President Recep Tayyip Erdogan, who has shared recordings related to Khashoggi’s murder with allies; Germany’s Angela Merkel, who has suspended Saudi arms exports; and Trudeau, who’s been locked in a diplomatic fight with the kingdom since before Khashoggi’s death. Trump has effectively deflected any Saudi role in the killing.

At the center of the diplomacy is Argentina’s President Mauricio Macri, who has sought to hold the summit together in something of a bid to re-enter the upper tier of world powers. But he’s vying to join a club at risk of collapse; take Brazil and Mexico, which will be represented by lame-duck leaders and not the incoming populists who’ve won power. 

It will be up to Macri and the liberal order as represented by Trudeau, Merkel and France’s Emmanuel Macron—the latter two not without their domestic difficulties—to try to save the G-20’s multilateral mission from its growing isolationist tendencies, according to Kirton. “We have two agendas warring withing the bosom of a single summit,” he said.

To contact the author of this story: Josh Wingrove in Ottawa at [email protected]

© 2018 Bloomberg L.P

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