Leaders of the G-20 opened their summit on Friday in Osaka, Japan, which is expected to be one of the most divisive summits in years. Japanese Prime Minister Shinzo Abe opened the meeting, which will be dominated by controversial debates on trade, geopolitical tensions and climate change. Japanese Prime Minister Shinzo Abe has urged G-20 leaders to take the necessary measures to stimulate the global economy. Abe, who heads the G-20 summit, warned of risks that could lead to a global economic downturn. The Japanese prime minister said during his speech at the opening session of the summit,” Trade and geopolitical tensions have intensified,” adding that Japan also wants the G-20 to add momentum to WTO reforms.
Year after year, the G20 summit is gaining increasing interest as it becomes a platform for the gathering of leaders of the top 20 countries in the world in terms of the economic potential and to prevent the superfluous overlapping between the world of economy and politics, political issues are firmly present at the G20 table at its annual meeting. So what is this group, why it was founded and how it works?
The G20 is today a major forum for international cooperation on the most important two global financial and economic aspects fields. The main tasks and objectives of the Forum include coordinating the policy of Member States for economic stability and steady growth, mobilizing the financial system to reduce risks and prevent financial crises, as well as establishing a new international financial architecture. The decision was taken on the establishment of the G20 at the meeting of finance ministers and central bankers of the seven world’s largest economies (Britain, Italy, Canada, the United States, Germany, France and Japan) in Washington in September 1999, and the founding of the group was taken place in December 1999 in Berlin. The main reason to establish G20 is due to the financial crisis in 1997 and 1998, which showed the weakness of the international financial system in the conditions of the globalization of economic relations , also showed that developing economies are not integrated as necessary in the discussion and management of the global economy.
The main format of the seminar’s activity is to hold annual meetings at the level of finance ministers and heads of central banks. And in 2008 , adecision was taken about changing the form of meeting of “G20 group ” and arrange meetings at the level of heads of countries and governments , the group includes 20 countries – the United States, Canada, Mexico, Brazil, Argentina, France, Britain, Germany, Italy, South Africa, Turkey, Saudi Arabia, Russia, China, Japan, South Korea, India, Indonesia, Australia and the European Union.
Today, they account for 66% of the world’s population, 75% of international trade, 80% of global investment and 85% of world GDP. Traditionally, the G-20 summits include its permanent members, five countries and other international organizations. The European Union is represented by the President of the European Commission and the President of the European Council.
Group summits are held in the state that carries out the duties of the group chairman. The group’s main state is changed each year. By 2015, Turkey was the leader of the G20, while the 2016 summit was held in China, 2017 in Germany, and 2018 in Argentina. Japan hosts the G20 summit in 2019. Russia has been at all the G-20 summits since its founding. It also proposed that the issues that were subsequently firmly incorporated into the final statements of these summits should be discussed. Russia headed the G-20 in 2013 and hosted the summit in September 2013 in St. Petersburg.
The members of the group, apart from the European Union, are divided into five groups, each with four States. Only the third group is composed of three countries, which exchange annually and periodically the presidency of the forum.
While groups 3, 4 and 5 include countries from one geographical area, the first and second groups are geographically mixed.
Although all members have the right to chair the forum, when the role of their group is in place, but the rotation of the presidency within a single group is not mandatory. Each group is given the choice of the president it represents, after negotiation among them.
The G-20 runs its own affairs, without the presence of a General Secretariat or its own permanent offices. Rather, each one who presides the presidency of the Group will establish a team of his own, which oversees the organization of the Group’s activities and meetings throughout the year of its mandate, which begins on 1 December and ends on 30 November annually. In order to continue the work of the Group, the tasks of the Chair are given to a troika composed of the current Chairman of the Group and the previous and future Presidents. At the Osaka Summit of Japan in 2019, Japan supports both Argentina, the former host country, and Saudi Arabia, host country of the next Summit.
While all meetings of the group have been confined to finance ministers and central bank governors since its inception, in 2008, following the global financial crisis, the forum has become an annual summit of G20 leaders, attended by heads of state and government and foreign ministers.
In addition to the Leaders Summit, senior G20 officials continue to meet in order to keep abreast of global economic events and address their issues in order to promote the growth of the global economy.
In addition to representatives of the G-20 countries, the annual summit is attended by representatives of permanent guests, namely, Spain, the Association of South-East Asian Nations (ASEAN), the African Union and the New Partnership for Africa’s Development (NEPAD). Also, the host country has the right to invite one country and sometimes more to attend the summit in which representatives of some international organizations, including the International Monetary Fund, the World Bank and the World Trade Organization, are also participating.
In the early years of the G-20, research of it focused on ways to ensure the sustainability of sovereign debt and global financial stability. Over time, the group’s discussions expanded to include research on global economic growth, global trade and regulation of financial markets, as well as other issues such as energy, environment and climate change and empowerment of women.
Although the G-20 is not an international organization capable of making legally binding decisions to its members, its talks have international significance, imposing moral responsibility on them in front of the public.
As the 2019 summit is held in Osaka, Japan, amid high tensions between the United States and Iran at present, the debate within the group on climate change, protectionism and anti-dumping policies is expected to continue, especially with the trade war between Washington and Beijing.
Although the group, at the 2017 summit in Hamburg, Germany, reached a climate settlement in which the Paris climate agreement was preserved while allowing the United States to pursue a different climate policy after its withdrawal from the agreement, the 2018 summit failed in Buenos Aires, Argentina, to reach a global strategy to combat climate change, with Washington’s explicit rejection of this matter.
On the commercial level, the Group’s decisions have also declined between 2017 and 2018. At the summit of Argentina, the group was forced to avoid using the term “protectionist” in its final statement, for Washington to object to it after taking its consent at the Hamburg summit earlier to condemn protectionism
The current G-20 summit is being held amid tense divisions, a tense atmosphere and unpredictable furious fronts in Trump’s positions, especially after his campaign for the upcoming presidential election multiplied by inflammatory statements and positions, but most experts expect a truce between China and the United States.
David Dollar of the Brookings Institution for studies said a “mini-deal” could be reached under which the United States would be slow to impose new customs duties and possibly make some concessions over China’s Huawei Telecom where Washington launches a strict campaign on it in exchange of the resumption of Beijin to buy US farmer products as a goodwill gesture.
But the expert warned that the trade war would see a truce for a few months “may end in disappointment as the divergence seems to be large.”
The president of the Institute for Development Policy Bank, Nayuki Yoshino, said he hoped the two presidents would “calm the fears” that dominate the volatile financial markets as global economic growth slows.
Amid growing tension with Iran, Trump warned Tehran again that Washington was imposing sanctions on it for continuing to pursue nuclear weapons and meddling in Middle East conflicts. He talked about possible war , a “not too long” war with Iran as Russia, China and the Europeans sought to calm the situation. .
In addition to China and Iran, Trump seems intent on not taking into consideration any of his G-20 partners, in the light of his recent, loud statements.
On Thursday, he denounced in his plane, Air Force One, India’s “unacceptable” customs duties, warning India’s Prime Minister Narendra Moody ahead of a planned bilateral meeting in Osaka.
On Wednesday, Trump also called Germany a “failed partner” and accused it of “paying billions and billions of dollars to Russia to buy energy resources, but we have to secure its protection,” before a scheduled meeting with German Chancellor Angela Merkel.
“All the countries in the world are exploiting the United States, it is unbelievable,” said Trump, who is methodically ambivalent in all major international meetings.
The only president that Trump has not yet targeted by an angry glee or a hard-line statement is the Russian President Vladimir Putin, who will also meet him in Osaka noting that the two countries are facing a crisis with Iran.
In this tense atmosphere, Japan, which is hosting the G20 summit, will make a hard effort to get all parties to sign the final statement.
The significance of the statement, which is being negotiated in detail , lies in the diplomatic message it has given, traditionally advocating free trade and reducing greenhouse gases, both of which are red lines for the US president who is taking protectionism and getting his country out of the Paris climate deal.
French President Emmanuel Macron issued a warning ahead of the summit, saying during an official visit to Japan that “if we can not reach agreement in a room of 20 to defend the climate ambition, it will be without France, simply.”
Will the 2019 Summit be able to put an end to the trade war between China and the United States and between the latter and the EU and other countries? Answer depends on the next two days.
Economic Studies Unit
Rawabet Center for Research and Strategic Studies