Leaders of the Group of 20 (G20) major economies warned of growing risks to the global economy but stopped short of denouncing protectionism, calling instead for a free and fair trade environment after talks some members described as “difficult.”
In a communique at the end of a two-day meeting in Japan’s western city of Osaka, the leaders said global growth remained low and risks were tilted to the downside, as trade and geopolitical tensions have grown.
“We strive to realise a free, fair, nondiscriminatory, transparent, predictable and stable trade and investment environment and to keep our markets open,” they said in a second successive summit statement that refrained from urging the need to resist protectionism.
Japanese Prime Minister Shinzo Abe put on a brave face, stressing that G20 leaders had much in common, such as a shared recognition of the need for the group to remain key drivers of global growth.
“The G20 agreed on fundamental principles backing a free-trade system,” Abe said, adding that the group had also pledged stronger action to improve the dispute-settlement system of the World Trade Organisation (WTO).
In preparing the G20 statement, Japan, the chair of the meetings, has sought common ground between the United States, which opposes language denouncing protectionism, and other nations seeking a stronger warning against trade tensions.
“There were no breakthrough decisions but... all the participants have confirmed their aspiration to work further on improving the global trade system, including the aspiration to work on WTO reform,” Russian President Vladimir Putin told a news conference on Saturday.
“The fact that all have confirmed the need for this process and their readiness to work towards this process is already positive,” he added.
Widening fallout from the US-China trade war has jolted markets and tested the resolve of G20 members to present a united front in averting a global recession.
Following a meeting between US President Donald Trump and Chinese leader Xi Jinping, the US and China agreed to restart trade talks, offering some hope that the world’s two largest economies can resolve their bitter dispute.
Global stocks rose and bonds retreated on Monday after the agreement reached between the US and China, leading investors to bet that a breakthrough between the world’s two largest economies would jumpstart global economic growth.
Trump reportedly offered concessions to his Chinese counterpart, including a pledge not to impose new tariffs and an easing of restrictions on Chinese technology company Huawei Technologies. China agreed to make unspecified new purchases of US farm products and return to the negotiating table.
“It played out as well as possible,” said Hans Peterson, consultancy SEB Investment Management’s global head of asset allocation. “It gives us time to digest and get a bit better activity in the global economy.”
“Any step towards a trade resolution – and it doesn’t have to be a lot of progress – just a step, is viewed very positively by markets,” said Scott Brown, chief economist at Raymond James in Florida. “And investors at this point are trying to focus on the positive in hopes that there will be some trade resolution down the line.”
However, Christine Lagarde, managing director of the International Monetary Fund (IMF), warned the global economy had hit a “rough patch” due to the trade conflicts and urged G20 policymakers to reduce tariffs and other trade obstacles.
“While the resumption of trade talks between the United States and China is welcome, tariffs already implemented are holding back the global economy, and unresolved issues carry a great deal of uncertainty about the future,” she said in a statement.
Last year’s G20 Summit in Buenos Aires was the first to drop language on the need to denounce protectionism, deferring to a request by Washington, which is sensitive to criticism of the tariffs it has slapped on some G20 members.
However, while negotiations on trade barriers proved to be tough among leaders of the world’s richest economies, bilateral talks held by Trump with the leaders of China, Russia and Turkey managed to calm tensions with the three nations.
Another meeting Trump held over breakfast with Saudi Crown-Prince Mohamed Bin Salman, whose country is scheduled to host the G20’s next summit in Riyadh, also managed to bring the young future ruler of the oil-rich kingdom to centre stage after he was shunned in last year’s meeting following the murder of Saudi journalist Jamal Khashoggi at his country’s consulate in Turkey by Saudi agents amid allegations that he personally ordered the brutal killing.
Trump lavished praise on the crown-prince, depicting him as a revolutionary figure who is modernising his country and fighting terrorism, while ignoring allegations of his complicity in the murder of Khashoggi.
Trump portrayed the crown-prince as a reformer opening up a long-closed society, specifically citing more freedom for women. “It’s like a revolution in a very positive way,” Trump told the crown-prince. “I want to just thank you on behalf of a lot of people, and I want to congratulate you. You’ve done a really spectacular job.”
The president also credited the Saudi Royal Family with cutting off aid to terrorist and extremist groups. “All of the money that was going for groups we don’t like has ceased, and I appreciate that very much,” Trump said. “We’ve carefully followed it, we’ve studied it very carefully and you have actually stopped.”
Putin also seemed satisfied with the outcome of his talks with Trump. He said on Saturday that Moscow would do all it could to improve relations with the United States that have been strained by years of diplomatic conflicts over Ukraine and accusations of Russian meddling in US elections.
Putin’s statements were made after meeting Trump for more than an hour, saying the two had discussed issues ranging from trade to disarmament. He also invited Trump to visit Moscow in May next year.
Trump confirmed that Putin had invited him to a ceremony to mark 75 years since Russia’s World War II defeat of the Nazis. “He invited me, and I said I would give it very serious consideration,” Trump told a news conference after the summit.
Putin described the talks in Osaka as a “good meeting, business-like, pragmatic” and said the leaders had agreed that two-way economic ties required improvement.
Putin said he and Trump had discussed the election meddling allegations and the situation in Venezuela. But he gave no details.
However, in remarks made by Trump before starting closed talks with Putin, he gave the Russian leader a blank cheque, saying he had assured him that Moscow would not interfere in the upcoming 2020 presidential elections.
Meanwhile, Turkish President Recep Tayyip Erdogan was all smiles in a news conference in Osaka while declaring that he had heard from Trump that there would be no sanctions over Turkey’s purchase of Russian S-400 defence systems.
NATO allies Turkey and the United States have been at odds over the S-400s purchase, with Washington warning of US sanctions if the delivery took place. The dispute has been a source of concern for investors, putting pressure on the Turkish lira.
The United States says the S-400s will compromise its F-35 fighter jets, of which Turkey is a producer and buyer. Washington has also formally started the process of expelling Turkey from the F-35 programme, halting the training of Turkish pilots in the United States.
But on Saturday, Erdogan said Trump had told him there would be no sanctions over the Russian deal, after Trump said Turkey had been treated unfairly over the move.
Broadcaster NTV on Sunday reported Erdogan as telling reporters that the first delivery of the S-400s would take place within 10 days and that he believed the dispute would be overcome “without a problem”.
However, one major topic of concern to the Europeans that Trump remained unwilling to compromise on was climate change. After much wrangling, the G20 leaders said they “agreed to disagree” on fighting climate change, with the United States dissenting from a commitment to carry out the 2015 Paris Climate Change Agreement.
In a communique at the end of a two-day summit, the grouping said “signatories to the Paris Agreement” had reaffirmed their commitment to its full implementation, referring to the 19 members aside from the US.
The United States withdrew from the Paris pact because it “disadvantages American workers and taxpayers,” the grouping added in a subsequent section, adopting a two-part approach used at last year’s summit in Buenos Aires.
The division reflects tussles over global warming that have repeatedly stymied international forums since Trump pulled the United States out of the landmark accord to limit the effects of climate change.
Even before the summit started, the differences over climate change became apparent when French President Emmanuel Macron said France would not accept a final text that omitted the Paris pact.
In that accord, 200 nations agreed to limit the global average rise from pre-industrial temperatures to below two degrees C (3.6 degrees F). Current policies put the world on track for a rise of at least three degrees C by the end of the century, the United Nations said in a 2016 report, however.
The G20 did manage to agree on tackling plastic trash in the oceans. In the statement the grouping said it had adopted an “Osaka Blue Ocean Vision” that aims to stamp out additional pollution by marine plastic litter by 2050.
There were no details of how the goal would be met, except that members would adopt “a comprehensive life-cycle approach” by improving waste management and finding innovative solutions while recognising the importance of plastics for society.
*A version of this article appears in print in the 4 July, 2019 edition of Al-Ahram Weekly under the headline: Agreeing to disagree