The G20 summit is expected to be tense, but it may yield clarity

Conflicting goals, frustrations with Trump's policies and rhetoric, Merkel’s activism and Xi’s shrewd negotiating could produce a G20 that generates much more than the usual final photo.

German Chancellor Angela Merkel speaks at a news conference in Berlin, Germany July 5, 2017. REUTERS/Michele Tantussi
German Chancellor Angela Merkel speaks at a news conference in Berlin, Germany July 5, 2017. REUTERS/Michele Tantussi

At summits of the 20 most advanced nations, leaders tend to debate world governance problems, but provide watered down solutions to achieve unanimity. The 7-8 July G20 in Hamburg is expected to be particularly tense.

The world's top leaders, many of whom have already declared that they will not avoid any topic, no matter how thorny, will gather in the halls and corridors of the Elbe Philharmonic. The list of topics to be discussed in this reality show is long: free trade in the Trump era, Brexit and the collapse of TPP, the Paris accords without US participation, the refugee crisis and the fight against terrorism.

Kim Jong Un has put North Korea onto the agenda by launching what is believed to have been an intercontinental ballistic missile. The United States is alarmed, and one of the first reactions of its volatile president has been to criticize China for not exerting sufficient pressure on its neighbor.

At these summits, informal bilateral meetings between leaders tend to be as important as the official sessions, or even more important.

Donald Trump and Xi Jinping

The meeting between the American president and the Chinese Prime Minister will be among the most important and difficult. Xi himself recently complained on CCTV that their relationship has taken a "negative" turn.

Trump has just tweeted that Beijing has failed to curb Pyongyang's nuclear weapons program, noting that 85% of North Korea’s trade is with China. He does not appear to understand that if China cuts off North Korea it could push Pyongyang to improve its relations with South Korea. Its new president, Moon Jae-in, is open to the possibility of bailing out its Northern neighbor’s disastrous economy with an eye to a potential reunification at some point in the future. In addition, if North Korea imploded China fears it would be flooded by millions of refugees.

Trump, has provoked China by endorsing a $1.4 billion arms sale to Taiwan abandoning the traditional US "One China" policy, and by sending a destroyer to Chinese claimed South China Sea island. One consequence will be that Beijing will use this G20 meeting to strengthen its ties with other countries.

Xi Jinping and Angela Merkel

Both China and Germany are eager to fill the void created by the US turn to isolationism and protectionism. "The strategic nature of Sino-German relations is increasingly important," Xi wrote in an opinion piece in Die Welt. "Germany is China’s main trading partner in Europe". In addition, China and Germany are both prepared to play a leading role in fighting climate change. In this new environment many countries are willing to overlook China’s lack of democracy.

China's steel dumping in Europe and the US remains a problem for Germany, although it is unlikely to jeopardize its €170 billion a year in trade with China. Trump in contrast has threatened to take action calling steel a "national security issue."

Xi and Vladimir Putin

The Chinese and Russian leaders met on the eve of the summit, and may have already forged a common strategy to contain Kim that does not involve the US.

Angela Merkel

Recognizing that this will be a "very difficult" summit, the German Chancellor has held eight meetings with other heads of state. In a recent press conference she did not mince words on the issues of climate change and European unity. She affirmed that "The Paris Treaty is irreversible and not negotiable," and that despite Brexit "a new spirit of unity exists in Europe." G20 members together account for about two thirds of the world's population. In addition to the major economic powers, members include Saudi Arabia, South Africa, Mexico, Argentina, Australia, Brazil, Canada, China, India, Indonesia and Turkey -

Merkel, Shinzo Abe and Trump

On trade Merkel has warned that "we will have an intense confrontation within the G20" because "the disagreement is obvious, and it would be dishonest to ignore the conflict." Last week, Wilbur Ross, the US Secretary of Commerce, cancelled his visit to Berlin. If Merkel and Trump meet on the sidelines in Hamburg, will they discuss the German trade surplus and the ban on US meat imports into Germany?

Merkel and the EU have already done an end run around Trump and British Prime Minister Theresa May by meeting with Japanese Prime Minister Abe last week to finalize a Free Trade Agreement between the EU and Japan which they would like to sign this autumn. "Despite the protectionist trend," Merkel said, "we are sending a strong and positive message to the world."

Trump and Putin

The most significant meeting will be the one between the US and Russian presidents on Friday afternoon: a newcomer to diplomacy who loves to improvise will sit down with one of the world’s greatest professional manipulators with years of training in getting what he wants. The two have different goals: Trump is eager to stay afloat and prove that he is a skilled negotiator as he has often claimed. Putin wants to show the Russian public that he can go head to head with Trump and come out on top.

Their discussions could include North Korea, Russian meddling in US and European politics, sanctions against Russia, the Ukraine and the war in Syria. Expectations are very low. Still, Putin needs to distract the Russian people from a tanking economy caused by the drop in oil prices. On the American side, there is consensus among commentators that anything other than total failure will be a success.

Merkel and Tayyip Erdogan

Berlin is angry that Turkey is keeping two German journalists in jail, and has barred the Turkish president from speaking publicly to Turks in Germany. That did not go down well with Erdogan.

One positive: Finance can be a tool to address climate change

Despite all the friction, Mark Carney, the Canadian governor of the Bank of England and chairman of the Financial Stability Board, is clearly satisfied with the results and implementation of research commissioned by G20 leaders in 2015. In addition to contributing to lower global financial risks in the banking system and derivatives markets, the FSB also established a new approach for dealing with climate change. Its campaign to introduce more transparency into how climate change will influence long term global corporate profits has been a success — it is now backed by all of the world's top 100 CEOs, whose corporations have a combined market value of $3,3 trillion.

Governor Carney has been advocating this for years, noting that the rise in global temperatures and unpredictable climate events represent a real financial risk in the long run. Perhaps some G20 participants will find this argument more compelling than scientific data.


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