Written by Elena Lazarou,
On 7-8 July 2017, the 12th Summit of Heads of State or Government of the Group of Twenty (G20) will take place in Hamburg, Germany. Besides traditional G20 issues, with an emphasis on financial regulation, the focus is on climate and trade protectionism in light of policies recently adopted by the USA.
The German Presidency of the G20
Faced with rising scepticism towards globalisation and multilateralism, Germany’s 2017 G20 Presidency, and its highlight, the G20 Summit in Hamburg on 7-8 July, take place in a particularly politicised and challenging environment. While maintaining a focus on the customary G20 agenda, including global economic growth, international trade, financial market regulation and related issues, the G20 Summit – much like the G7 Summit in Taormina in May 2017 – will place special emphasis on mitigating the harmful effects of globalisation and spreading its benefits more equally. Germany intends to use the presidency to discuss other key global problems, beyond the main issues of economic, financial, climate, trade, employment and development policy, such as migration, refugee flows and counter-terrorism. It aims to promote the themes prioritised during the German G7 Presidency in 2015, such as sustainable global supply chains, access to renewable energy in Africa, improved preparedness for public health emergencies and the fight against antimicrobial resistance.
At the 2016 Summit in Hangzhou, China, the G20 leaders adopted an ambitious communiqué, expanding the G20 agenda. In continuing with the Hangzhou sprit, key items on the Hamburg Summit’s agenda will include:
- Tackling harmful tax competition between countries, and combatting aggressive tax policies adopted by international firms (a priority particularly since the Panama Papers leaks).
- The impact of the spread of digital technology on economic growth. The first ever G20 Digital Affairs Ministers conference was organised in April 2017, illustrating the importance of the issue.
- Health: the Summit will take forward the issues of preparedness to fight pandemics, and antimicrobial resistance. The G20 Health Ministers met for the first time ever, in Berlin in May 2017.
- Suppression of corruption with a focus on measures to improve public sector integrity and the common search for ways to fight corruption in particularly susceptible areas.
- Migration and refugee flows and counter-terrorism.
- Climate policy: Germany will seek to gather the broadest possible support for the Paris Agreement.
- Trade and investment, with an emphasis on supporting the multilateral trading system (including benefits of trade and anti-protectionism); investment facilitation and digital trade.
- Under the Chinese Presidency, the G20 adopted the Action Plan on the 2030 Agenda for Sustainable Development. The German Presidency is planning a ‘Hamburg update’ of the G20 Action Plan, including issues such as defining contributions, and linking the G20 and United Nations (UN) processes with regard to policy coherence and accountability measures. Africa will be a particular focus (see next section).
The G20 is the international forum for economic cooperation on the key issues of the global economic and financial agenda. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States (USA) and the European Union (EU). It was launched in 1999 by the Group of Seven (G7) countries and upgraded to a ‘global crisis management committee’ in 2008. Its agenda has expanded to include issues such as refugees, terrorism, climate, health and development. Since 2008, annual G20 summits have taken place at the level of heads of state or government. The G20 represents approximately two thirds of the world’s population, accounts for 90 % of global GDP and 80 % of total external trade. The next G20 Presidency (2018) will be held by Argentina. It will be the first time this country will host a summit of G20 leaders.
Apart from the leaders of the 20 members, Spain’s prime minister attends G20 Summits as a permanent guest. This year, the German Presidency has also invited leaders from Norway, the Netherlands and Singapore, as well as the African Union (AU) represented by Guinea, the Asia‑Pacific Economic Cooperation (APEC) represented by Vietnam, and the New Partnership for Africa’s Development (NEPAD) represented by Senegal. A number of international organisations regularly attend the G20 meetings, including the International Labour Organization (ILO), the International Monetary Fund (IMF), the Financial Stability Board (FSB), the World Bank (WB), the World Trade Organization (WTO), the Organisation for Economic Co-operation and Development (OECD), and the United Nations (UN). The German Presidency has also invited the World Health Organization (WHO). This year’s summit will mark the first meeting between the US President, Donald Trump, and the Russian President, Vladimir Putin.
Issues to watch closely
The USA and the Paris Agreement
Following his visit to Europe at the end of May 2017, President Trump declared on 1 June that the USA will withdraw from the Paris Agreement and cease its contributions to the UN’s Green Climate Fund, which was established to limit or reduce greenhouse gas emissions in developing countries, but also funds efforts to mitigate the effects of climate change in highly vulnerable societies, in particular, Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African states. In light of the US intention to withdraw from the Paris Agreement, climate change is set to be a particularly troublesome issue. In Hamburg, Chancellor Merkel will seek the G20’s endorsement of a joint Climate and Energy Action Plan re-affirming the standards of the Paris Agreement, but a ‘climate change battle’ can be expected. Experts believe that President Trump is unlikely to veer from his established perspective on climate change at the summit, and that this ‘Trump effect‘ may impact the behaviour of other members. The stance of Saudi Arabia, a traditional climate laggard, and a US ally, remains to be seen. The G20 accounts for approximately 80 % of global emissions. The final report of the FSB (Financial Stability Board) Task Force on Climate-related Financial Disclosures to develop recommendations for voluntary climate-related financial disclosures is also to be presented to the summit.
It is unclear whether the USA will join other members in supporting measures on free trade at the G20 summit; at the G20 Meeting of Finance Ministers in March 2017, US Treasury Secretary, Steve Mnuchin, blocked fellow G20 finance ministers from issuing a joint declaration against trade barriers. German officials have remained optimistic about cooperating with the USA on free trade issues at the G20 summit, however. According to EU Trade Commissioner, Cecilia Malmström, ‘It is worrying that G20 countries are maintaining the highest number of trade barriers. At the upcoming G20 summit in Hamburg, the EU will urge leaders to walk the talk and resist protectionism. Europe will not stand idly by and will not hesitate to use the tools at hand when countries don’t play by the rules’. Most recently, concerns have been sparked by President Trump’s consideration of imposing import tariffs on steel. While the measure comes as a response to steel over-capacity in China, it would hurt EU steel exports significantly, and Commissioner Malmström has stated that the EU will retaliate if European steelmakers were to suffer collateral damage from the import restrictions.
G20 Partnership with Africa
With a view towards promoting sustainable development in Africa, the German Presidency has launched the G20 Africa Partnership to support private investment, sustainable infrastructure and employment in African countries, as well as contribute to the African Union Agenda 2063. The aim of the Partnership is to ‘support related political initiatives of the G20 and facilitate joint commitments (Investment Compacts) between African countries, G20 Partners and International Financial Institutions’. Germany will be proposing ‘compacts with Africa’ for certain countries stepping forward for enhanced investment partnerships.
The EU is a full member of the G20 and takes part in its work at all levels. It is jointly represented at the summits by the presidents of the European Commission and the European Council. Unlike other members, the EU does not hold the rotating presidency and does not host summits. The EU’s participation in the G20 is coordinated by its ‘Sherpa’, currently Antoine Kasel, Advisor to European Commission President, Jean-Claude Juncker. EU leaders met in Berlin on 29 June to prepare their joint position ahead of the summit. President Donald Tusk emphasised the importance of the EU speaking with one voice in the emerging challenging environment, and suggested that the EU will propose a concrete reference to the fight against smugglers in the communiqué.
Read this ‘At a glance’ publication on ‘The G20 Summit in Hamburg: Key issues‘ in PDF.
In the past months, we have published several short inforgraphics on EU trade flows with selected non-EU G20 countries:
- South Africa
- United States
We have also recently published an animated infographic on EU trade flows with major partners.