What to expect at G20 when globalization faces countercurrent

China Plus Published: 2018-11-27 18:19:33
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Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs."

Ten years ago, when the leaders of the Group of Twenty met in Washington for the first time, they were facing a major task of getting the global economy out of the worst financial crisis in decades. Sincere cooperation and policy coordination among the major economies paid off, with their collective will allowing the world's richest countries to help put the world economy back on the right track.

A meeting of G20 leaders will be held in Buenos Aires, Argentina from November 30th to December 1st. With a theme of "Building consensus for fair and sustainable development", the Summit is due to place development, fairness and sustainability at the forefront of the G20 agenda with a people-centered vision. [Photo: VCG]

A meeting of G20 leaders will be held in Buenos Aires, Argentina from November 30th to December 1st. With a theme of "Building consensus for fair and sustainable development", the Summit is due to place development, fairness and sustainability at the forefront of the G20 agenda with a people-centered vision. [Photo: VCG]

Ten years later, the international community is once again being faced with tough challenges. The global economy keeps growing, but at a slower rate. International trade has begun stagnating. The World Trade Organization is once again warning the growth rate of global trade this year could be outpaced by the global economic growth rate for the fifth consecutive year. At the same time, protectionism and unilateralism have severely shaken the foundations of the global trading order, with a number of emerging markets and developing countries being severely affected. Right now global economic risks and uncertainties are on the rise.

In the light of the current situation, Chinese President Xi Jinping, addressing the recent APEC CEO Summit, pointed out that "Mankind has once again reached a crossroads. Cooperation or confrontation? Openness or closing one's door? Win-win progress or a zero-sum game? The interests of all countries and indeed, the future of mankind hinge on the choice we make." He gave out a reminder that "confrontation, whether in the form of a cold war, a hot war or a trade war, will produce no winners" and that "there exist no issues that countries cannot resolve through consultation as long as they handle these issues in a spirit of equality, mutual understanding and accommodation."

Given these fundamental concerns, the upcoming G20 Summit in Argentina will mainly focus on two areas: global economic governance and climate change.

Global economic governance is primarily concerned with global trade issues. These topics will likely include how countries around the world can stop trade protectionism and unilateralism, continue to promote globalization and maintain the global multilateral trading system.

The core of global trade right now is the World Trade Organization. Making changes to how the WTO operates is considered one of the core issues to be discussed at this year's G20 meeting. Since the United States has repeatedly blocked the judicial appointments to the WTO's Appellate Body over the past year, the tribunal is facing paralysis. An impending retirement by one of the existing jurists next year could completely stop the work of the tribunal, as there will not be enough members on the panel to rule on disputes. This is now a major threat to the normal operation of the WTO.

Chinese Ambassador to the WTO, Zhang Xiangchen, has stated that over the past decade, the hundreds of millions of dollars in agricultural subsidies maintained by the WTO's developed members have remained largely unchanged. At the same time, new forms of business, such as e-commerce, have flourished across the world. But the WTO is not creating any new international norms or standards to address any of these issues. What is even more alarming is the organization seems to be losing effectiveness to rein in the whims of WTO members who prefer unilateralism and protectionism. For all these reasons, the WTO needs changes.

China, the EU and Canada have all put forward their own proposals for WTO reform. However, since the process has not yet started, all parties concerned have different views on various issues. It's expected the G20 sessions in Buenos Aires will be the first step in trying to narrow these differences and expand proposals for potential changes to the WTO's structure.

Meanwhile, one of the most closely watched events will be the meeting between the leaders of China and the United States. As the world's top two economies, any turmoil in the Sino-US economic relationship naturally has an impact on the global economy. A healthy and stable development of the Sino-US relationship not only affects the well-being of the two peoples, but also affects the peace and prosperity of the world. Observers are holding out "cautious optimism" that the two leaders may be able to sign off on - at the very least - a pathway to ending their trade dispute, which would certainly give some solace to the global markets and the broader world economy.

Another major issue to be discussed at this year's G20 meeting is climate change. At last year's G20 summit in Hamburg of Germany, Chancellor Angle Merkel said that because of Washington's withdrawal, the group was unable to reach consensus on the Paris Climate Change Agreement, but the remaining 19 members did unanimously decide that the path is irreversible.

The recent California forest fires have drawn global attention to climate change. Whether this year's G20 summit can reach an agreement on this issue is a cause for concern. According to the Financial Times, a draft statement being proposed for the leaders at the Summit will only briefly mention the Paris Agreement, but will not call for more financial assistance to developing nations to deal with climate change.

Contrary to unilateralism and zero-sum games, the G20 itself is designed to be "multilateral" and "cooperative." Ten years ago, the wisdom of the G20 leaders at that time showed that through cooperation, and not confrontation, the G20 can be an effective venue to help resolve uncertainties and potential risks facing the global economy. So one hopes this same collective wisdom can be revived in Argentina to pull world trade and the global economy back from the ledge.

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of chinaandgreece.com, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.