24 July 2019

The G20 Summit in Osaka, more questions than answers

Niculae Iancu

Japan will host the G20 Summit on June 28 and 29, in Osaka. At this year’s meeting, alongside the 19 member states and the European Union, there will also be four other states invited as guests: the Netherlands, Spain, Singapore and Vietnam, as well as high-ranked officials from 13 international organizations, including the UN, IMF, the World Bank, the African Union, OECD and ASEAN.

Image source: Mediafax

The summit tales place during a tense period, which pulsates on all global axes and coordinates. The international system is put under the pressure of an unprecedented economic competition, which paradoxically led to the weakening or termination of some economic, trade and military agreements, bringing it to near-gridlock. It remains to be seen if the meeting of the world’s richest countries leaders and representatives of main international organizations in Osaka will manage to de-tension sensible topics, from global warming and pollution, to the solution for violent conflicts spread throughout the entire world.

The agenda of the G20 Summit

Although G20 self-defines itself as “the main forum for international economic cooperation”, the subjects addressed by the leaders of its member states in the past couple of years outgrew the confines of macroeconomics and global trade. As global interdependencies grew, the G20 involved itself increasingly more in solving political, economic and security problems, such as climate change, energy security, health, the fight against terrorism, migration or the refugee crisis. Together with G7, the elitist group of the world’s most powerful economies, where the international system’s rules of conduct are established, the G20 aims to bring coherence to some of the global economy’s major directions of functioning, in regards to trade and financial mechanisms. Let us not forget that the economies of all of its member states ensure 80% of the world’s entire gross domestic product.

The organization involves an annual rotating presidency system, with Japan exerting this responsibility for the first time. Throughout one year, besides the highest-level leaders’ summit, several meetings take place within various formats, depending on the subjects on their agendas. For example, a meeting of G20 finance ministers and central bank governors took place in Fukuoka on June 8 and 9, which was also attended by Romanian Public Finances Minister Eugen Teodorovici, who led the delegation of the Council of the European Union, as our country was holding the council’s half-yearly presidency.

The Osaka Summit’s agenda contains global themes such as economic growth and lowering inequalities, quality infrastructure and health, climate change and plastic debris in the ocean, the digital economy or the challenges of ageing societies. According to data available in the international press, the summit will be attended by Japanese Prime Minister Shinzo Abe, as a host, as well as US President Donald Trump, Russian Federation President Vladimir Putin, Chinese President Xi Jinping, European Commission President Jean-Claude Juncker and European Council President Donald Tusk.

High-level meeting expected within the G20 Summit

The context of this meeting of the world’s most powerful leaders also offers the possibility of some high-level bilateral meetings. Probably the most expected such meeting in Osaka is between presidents Donald Trump and Xi Jinping. Relations between Washington and Beijing are more tense currently than they ever were throughout the past couple of decades, after the “trade war” between the two states escalated. It also seems that the two leaders will try to find solutions to momentarily suspend hostile actions, under the guise of an “armistice” which would avoid the instatement of new commercial tariffs, as global markets and financial institutions are already strained to their limits, while many specialists are talking about the imminence of a new global economic crisis even worse than the one which happened one decade ago. Negotiation teams are intensely working to pre-set negotiation margins, but it seems that this time China is intent to not cede too much ground. There are many unknowns, and the variables which gathered in the past year seem to outline an extremely complex system of equations, with many determining factors and acres of mainly negative solutions. It could be assumed that meeting can only take place if Washington were to make the first move, showing openness towards relaxing some tariffs and lifting sanctions for some goods considered essential by the Chinese. Especially as it seems that the Trump Administration is preparing to impose taxes for Chinese economy products worth another USD300 million. However, the critical subject is the White House’s blockade on the access of Chinese 5G technology and equipment on Western markets. The Trump Administration pays a lot of attention to a series of sensible political problems faced by the Beijing government, such as the treatment it applies on the Uighur Muslim minority in Western China or its behavior towards Taiwan and Hong Kong.

Equally, an eventual bilateral Trump-Putin meeting requested by the American side and apparently confirmed by Moscow will be a headliner of the G20 meeting in Osaka. Probably the hottest subject on its agenda will be Iran. Major tensions between Washington and Tehran and the persisting premise of a new war in the already exhausted, security-wise, Middle East, is the most discussed topic in current bilateral Russian-American relations, taking into account the privileged relations between Moscow and the Tehran regime. Furthermore, the matter of European security could also be discussed, in the context of both sides concentrating military resources on either part of NATO’s eastern border, the US withdrawing from the INF treaty, competition on the weapons’ markets, collision of energy interests etc. Other subjects of common interest are the START treaty, regarding a reduction in the number of offensive nuclear weapons, Syria, Ukraine, North Korea, Russian meddling in the US presidential elections in 2016 and the evolution of Russian-American relations, currently at their worst in the post-Cold War era.

A meeting between Vladimir Putin and Turkish President Recep Tayyip Erdogan is also predicted, with situation in Syria at the centre of discussions. The Turkish president will also probably give assurances that he will honour the initial agreement regarding the purchase of S-400 Russian missiles, despite virulent opposition from the United States.

Vladimir Putin will also meet with Japanese Prime Minister Shinzo Abe, with regards to the impasse in negotiations regarding the World War II peace treaty and the retrocession of the Southern Kuril Islands, occupied by the Soviet Union immediately following the US nuclear strikes in Hiroshima and Nagasaki. Practically, these negotiations have no starting point, as long as Vladimir Putin has already announced that Russia will not cede the Japanese territories.

A bilateral US-India meeting would also be possible, in the context of the risk for India to lose the commercial privileges it was given by Washington in the previous period. India’s economy could find itself caught in global turmoil caused by the Trump Administration’s current policy to question the efficiency of the international system, and even the opportunity to maintain the same basis for the current global order, outlined at the end of World War II. Furthermore, India is gaining a reputation as a serious competitor for the United States’ global supremacy in the field of artificial intelligence and other disruptive technologies which will govern societies in the future. On the other hand, India has a central place in Washington’s Indo-Pacific strategy, being considered an essential military partner to counter-balance China’s global ascension. In fact, although slow, the warming of relations between New Delhi and Washington resulted in the strengthening of ties between China and Pakistan, India’s great rival, which is manifested in the shape of important economic investments in the Chinese government’s grandiose “Belt and Road Initiative”. In answer, “The United States Support India’s ascension as a global power” and will intensify its bilateral trade relations, especially in the field of energy where, for example, American crude oil exports grew five times last year when compared to 2017.

At the same time, President Trump could hold talks with President Erdogan on several subjects of urgency. Among these is the still undigestible purchase of Russian S-400 missile systems, which has been maintaining all of NATO on alert for some time. In these conditions, American sanctions are unavoidable and there could also be retaliatory measures expected from its European allies. The Turkish administration’s margin of negotiation has diminished significantly, after it lost the local elections in Istanbul to the opposition again. As a result, agreeing in Osaka to a visit of President Trump sometime in July could ensure the Ankara government a moment to breathe, as the Syrian conflict is nearing its conclusion and spheres of influence within the entire Middle Eastern balance of power will be redistributed.

In regards to US-EU relations, no significant discussions are predicted, taking into account the fact the European leaders are at the end of their terms. The Trump Administration will wait for the appointment of a new European administration before it resumes discussions on topics of common interest, despite persisting tensions between Washington and Brussels. These are fuelled, on one side, by the premise of imposing commercial tariffs for the steel and auto industry from Europe, as well as disagreements in a series of international cases on which the West traditionally found a consensus. On the other hand, tensions are also heightened by France and Germany publicly launching the idea of a European Army and by more concrete restrictive measures taken by European institutions in permitting access to for countries outside the EU, to important funds destined for common defence. This includes the EU, despite the fact that it is Europe’s most powerful ally and main guarantor of its security.

What will follow

Although other information regarding the agenda of Chinese President Xi Jinping is not available, we can presume that there will be a series of discussion with European leaders on economic subjects, taking into account the significant increase of Beijing’s investments into spaces near the European Union’s borders, as well the important bilateral trade agreements it has with some member states, which has the potential to split the EU according to some pundits. Italy’s recent example seems to support this assessment. Furthermore, the Japanese press reported a high level of coordination between France and Japan for the Osaka summit, and these types of contacts are probably taking place throughout all possible configurations due to the interests of all G20 members and its special guests.

Despite all of this, there should be no expectation of any significant decisions taken by the sides which will attend the different meetings within the G20 Summit in Osaka. Usually, such meetings are considered more of a “road stop” and aim to harmonize stances on topics which are seen as sensible, in the perspective of future dedicated high-level meetings. Although the lounges next to the G20 forum will be full and the resulting discussions intense, the summit’s final results will probably not surpass the group’s paradigm, with agreements to be established and recommendations to be made for all of the world’s countries, in an effort to maintain the international system’s current course, in a context of major criticism, unprecedented since its formation at the middle of the previous century.

Translated by Ionut Preda