By Elias Weiss.
This was the way the latest of G20 Summits was always meant to end: not with a bang, but a whimper. The two day summit held annually is an opportunity for the G7 nations to meet up with both emerging and industrialized countries to discuss key issues regarding the global economy. Together, G20 economies represents 80% of global GDP, 75% of world trade and two third of the world’s population. In short, it’s a big deal.
This year the summit was held in Hangzhou, China – the most populous city of Zhejiang Province – although you would be hard pressed to be able to tell that during the summit itself since the city of more than 6 million inhabitants has looked like a ‘ghost town’.
This was the first time a G20 Summit was held in China.
The summit itself started with a bigly protocol incident which – like any good diplomatic crisis – involved a staircase snub, a missing red carpet, a fiery exchange between a Chinese official, a national security adviser on the tarmac and a deleted tweet by the American Spy agency. Yup, 2016 is definitely trolling all of us.
More substantially, here are some of the main topics discussed during the two-day summit:
The G20 reaffirmed, once again, the commitment it made back in 2009 to end fossil fuel subsidies. Earlier this year in May, the G7 also agreed to end government financial support for the oil, gas and coal industries by 2025. Despite the call from investors and insurance companies, the G20 has not agreed on a specific timeline.
According to Reuters, the US was pushing for a 2021 deadline, while India was pushing for a 2031 deadline, arguing that cutting out subsidies on cooking gas or electricity for farmers would end up penalizing the poorest in India. In the end, the G20 countries agreed simply to “reaffirm our commitment to rationalize and phase-out inefficient fossil fuel subsidies that encourage wasteful consumption, recognizing the need to support the poor.”
It wasn’t all empty talk though, as China and the US – the two biggest emitters of greenhouse gas – ratified the Paris agreement in a joint ceremony. As for Canada, we can expect the ratification in the ‘coming months’ according to our prime minister who has to deal with some pushback from certain provinces.
On this file, the G20 recognised (once again) that the ‘forced displacement of people, unprecedented since the Second World War’ was a global concern and that greater ‘burden-sharing’ was critical. According to EU President Donald Tusk, Europe is ‘close to limits’ and called on the international community to ‘shoulder its fair share.’
Organisations like Amnesty International have called the G20 declaration on refugees ‘hypocritical’, arguing that of the nine countries out of the G20 with regular programmes for resettling refugees, only Germany and Canada have shown genuine openness and taken a strong stance in favour of the resettlement of refugees. Both countries have taken more than their fair share (based on size of the economy) according to Oxfam (114% for Germany, 239% for Canada).
Excess steel capacity has been driving the price of the metal down for years now. The culprit? China. The G20 (China included) managed to agree on forming a ‘global forum’ whose goal is to find solutions to deal with the oversupply and low demand of steel in time for the 2017 G20 Summit in Germany.
Both Europe and the US have threatened sanctions against Chinese steel imports if China does not stop its cheap steel dumping ways.
This issue has exacerbated protectionist feelings, especially in India.
It’s the economy, stupid
The International Monetary Fund’s calls for more “forceful policy actions” regarding global growth have been answered, or at least acknowledged.
Indeed, the G20 has agreed that they needed to be less reliant on monetary policy to spur economic growth by being more ‘flexible’ towards public spending in ‘high-quality, growth-friendly investments.’ That said, many consider this ‘growth before austerity’ promise elusive, especially when it comes to Germany who has been resisting pressure from both the IMF and the US to be more open to the idea of utilising fiscal policy tools.
G20 countries have also agreed to communicate the benefits of trade and open markets to the wider public ‘more effectively’ to counter the rising tide of protectionism and anti-globalization feelings around the world.
Not with a bang, but a whimper
Ultimately, this was a fairly typical G20 Summit where countries agreed to agree on deferring an agreement till sometime further in the near future: it remains to be seen if all this talk will lead to concrete action. Hint: probably not.
It is difficult for countries to agree on coordinated efforts on any file in the best of times, but even more so when so many of them are facing major domestic political challenges such as elections, the migrant crisis and brewing nativism. As Christine Lagarde, Managing Director of the IMF has warned leaders of the G20, “It takes political courage to implement this agenda. But inaction risks reversing global economic integration and therefor stalling an engine that, for decades, has created and spread wealth around the globe.”
Elias Weiss studies Neuroscience and Biotechnology at McGill University. A liberal and a passionate believer in evidence-based decision-making, Elias hails from British Columbia but is now a proud Montréaler.