World leaders concluded the G20 summit, hosted by Germany, in Hamburg on Saturday after 48 hours of high-wire diplomacy and massive street protests. The meeting, which saw key splits between the unusually more unified western countries, was one of the most memorable G20s since the 2009 meeting in London during the storm of the international financial crisis.
Presidents and prime ministers were in attendance from the United States, China, Germany, India (which takes the G20 chair in 2018), Japan, Indonesia, Australia, Russia, Brazil, United Kingdom, Saudi Arabia, South Africa, Turkey, France, Italy, Germany, Canada, South Korea, Argentina, Mexico, and the European Union (EU). Collectively, these powers account for some 90 per cent of global gross domestic product, 80 per cent of world trade and around 66 per cent of the global population.
It was not just the schisms within the West that made this year’s event so remarkable. There was also the much-hyped, long-awaited, first face-to-face meeting between Russian President Vladimir Putin and his US counterpart Donald Trump, which ran for more than two hours — well over twice as long as scheduled.
However, the bigger spectacle was divisions within the western powers, especially between the US and key EU countries, over issues such as international trade, migration and climate change. To be sure, there was not complete disagreement in these areas with all parties, for instance, acknowledging the importance of limiting global temperature rises to no more than 2 degrees Celsius above pre-industrial levels. However, given Trump’s recent rejection of the Paris climate accord, significant differences were aired over the means to secure this ambition.
Another flashpoint was the collision between German Chancellor Angela Merkel’s push for a strong G20 re-affirmation of international trade, and the Trump team’s call for international action to reduce excess capacity and other perceived distortions in the steel market. The US president is himself already reportedly considering imposition of tariffs on foreign steel firms, following a US Commerce Department investigation into steel exports into the US market.
Merkel acknowledged on Saturday the “difficulty of the talks” and before the summit sent a coded message to Trump that “whoever believes that the world’s problems can be solved by isolationism and protectionism is mistaken ... One shouldn’t expect any easy conversations in Hamburg”. Given her differences with Trump, Merkel rightly made big efforts to forge consensus on key issues with other key non-western G20 world leaders, especially Chinese President Xi Jinping. This was shrewd not just because Xi has positioned himself this year as a defender of economic globalisation, and also is a big advocate, like Merkel, of the Paris global climate change deal. But in addition, the Chinese leader proved keen in Hamburg to defend the legacy of last year’s G20 summit in Hangzhou, which he hosted, that focused on the need for more innovative, sustainable global growth.
Just prior to this event last September, Xi and the then US president Barack Obama formally ratified the Paris agreement, an important move given that the US and China are together responsible for 40 per cent of the world’s carbon emissions.
Significant progress was also made in Hamburg on the wider German summit agenda, which had a key theme of the “networked world”. For instance, there was discussion to address the so-called “harmful tax competition” between countries, which stems from the widespread use by companies and individuals of low tax countries as tax shelters.
The Germans also put African development issues centre stage in the meeting. In particular, Merkel championed a new “Compact with Africa” to bring more private investment, jobs and new businesses to those states in the continent committed to economic reform. There was also a debate on how best to move forward with the United Nation’s implementation of the ‘2030 Agenda for Sustainable Development’, and the German hosts sought as many of the G20 as possible to re-commit to the Paris agreement.
The fact that the agenda included such a strong focus on Africa, sustainable development, and a more equitable world order, was noted with irony by some non-G20 countries. There remain concerns in some of these states about the composition of the G20, which was originally selected in the late 1990s by the US, along with its G7 colleagues.
While states were nominally selected to be in the G20, according to criteria such as population, GDP etc, criticism has been made of omissions such as Nigeria, sometimes called the ‘giant of Africa’, which has three times South Africa’s population.
Former Norwegian foreign minister Jonas Gahr Store has gone so far to call the G20 “one of the greatest setbacks since World War Two” in as much as it undermines the UN’s universal sense of multilateralism.
Despite this controversy, the G20 continues to be a forum prized by its members and it is perceived by some to have seized the mantle from the G7 as the premier forum for international economic cooperation and global economic governance. It is now around a decade since the group was upgraded from a finance minister body to one where heads of state now meet too — a move that was then greeted with considerable fanfare, including from the then French president Nicolas Sarkozy when he claimed that “the G20 foreshadows the planetary governance of the 21st century”.
Yet, the forum has failed — so far — to realise the lofty ambitions that some like Sarkozy thrust upon it at the height of the international financial crisis. A key part of failure to deliver on those high expectations is that the G20 meetings have no formal mechanisms to ensure enforcement of agreements by world leaders, which makes it hard to secure sustained traction on issues.
Taken overall, the Hamburg meetings were memorable for the splits shown within the western powers. This and the limited effectiveness of the G20 body itself mean that Germany’s ambitious agenda will not bee fully realised, despite the painstaking efforts of Merkel to find as much common ground as possible in the end of summit communique.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.