A world order in disarray

Hussein Haridy
Thursday 29 Aug 2019

This year’s G7 Summit was testament to a depth of tensions among major powers rarely seen in recent decades

The scenic resort town of Biarritz, France, hosted last week the G7 Summit for 2019. In 2020, it will be the turn of the United States to host the summit of this group of seven most-industrialised nations. 

Originally, the G7 had been a yearly gathering of like-minded powers to find solutions and reach consensus on world developments on two main fronts: the state of the world economy and how to harmonise policies to boost their respective economies and promote international trade; and secondly, to tackle threats and challenges to international peace and security.

The leaders within the group headed to the yearly summits in the context of a high degree of consensus. If there had been differences in positions or approaches, group leaders did their best to downplay them, at least in public.Furthermore, a great degree of deference among those leaders was quite discernible.

It is no more. 

The Biarritz summit took place in an international context that is uncertain, and the world order itself seems on the verge of changing course radically. Multilateralism is being questioned and globalisation itself is in jeopardy.

The G7 Summit this year happened in a time of great uncertainties as to the direction the world economy would take in light of increasing fears of a world recession next year, with the high costs that would inflict on international trade.

The looming trade war between the United States and China definitely cast troubling shadows on the summit. Twenty-four hours before the arrival of group leaders to Biarritz last Saturday, 24 August, China and the United States became embroiled in a tit-for-tat of China imposing tariffs in retaliation against the United States, and the latter increasing already announced tariffs by five per cent.

Not only that, but US President Donald Trump went a step further in escalating his confrontation with China by calling on American companies working in China to relocate from China, either to return to America or go elsewhere.

This unexpected threat threw everyone off-guard, for no one can tell how far President Trump is willing to go before settling for a trade deal with China that would preserve the interests of both.

And in the case Chinese leader XI Jinping will not budge and decide to wait out the American president till presidential elections in the US next year, when and how will President Trump decide to de-escalate?

All these uncertainties weighed in on deliberations and the results of the summit of the G7 in France. 

European Council President Donald Tusk was right when he warned during his press conference on Saturday, 24 August, that trade tensions between Trump and other world leaders risk throwing the world into recession, bemoaning what he termed as “senseless disputes that had ripped countries apart”.

He went as far as warning that the gathering of the leaders of the seven most-industrialised countries in Biarritz “may be the last moment to restore our political community”.

He came up with a persuasive formula that could be the key to stopping the world from going into a recession next year. He said that, “trade wars will lead to a recession while trade deals will boost the economy.” It was quite obvious who he was addressing in this message.

He also had a warning for the White House. President Trump had previously threatened to impose tariffs on certain French goods in retaliation for the taxes that the French government decided lately to impose on giant American high-tech companies like Google and Amazon.

Tusk made clear in the press conference that if, “the United States imposes tariffs on France, the European Union will respond in kind.”

Moreover, one European official said that “Trump’s combative history” at previous summits was reducing the utility of the gathering at Biarritz and reducing American power as well.

I personally don’t recall such forceful language by senior European officials against the United States. It only goes to show how deep the tensions that have beset American-European relations of late.

However, senior American officials complained that the French presidency focused more on what they called “niche issues”, than the global economic challenges facing member countries in the G7.

They accused the French government of favouring topics that would play well with the domestic audience of French President Macron; for instance, climate change, income and gender equality and African development.

In fact, the summit programme included a session last Sunday on development in Africa, before which the present Chairman of the African Union, Egypt’s President Abdel-Fattah Al-Sisi, gave remarks in the name of African countries on sustainable development in the African continent and the need to reinforce partnerships, present and in the future, with the G7, as well as greater international cooperation in the fight against terrorism.

The same officials had accused Macron’s aides of ignoring American demands to focus the Biarritz summit on national security and a looming economic slowdown.

From their standpoint, the success or the failure of the G7 Summit this year would be measured by how seriously the French president and other European leaders deal with a “weakening economy”.

The Biarritz summit was more about containing conflicting interests rather than finding credible solutions or a workable consensus to challenges facing the world economy and international security.

Still, the French host had a big surprise for the leaders gathered at Biarritz, a surprise that took everyone off-guard. 

On Sunday, 25 August, the Iranian Foreign Minister Mohammad Javad Zarif, arrived in the French coastal town where the summit was held. The spokesman for the Iranian Foreign Ministry Abbas Mousavi, wrote on Twitter that Zarif came to town on invitation of his French counterpart, Jean-Yves Le Drian. The aim of the visit was to “continue discussions about recent initiatives between the presidents of Iran and France”.

The most interesting aspect of this unexpected visit was the presence of the American president and the Iranian foreign minister in the same town after the US administration had imposed sanctions on Zarif, and amid growing tensions in the Gulf between the US and Iran.

The G7 leaders had already discussed the question of Iran during dinner last Saturday and the discussions showed little progress according to officials attending.

President Trump made clear in remarks the following day that he had not discussed a joint approach to Iran. However, French officials insisted a consensus had been reached among G7 leaders that Iran should not be allowed to develop nuclear weapons and that they should work to de-escalate the ongoing crisis.

How to measure the success or failure of the Biarritz summit? Who came out winners and who came out losers?

The main winner is the French president who has become the European champion of multilateralism and safeguarding the “international liberal order”, a sort of European Barack Obama, something that won’t endear him to President Trump.

Another unintended winner, who was not present, was Russian President Vladimir Putin. The Americans, who will be hosting the next summit for the G7, have the intention of inviting him to re-join the group, which is another point of contention between the Trump White House and European leaders within the group.

The success or failure of the Biarritz summit meeting will be determined by developments in the world economy and international security in the next 12 months.

However, judging from what the US Treasury Secretary Steven Mnuchin, said last Sunday on Fox News Sunday, the chances of success are getting lower as far as international trade and the world economy are concerned. He pointed out that President Trump is “determined to have fair and reciprocal trade” with China; therefore, Trump is “as determined as ever” in the trade war.

Next year, when the G7 Summit is hosted by the United States, no one can predict today what the world order will look like.

* The writer is former assistant foreign minister.

 *A version of this article appears in print in the 29 August, 2019 edition of Al-Ahram Weekly. 

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