G-20 Meeting Shines a Spotlight on Global Divisions

Fri, Jul 7, 2017 - 9:25am

Leaders of the world's most powerful economies are converging on Hamburg, Germany, for the annual Group of 20 meeting. The summit, as usual, will provide a venue to discuss issues of critical international importance. But setting this year's agenda apart are the divisions that lately have grabbed the world's attention thanks largely to US President Donald Trump's "America First" policies on trade, climate, and security. Competing forces are trying to rebalance the global order, pitting nationalists and globalists against each other. The fight to change, or preserve, the status quo will pervade the G-20 meeting, both during the main event July 7-8 and as world leaders meet one-on-one on the summit's sidelines.

Trade Atop the Bill

Despite its recent shift toward retrenchment, the United States still occupies a position of power on the world stage and will guide the course of conversation at the G-20. Trade will be a central topic of discussion. As health care and tax reform proposals face congressional and judicial roadblocks, Trump sees trade as a strong fallback option to advance his agenda. The president, after all, has more authority to change US policy over the matter through executive action relative to other domestic issues. A country-by-country review of the United States' bilateral trade deficits reached Trump's desk during the week of June 26, and he may soon start planning to try to reduce the imbalances. Washington's actions to that end will target primarily the other members of the G-20. In 2016, the United States had a combined trade deficit of $667 billion — or 84 percent of its total trade deficit — with its 18 fellow countries in the G-20 (the European Union being the group's 20th member).

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Trump's intention to correct the disparities in his country's trade relationships deviates from those of most other G-20 leaders, who are uniting to promote free trade. But the rest of the group can push back only so far against Trump. Were the United States to impose trade restrictions — for instance on imports of aluminum and steel — its trade partners' only real recourse to oppose it would involve going through the World Trade Organization after the measures' introduction. In the meantime, many countries have worked to highlight the benefits that Washington derives from its relationship with them. Japan, for example, has emphasized the number of Japanese companies manufacturing products in the United States, while other US trade partners have argued that importing steel from military allies doesn't threaten national security.

For major exporters such as China and Germany, diversifying their trade markets away from the United States would be difficult in the long run — and impossible in the short term. The leaders of strongly nationalist countries such as France, on the other hand, may try to use Trump's trade statements to justify their own moves toward more protectionist policies. And other nations will continue pursuing trade deals, including the economic partnership agreement that Japan and the European Union tentatively reached July 5.

Action on the Sidelines

On the summit's sidelines, meanwhile, countries and blocs will hold bilateral talks. Various leaders will use the meetings as an opportunity to demonstrate that they are standing up to the US president. When Mexican President Enrique Pena Nieto meets with Trump, for instance, he is expected to address the particulars of the impending negotiations over the North American Free Trade Agreement, which could begin in the next two months. (Leaders and business representatives in Canada, Mexico, and the United States are still deciding what aspects of the agreement to hash out in the trilateral talks.)

Chinese President Xi Jinping will confer with his US counterpart during the G-20 summit as well, building on the dialogue the two leaders began at their meeting in April at Trump's Mar-a-Lago resort. Though the United States and China have made progress on the action plan that Trump and Xi devised to govern trade, the end of its 100-day period in mid-July will give Washington an opportunity to start ratcheting up pressure on Beijing. The US Department of the Treasury leveled secondary sanctions on several Chinese entities June 29 for their dealings with North Korea, and the Trump administration can implement a range of additional trade measures against Beijing if it so chooses. Even so, the G-20 summit will represent a political victory for Xi ahead of the landmark Communist Party Congress slated for this fall. The Chinese president will attend the event having recently returned from state visits to Russia and Germany showcasing China's role as a champion of free trade and global cooperation when the United States is emphasizing its national interests.

Talking Security

Trade won't be the only issue under discussion during the sideline meetings, though. Trump and Xi will also talk about security matters, from the situation in North Korea to Washington's approval of the first weapons sale to Taiwan in almost two years. Chinese and South Korean leaders, too, will likely meet, giving them an opportunity to discuss deployment of the Terminal High Altitude Area Defense (THAAD) system and Seoul's desire for a softer approach to North Korea. Seoul is hoping for flexibility from Beijing over the THAAD system to keep relations between the two from further deteriorating and to curtail the retaliatory measures from China that already have hurt the South Korean economy. South Korea isn't trying to negotiate the THAAD's deployment, but rather to reassure China so that it may come to accept the system.

Security is also the area in which Washington's relationship with Moscow will take center stage at the G-20 conference. Trump and Russian President Vladimir Putin are expected to hold their first sit-down on the meeting's sidelines. The talks will take place shortly after the US president attends a summit of Central and Eastern European countries in Poland — something Warsaw hopes will broadcast Washington's commitment to the region's security. As tensions rise between the United States and Russia, and as divisions widen in Washington over the countries' future relations, the world will keenly watch to see how the meeting unfolds.

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Even if Trump and Putin start on a constructive note, they will have few opportunities to find common ground. The US president is constrained in his negotiations with Putin since factions back home would rather increase pressure on Russia than compromise with Moscow. Regardless, negotiations over Syria are growing more complicated; the sheer number of parties involved frustrates progress in talks over how to avoid a military accident or conflict in the war-torn country. Negotiations over Ukraine show no more promise, considering the lack of security and political headway in the wake of the 2015 Minsk talks. Putin and Trump could, however, discuss alternatives to the Minsk protocol as US Secretary of State Rex Tillerson suggested in June.

Storms Brew Over Climate Change

Beyond the differing stances on trade and security, the G-20 summit will also shed light on the group's divisions over climate change. The Trump administration's position on the issue has caused contention at previous global meetings. At the G-20 finance ministers' meeting in March, for example, the United States blocked including measures to counter climate change in the final joint statement. The matter promises to be a source of no less controversy at the G-20 meeting in Hamburg.

The Trump administration's decision to withdraw from the Paris Agreement put Berlin in a difficult position — and put the U.S president on a collision course with German Chancellor Angela Merkel. Germany, which currently holds the G-20's presidency, has established itself as a global leader in combating climate change. But Saudi Arabia backed the United States' position at the finance ministers' meeting in March. And this time around, nations such as the United Kingdom, Australia and, perhaps, India will likely opt to avoid confrontation with the Trump administration on climate change, given their strategic ties with the United States. If Germany fails to persuade its fellow G-20 members to include action against climate change in this summit's joint statement, states could start lapsing in their commitments to the Paris accord.

Bracing for Protests

For all the conflicts that could arise in the summit itself, keeping the peace outside the event may prove an even greater challenge. The meeting will be a major target for radical protest groups, which already have carried out several acts of vandalism leading up to the conference. Officials are anticipating more than 10,000 protesters and activists at the summit. The disruptive actions are expected to target the Hamburg airport, routes into the city, and hotels hosting national leaders and delegations.

In addition, pro-Kurdish groups, which have vandalized Turkish targets in Hamburg in recent months, will likely pay special attention to President Recep Tayyip Erdogan's movements during the summit. Hoping to prevent the kind of violence that erupted in Washington when members of Erdogan's security detail attacked protesters in May, the German Foreign Ministry recently forbade Turkish security personnel who "did not abide by the law" from attending the G-20 meeting. Germany also rejected a request from the Turkish president's office for his supporters to hold a rally in Hamburg. Pro-Kurdish groups and anti-Turkey protesters will test the restraint of Erdogan's team and of his local supporters, perhaps causing unrest.

Erdogan's visit to Germany will be his first since Turkish officials rankled various EU countries while campaigning in favor of a constitutional referendum to give Erdogan more power. Turkey's relationship with the European Union has soured since Ankara escalated crackdowns after the July 2016 coup attempt; many countries in the bloc view the Turkish government's heavy-handed response as antithetical to the principles expected from an aspiring EU member. Despite the tension, however, EU officials have softened toward Turkey in recent weeks, and the two sides have discussed expanding their customs union.

The G-20 summit will pit globalists against protectionists, continuing a trend that has been long in the making. Though the United States has been at the vanguard of the globalist camp in previous G-20 meetings, this year it has switched sides. How long it will keep its new position is unclear, but the question and the global issues surrounding it will take center stage in Hamburg.

G-20 Meeting Shines a Spotlight on Global Divisions is republished with permission from Stratfor.com.

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