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The G20 in a changing world: The 2017 G20 Hamburg Summit

The group of 20 meets once a year at the heads of state level. The chair rotates among the members of the group by regions. The country that has the chair of the group is responsible for the organization of the Summit and the meetings at ministerial and expert level. Likewise, the host country works together with the previous and the future presidency of the group, the so-called troika. Currently Germany is the chair of the G-20, last year was China and next year will be Argentina. The presidency of the group has a vital importance because it has the possibility to emphasize and propose new topics of discussion in the group’s agenda.

The Hamburg summit will be undoubtedly the most important that this group celebrates after the summits of 2008, 2009 and 2010 in Washington D.C, Pittsburgh and Toronto respectively, which were intended to respond to the international financial crisis. It was those years when the group became more relevant and was perceived as the coordinating body needed to mitigate the impacts of the global economic crisis. While controlling, monitoring and regulating the financial system in order to avoid a future market crash, a new crisis and also prevent the closure of international trade and a balance of payments war. However, in spite of the importance assigned in those years to the group, it was losing relevance as the United States recovered from the economic crisis and Europe was trying to recover through the European institutions. However, the group continued to work on regulation of the international financial market, coordination of common policies on climate change, development and combating tax evasion.

The current presidency of the group has decided to incorporate the following issues on the agenda: Migration and refugee flows and counter-terrorism. It is no coincidence that Germany, the country that had the strongest position, granting asylum to more than 200,000 refugees, proposes to discuss this issues at the international level. At the same time, the fight against terrorism and its link with migratory flows is under full discussion in numerous international forums

Three interconnected situations make this a very special summit. In first place, it is the first G-20 summit with Donald Trump as President of the United States. Secondly, important elections will take place in Europe, the two most important countries of the Union, in terms of population and GDP, France and Germany as well as Holland and possibly Italy. Finally, the debate on the adverse effects of globalization seems to have a place in the Summit and in the thinking of those who want to stand with process and its continuity in the line of economic and social liberalization.

Shift in US foreign policy and its influence on the G-20

President Donald Trump is revolutionizing global chancelleries. Hundreds of diplomats along with intelligence analysts, psychiatrists, academics and politicians try to understand and decipher which will be the next step of President Trump in foreign and international affairs policy.

Since taking office on January 20 of this year, Trump has made a series of actions and statements that can be understood as a radical change in US foreign policy, undermining the great consensus and post-war agreements.

In terms of international trade Trump’s statements against NAFTA, the withdrawal of the United States from the Pacific agreement and the cessation of conversions on a possible agreement between the EU and the United States breaks with the traditional line of openness and free trade, maintained since the end of the Second World War until now. The designation of Wilbur Ross as Secretary of Commerce, who fiercely opposed to free trade agreements, ratifies this position.

In this matter, the G-20 summit, which has as one of its pillars to promote free trade and avoid a balance of payments conflict, will have a very different climate from that of September 2016 in China, where there was a favorable global consensus on this matter and many others.

The United States was one of the countries that promoted the climate change agreements in Paris in 2016. Trump’s arrival in the White House and his position against it, again generate suspicions about the future of the agreements and therefore the possibility of reversing or at least avoiding the adverse effects of this phenomenon. Nevertheless, the Trump administration cannot withdrawal the treaty for at least four years. However, climate change denialist Scott Pruitt’s nomination to lead the Environmental Protection Agency (EPA) suggests that the United States will not take any concrete action to decarbonize the industry and promote renewable energy.

On this issue the G-20 in China had taken a common position, ratifying the Paris agreements and encouraging their compliance. In fact, the Hangzhou summit was the stage for confirmation of the agreements by China and the United States, the world’s top carbon dioxide emitters. This year, we do not know what the group’s position will be on this issue due to the US policy shift.

NATO and international security will be also present at the G-20 Summit. Within the official agenda of the group, under the umbrella of migration and refugee flows and counter-terrorism as well as the bilateral meetings that will take place in the same scenario in July in the city of Hamburg. There were reassurances of US support of NATO from US Secretary of Defense James Mattis and Vice President Mike Pence at the organization’s headquarters in Brussels and at the Security Conference in Munich last February. Despite the reassurance of support, there is still skepticism within member countries over President Donald Trump’s statements objecting the common defense system and the election of Rex Tillerson as Secretary of State with his well-known and strong ties to Moscow.

Regarding the international financial system, the Trump administration’s announced a review of the Dodd-Frank Act, which regulates the US financial system after the 2008 financial crisis. This situation is also causing some confusion among G-20 members concerning the direction of the US financial and monetary policy. With regard to immigration and refugee policy, Trump’s statements against the actions taken by the European Union, especially by Germany, will be a matter of formal and informal discussion at the forthcoming G-20 summit. Let us remember that it will be the first meeting of President Trump and Chancellor Angela Merkel.

The United States is losing its capacity and leadership as guarantor of universal values. President Trump’s initiative to increase military spending to remain the main military superpower is inversely proportional to its lack of empathy at a global level.

The recent actions and declarations of President Trump are undermining the institutional architecture of post war and the values ​​since. As a consequence, there has been a greater uncertainty among international actors and a more unstable and insecure system.

Elections in Europe

By the time the next G-20 summit takes place on the 7th and 8th of July this year, we will know the result of the elections in the Netherlands and France. We will have a clearer picture of the negotiations and the route for Brexit and the federal German elections will be only a month and a half away. These events will give us some clues about the climate will be like during the course of the G-20 summit.

Nationalistic Populism is flourishing in Europe. After the surprising triumphs of Brexit and Trump, there is an increase fear and concern among traditional European parties that the populist right comes to power and undermines the great project of the European Union. Discontent in France is raising the vote of the candidate of the far-right Front National (FN) party led by Marine Le Pen, who is against the European Union and raises a dichotomy between the elite and the people or between liberal bureaucracies against Populist nationalisms as defined by the political scientist Carlo Invernizzi Accetti in a recent article published in Foreign Affairs. Carlo Invernizzi Accetti emphasizes the possibility that in the next elections, in the second round, two candidates face outside the traditional party system. However, it is very unlikely that Marine Le Pen will be elected president of France as the electoral system forces the top candidates to go to a second round and get the support of 50% more voters. However, the performance of the Front National will give a pattern on the state of the situation in the continent.

On March 15, elections will take place in the Netherlands, the elected parliament will appoint the next prime minister. The nationalistic right, channeled through the anti-Islam Freedom Party (PVV), is increasing its vote intention in a rapid way, despite being one of the countries of the Union with the highest socioeconomic indicators and with a sustained growth of 2% for 2 years in a row and unemployment rate around 5%. There is a very interesting article published in the portal of the Institute for New Economic Thinking about the upcoming elections in Holland and the growth of the right, where it is argued that the macroeconomic numbers conceal a different reality where many Dutch feel excluded, with economic difficulties and therefore are the raw material and the main explanation for the growth of the PVV. Here it is also important to point out that it is very unlikely for the PVV leader to be elected as prime minister of the Netherlands. The multi-party system compels candidates to form a government coalition. Therefore a coalition of traditional parties is more predictable since the PVV – although it is the party most voted – will face great difficulties to find allies in other formations. However, a triumph of the PVV at the elections should call the attention regarding the rise of populist parties and the causes of it.

In Germany, to a lesser extent, the right wing is also appearing through the Alternative for Germany (AdF) party. Merkel’s policy on refugees has created discontent in certain social sectors in Germany. However, the AdF today does not represent a real threat to the German political system. On the other hand, the candidate of the center-left (SPD), Martin Schulz, has begun to have a significant growth in the polls. It has a very interesting reading on the socio-economic situation of Germany, which despite being one of the most powerful and growing economies in the world contains several dissatisfied sectors and an economy that has its foundations in last century.

What seems to be clear is that in Europe, there is a resurgence of movements against the European Union and especially against a globalized elite of which many feel alienated and blame all their misfortunes on the system.

This situation will not go unnoticed at the next summit of the Group of 20 where international governance will be marked by rhythm of national and regional events.

The Dark Side of Globalization

Europe and especially Germany are in a very delicate moment having take over responsibility of the international system and at the same time to calm the outbreaks of populism that could damage to death the great project of the European Union.

What is really generating a great uncertainty in the international arena is not the shift of determined policies by the United States government, but rather that those changes go against the positions created, established and agreed by most of the countries of the globe and led by the United States as a superpower. A multipolar world is systemically unstable and a multipolar world without consensus on universal values ​​is therefore a highly unstable world.

During the next G-20 Summit, the negative impact of globalization will be debated for the first time and discussions will be held on possible mechanisms to integrate a large part of the population that feels excluded from the positive consequences of globalization. This theme of wealth inequality generated by globalization was exposed by both primer minister Justin Trudeau, in an address at the European Union last February, and former primer minister Tony Blair, the launch of his initiative and foundation to avoid Brexit in London at the same time. The common ground of both leaders is on the need to make a self-reflection from those sectors that benefited most by Globalization and to provide real and concrete answers and solutions to those who feel excluded.

The group of 20, the regent of international governance, is going through a very complicated time so it is expected that the maximum aspiration of the current presidency of the G-20 is to maintain the consensus already achieved in previous summits and at minimum not regress.

Rafael Iribarne G-20 Observatory Fundación Embajada Abierta Hamburg, Germany

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