G20 Summit 2018: Waiting for breakthroughs

Friday, 2018-11-30 12:55:40
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Chinese President Xi Jinping (left) and US President Donald Trump (right) are expected to have a bilateral meeting on the sidelines of the G20 Summit in Buenos Aires, Argentina. (Reuters)
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NDO – The G20 Summit 2018 opens today in the Argentinian capital of Buenos Aires. In the context of the emerging trend of protectionism and rising tensions between economic powers, the conference is expected to reach a common voice and create breakthroughs for the global free trade process.

The host country Argentina has proposed three priorities for this year’s G20 Summit, including the future of employment, infrastructure development and food security. However, the issue of global trade and tensions between powers is likely to dominate the agenda of the conference, driving the public to pay more attention to bilateral meetings on the sidelines of the summit. UN Secretary-General António Guterres said that the meeting of the G20 leaders takes place as the world is facing numerous challenges, with the crisis of trust decline and inequality getting more serious, escalating trade conflicts, and increased geopolitical tensions in many parts of the world.

Trade disputes between the world’s two largest economies, the US and China, are predicted to be one of the “hot topics” that cover the G20 Summit. Currently, the international public closely monitors the possible occurrence of a meeting between US President Donald Trump and Chinese President Xi Jinping. If the scenario comes true, this will be the first bilateral meeting between the two countries’ senior leaders since the outbreak of bilateral trade conflicts, which have seriously affected global trade and growth.

Tensions in US-China trade relations have escalated over recent times and there has been no sign of concessions from both sides. The US and Chinese officials have spent weeks preparing for a meeting between the two leaders on the sidelines of the G20 Summit. Ahead of the conference, Chinese Ambassador to the US Cui Tiankai said that Beijing does not want a trade war with Washington, and that a balanced approach from both sides is a motivation and a basis for dialogue and negotiation. Meanwhile, according to White House economic adviser Larry Kudlow, President Trump has left open a trade deal with China but has been prepared to raise tariffs on Chinese goods in case no breakthrough is reached after the meeting in Buenos Aires.

Meanwhile, the International Monetary Fund (IMF) continues to warn that the magnitude of impacts from increased trade tensions on global growth is far more serious than in previously raised concerns. IMF Managing Director Christine Lagarde even portrayed trade tensions as a “poisonous breeze” for global growth, and the rise of trade barriers is an act of “suicide” for all parties concerned.

Earlier, at the Spring Meetings of the Boards of Governors of the IMF and the WB Group in Argentina last April, representatives of the G20 countries acknowledged trade disputes as a threat to global economic growth, but still failed to work out concrete measures to address the concern. As a result, the parties could not issue a joint statement. At the G7 Summit in Canada two months later, the US opposed the conference’s joint statement due to disagreements over trade policies. Most recently, in mid-November, for the first time in its 25-year history, member economies of the Asia-Pacific Economic Cooperation (APEC) forum could not make a joint statement during a meeting in Papua New Guinea, also because of the causes related to trade conflict.

At their first meeting in the US in 2008, the G20 leaders faced the world’s worst financial crisis in more than 70 years. Ten years later, at the G20 Summit 2018, experts have warned of unpredictable consequences if the trade war breaks out. Some even recalled the “grand downturn” related to the tariff war among industrialised nations in the 1930s, which caused the collapse of global trade and created tensions in the years before the Second World War.

It is undeniable that trade disputes are creating enormous challenges for global economic growth. Therefore, under the theme “Building Consensus for Equitable and Sustainable Development”, the 2018 G20 Summit in Buenos Aires is expected by the international community to create breakthroughs, helping to resolve disagreements among countries and facilitate the flow of free and multilateral trade.