G20 Summit in Osaka – The Drought Years of International Cooperation

Photo: Bridge in Osaka at nightThe G20 has been mired in an ongoing crisis for years. After the G20, newly formed ten years ago at the level of heads of state and government, initially overcame the economic and financial crisis more or less successfully, the question quickly arose as to its role beyond reacting to crisis. Instead of taking on a proactive role as a strategic steering committee for the global economy, driving reforms and ensuring the provision of global public goods (such as climate protection and free trade), the G20 proceeded to jump from one issue to the next. The fact that its presidency changes every year has contributed to this ‘issue hopping’.

In the meantime, the G20 is becoming paralysed by a creeping political crisis, fuelled mainly by the disinterest of the U.S. in multilateral cooperation. It is precisely such multilateral cooperation that is needed in order to solve the ever-increasing global problems that know no borders – from climate change and tax evasion to protectionism. Worse still is how the U.S. puts its own national interests first and, in doing so, encourages others to follow suit. It is making successful cooperation between the twenty most important economic nations of the planet increasingly difficult. And this is the fundamental challenge that the G20 must face during the next summit in the economic metropolis of Osaka, Japan, on 28 and 29 June 2019. How can multilateral cooperation be maintained under these circumstances?

Cooperation Breakdowns Could Have Been Avoided

The last two G20 summits, 2017 in Hamburg and 2018 in Buenos Aires, were surprisingly uneventful. This can be attributed to several factors, such as the diplomatic skill of the German federal government, while the ambitions were also scaled back, as was the case during the Argentinean G20 presidency.

The upstream G7 summits also played a role by heading off the force of U.S. criticism and drawing up important lines of compromise. The G7 summit in Taormina, Italy, in May 2017 may have been marked by confrontational discussions, but it did manage to carve out resolutions, particularly in the areas of trade and climate policy, which were also confirmed in the larger circle of the G20. On the other hand, last year’s G7 summit in La Malbaie in Canada showed how unpredictable the U.S. position has become. The summit resolutions were overshadowed by U.S. President Donald Trump’s rejection of the G7 communique, which he tweeted from Air Force One on his way to the next summit with North Korean leader Kim Jong-un.

What remains of the last two years of summit diplomacy is a retreat to the lowest common denominator – such as within the context of trade protectionism – and a search for coalitions of the willing that exclude the U.S. An example of this is the ambitious climate plan that was drawn up at the summit in Hamburg, but was not supported by the U.S.

G20 Minus X Is not the Solution

For some, the last option appears to be a suitable reaction to the unwillingness of the U.S. to cooperate. If the U.S. refuses to provide its support in critical policy areas such as climate policy, then the rest of the G20 states must forge ahead alone. This two-speed policy is also applied at times in the European Union (EU) (in monetary policy, for example) or in world trade organisations (such as with plurilateral agreements). But it is also criticised in these much more formal organisations.

Given the fact that the G20, unlike the EU or the World Trade Organization (WTO), has neither an official mandate, nor procedural rules, nor a secretariat, and as such works on a very informal and ad hoc basis, the broad application of the G20 minus X approach would only further promote the erosion of willingness to cooperate. It could lead to other countries choosing the opt-out solution, and as a result there would no longer be any need to reach an agreement within the G20. It is also important to note that the G20 depends on the support of international organisations in the implementation of its decisions. For example, it is highly doubtful whether the World Bank, whose president is traditionally an American, would implement a G19 resolution without the U.S.

Japan’s Ambitious Pragmatism

Until now, the Japanese G20 presidency has chosen a very pragmatic approach, but is putting forth some rather ambitious topics. In his speech at the World Economic Forum in Davos in January, Prime Minister Shinzo Abe cited issues such as the regulating of global data flows, fighting climate change and reforming the WTO as priorities for the G20 summit. During the preparatory meetings for the Osaka summit, which include a multitude of work groups and minister meetings, Japanese chairs often choose a non-confrontational approach in an attempt to take the interests of the U.S. into consideration. This may not come as a surprise, since the Japanese export industry is also in constant threat of landing in the crosshairs of Trump’s trade protectionism. Playing to the national audience may also be part of it, as demonstrated by all the efforts that went into President Trump’s state visit to the newly enthroned emperor at the end of May.

It is questionable whether, under these conditions, ambitious summit resolutions can be expected that can stand up to the growing global challenges. What’s more, the waters will certainly not be getting any calmer for the G20 in the coming years. Saudi Arabia, largely isolated from the rest of the world, will lead the G20 next year, while the U.S. will have the G7 presidency. After that, the G20 presidency in 2021 will go to Italy, currently a country under a populist government averse to cooperation. It will then be India’s turn in 2022, a country with diplomatic influence but that has also taken a more nationalist turn in the past several years.

Stabilising International Cooperation from Below

Given this background, societal actors such as non-governmental organisations, companies and thin tanks are gaining significance. In the context of the G20 these groups are called „Engagement Groups“. For example, business associations are organised in Business20, non-governmental organisations in Civil20, and research institutes and think tanks in Think20. These groups follow different interests and approaches. While the B20 is particularly concerned with positions from economic and entrepreneurial perspectives, the C20 puts emphasis on the decisions of the G20 with a view on their effects on weaker countries and marginalised groups. At the same time, the T20 does not consider itself a representation of interests, but instead wants to contribute to better decision-making in the G20 through evidence-based analyses.

What unites these different groups, however, is the insight that various global problems can only be solved through more, not less, international cooperation. In the past two years, the B20, C20 and T20 appealed jointly to the G20 to do more for climate protection, for example. More of these initiatives ‘from below’ are needed in order to get us through the current drought years of international cooperation.

 

This article first appeared in Diplomatisches Magazin 6/2019.

Axel Berger is Senior Researcher and Head of the G20 Policy Research Group at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE).

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