By Hamah Hosen –
Last weekend, leaders of the world’s biggest economies gathered in Buenos Aries for the 13th G20 Summit. The agenda of the 2018 summit focused on the future of work, infrastructure for development, and sustainable food projects. However, attention instead circled around high-stake diplomatic tensions between Trump and Xi Jinping, Saudi Crown Prince Mohammed Bin Salman’s appearance amidst accusations surrounding the death of Jamal Khashoggi, and Russia’s standoff against Ukraine in the Kerch Strait. Nevertheless, the G20 members managed to reach consensus and conclude the summit with significant developments for the future despite the existence of global tensions.
It has inevitably become a norm to closely watch the actions of leaders for any memorable, often awkward, moments during international events. This was no different for the G20 as the media was quick to jump on Trump’s swift exit before the group photo and his overheard remark ‘to get him out’ of the venue. Saudi Crown Prince Mohammed bin Salman and Putin also attracted attention as a result of being confronted by other leaders over their recent domestic actions. While these moments are easy to catch on to and often amusing, it is important to not let them overshadow the influential developments that came forward from the G20 Summit.
One significant outcome was the signing of the now notorious United-States-Mexico-Canada-Agreement (USMCA). The USMCA supersedes the previous North American Free Trade Agreement (NAFTA) which Trump considered “the worst trade deal ever”. Although minor differences, among them the name, this is considered by Trump as a “groundbreaking agreement” as it brings to the table an updated version of NAFTA with changes for automakers, new labour and environmental standards, intellectual property protections, and some digital trade provisions. Despite this, the deal still needs to be approved and ratified by all three countries. For lawmakers deciding on this deal, there remains considerable debate whether USMCA presents itself as a win or loss to their interests and also whether it is actually an improvement from NAFTA. Additionally, the US Congress will only consider this agreement in 2019. Even if the deal is eventually approved, the new provisions will likely not go into effect until 2020. Despite the potential delay, the outcome of this deal will certainly play a role in stabilising the future for North American trade.
Attention was rightly placed on Trump and Xi’s meeting at the G20 Summit given their recent trade war. The trade war between the two countries had raised concerns about its influence on the rate of global economic growth. In the International Monetary Fund (IMF)’s October outlook statement, it was stated that trade tensions and stresses in emerging markets are impacting the growth projections for 2018-2020. As such, the encounter between Trump and Xi over the weekend was of great importance. In an effort to regain global confidence and lower trade tensions, Trump and Xi agreed to a 90-day trade-truce on the implementation of any additional tariffs and agreed to address structural problems in their trading relationship in a deal. This means that the previously proposed tariff increase on $200 billion worth of Chinese imports from 10 percent to 25 percent in January will not be put into place. Despite this, it remains unclear what can be achieved in 90 days as their trade war goes deeper than just economics. The trade war can also be about power, territory, intellectual property, and cyber intrusions. The complexity of these issues suggests that it is unlikely to be resolved in such a short time frame. Furthermore, this temporary fix doesn’t necessarily signal the end of the trade war. In particular, the tariffs that US and China have previously imposed on each other remains intact during the 90 days. Although it is questionable whether the US and China will able to deliver on this truce, these 90 days allows for revitalised dialogue between the two countries that can be influential for the near future.
It is evident that the 2018 G20 Summit was utilized as a forum between leaders to work collaboratively on important international issues. Although there had been substantial developments during the summit, doubts still existed on whether the G20 would be able to close with a communique. Argentine President Mauricio Macri stressed that in order to relieve any doubts the summit needed:
“… to show to the world that today’s global challenges require global responses.”
President Mauricio Macri
2018 G20 Summit
Much to his delight, a communique emerged from this year’s summit and remarkably touched on key issues such as climate change, sustainable development, food security, and international trade. Notably, the joint statement recognised that the current multilateral trade system “is falling short of its objectives,” and as a result, called for a reform of the World Trade Organisation (WTO). While this commitment expressed by members of the G20 is indeed important, it still remains unclear what it will entail. In particular, the language used in the statement lacked sufficient details and skirted contentious issues on trade such as protectionism in order to gain consensus from China and the United States. It will be interesting to see whether the US will uphold its commitment to collaborate on WTO reform given that Trump had recently threatened to pull out of the WTO and has blocked new judicial appointments to the WTO Appellate Body over the US steel and aluminium tariffs. Due to a lack of detail on what reform will look like, it seems plausible that the US may continue to threaten the WTO or instead push for the dismantling of the international trade body. At this stage, one thing that is certain is that the Japan’s 2019 G20 presidency will play a key role in resolving this issue.
At this stage, it seems as if the key outcomes that emerged from the G20 Summit look good on paper but still remain full of doubt on what they entail. It was almost a game of fill-in-the-blanks of choosing the right word or phrase that would ensure some form of agreement. However, this kind of negotiation and compromise that led to the communique is precisely what diplomacy entails. According to President Macri, “the essence of the G20 is to foster dialogue while respecting differences” and it is clear that the 2018 Summit was no different. The ability to achieve significant agreements, including the final communique, no doubt showcases the importance of the G20 Summits for international politics.
