G-20 agrees to aim for fair trade without anti-protectionism pledge

01, Jul. 2019

(Pool photo)
(Pool photo)

By Noriyuki Suzuki

OSAKA, Kyodo - Leaders of the Group of 20 economies on Saturday agreed to promote free and fair trade without a signature pledge to fight protectionism for the second year running, amid a U.S.-China tariff war.

Wrapping up two days of discussions under Japan's presidency, they said trade and geopolitical tensions have intensified, committing to using “all policy tools” to support the global economy facing downside risks.

“We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” said their declaration, released after the meeting in Osaka.

Prime Minister Shinzo Abe, who had sought to project G-20 unity, said he tried to find common ground among themselves and send a strong message in a world where conflicts tend to be emphasized.

(Pool photo)

“It's difficult to find solutions at once to various challenges,” Abe said at a press conference. “That being said, the Osaka summit created a big opportunity (for the G-20) to shift to concrete action.”

The statement, however, appeared intended to paper over existing disagreements over contentious trade and environmental issues, leaving the job of charting a path toward solving them to future meetings.

The summit in the western Japan city was overshadowed by a much-hyped meeting on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping.

The two leaders agreed on a cease-fire following months of tit-for-tat tariff hikes that clouded the economic outlook given the intertwined nature of global supply chains. But obviously the truce does not mean a fundamental solution.

The G-20, representing about 80 percent of the world economy, believes international trade and investment are “important engines of growth, productivity, innovation, job creation and development,” it said.

(Shinzo Abe)

The gathering came as they face an uphill battle to keep the group relevant as multilateral arrangements have come under attack by Trump, who decided to pull out of the Trans-Pacific Partnership free trade pact and a Paris climate accord aimed at curbing global warming.

The G-20 left a rift over the 2015 accord, saying that signatories will work toward its full implementation while the United States reiterated its withdrawal decision as it “disadvantages American workers and taxpayers.”

European leaders had stepped up pressure on their G-20 peers. Before the summit, French President Emmanuel Macron indicated he would not agree on a joint declaration that does not mention the accord and European Commission President Jean-Claude Juncker also called for a “strong statement.”

Macron said at a press conference on Saturday that discussions had continued until the last minute, adding his “red line” was not crossed.

Despite the lack of unity over the Paris accord, the G-20 members agreed to reduce additional pollution by the discharge of marine plastic litter to zero by 2050 under what is called the Osaka Blue Ocean Vision.

On reform of the World Trade Organization set up in 1995, the G-20 was also on the same page. The group said “action is necessary regarding the functioning of the dispute settlement system.”

As making economic growth inclusive and sustainable is one of the top priorities for the G-20, Abe stressed the need to distribute economic benefits brought by technological innovation, together with globalization, more broadly and address rising worries that they could exacerbate inequality.

To reap the fruits of the digital economy, the G-20 called for the free flow of data while minimizing risks associated with it through proper rule-making. Taxation in the era of e-commerce was also another key agenda.

The G-20 leaders endorsed a set of investing principles for “high-quality” infrastructure to propel economic growth.

Japan has said the new guidelines for infrastructure development should include elements such as openness, transparency, economic efficiency and debt sustainability.

Demand for infrastructure is expected to increase in emerging economies and experts say securing funding, through more participation by the private sector, is also a key challenge.

Asian powerhouse China's massive projects in low-income Asian and African countries, backed by its ambitious Belt and Road infrastructure development initiative, have raised concerns as a number of them have been carried out regardless of the nations' capacity to repay loans.

The G-20 consists of Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union. (Kyodo)

(Shinzo Abe)
(Shinzo Abe)