Little achieved at G20 summit

The just-concluded G20 summit at Hamburg will be remembered not so much for agreements reached at the meeting of leaders of the world’s 20 largest economies as for the dramas that unfolded outside it. It was the one-on-one meeting between US President Donald Trump and Russian President Vladimir Putin on the sidelines of the summit and the violent clashes between protesters and police on Hamburg’s streets that drew media attention. The summit itself was not expected to achieve much and it didn’t, given the huge differences between Trump and other leaders on trade and climate change. These were out in the open even during the G7 meeting in May and the G20 failed to bridge the gap, especially on climate change. While taking ‘note’ of the US decision to withdraw from the Paris Climate Change Agreement, the Hamburg Communiqué stated that for 19 countries of the 20-member grouping, this agreement was ‘irreversible’. Not only did it reaffirm the commitment of the overwhelming majority of the G20 to the Paris agreement, which aims at reversing climate change by cutting harmful emissions, but also it underscored Trump’s isolation. Indeed, the Communiqué signalled that the G20 is slowly becoming the ‘G19 plus America’.

On the other contentious issue — trade — the US managed to win concessions. As part of its ‘America First’ approach to trade, the Trump administration has been threatening to impose trade barriers and tariffs on imports that it views as unfair to US companies. This is at odds with the G20’s long-standing opposition to protectionism. While the Hamburg Communiqué said that the G20 would ‘keep markets open’ and ‘continue to fight protectionism’, it recognised that countries could use ‘legitimate trade defence instruments’ to deal with unfair trade practices. On trade, the summit conceded ground to Trump and thus did little to stall the real possibility of his administration unleashing a trade war over steel, for instance.

If in the past it was the US that led the G20, the Hamburg summit signalled that Washington has ceded that leadership, thanks to the White House’s reluctance and refusal to work with other countries. The grouping could, therefore, undergo major changes in the coming months and years. However, its agenda is still focused on making the rich richer. As in the past, the G20 at Hamburg was parsimonious and wrong headed in its help to the world’s poorest. Its ‘Compact with Africa’ is based on the flawed assumption that boosting private investment will automatically alleviate poverty, when what it does is enrich foreign investors. Sadly, the G20 remains disinterested in tackling the real problems of the majority of the world’s population.