The Osaka G-20: Some breaking of ice and temporary truce, but no consensus

The 14th G-20 summit, held in Japan (Osaka) for the first time on June 28-29, 2019 will be remembered more for offering a neutral venue for strained partners to meet face to face, exchange handshakes, do some plain speaking, break ice, reach a truce and bring down the temperature rather than build a consensus on the eight themes of the agenda: the global economy, trade and investment, innovation, environment and energy, employment, women’s empowerment, development and health. The meetings on the sidelines between the American President Donald Trump and the Chinese President Xi Jinping; Mr Trump and the Russian President Vladimir Putin and Mr Trump and the Indian Prime Minister Narendra Modi have overshadowed the takeaways of the summit.

The G-20, representing 19 developed and developing countries plus the EU — accounting for two-thirds of the world population, 80 per cent global trade and 85 per cent of global GDP also had the heads of key international organisations: the UN Secretary-General (UNSG) and the heads of the World Bank, the International Monetary Fund (IMF), the World Trade Organisation (WTO), the World Health Organisation (WHO), the International Labour Organisation (ILO), the Asian Development Bank (ADB) and the Financial Stability Board at the Osaka summit. The invited guests included heads of the regional groupings such as the African Union, Asia-Pacific Economic Cooperation (APEC), New Partnership for Africa’s Development (NEPAD), and Association of Southeast Asian Nations (ASEAN) and the Prime Ministers of Spain, Singapore, Thailand and Vietnam.

Evidently, in terms of the political, military and financial clout, the G-20 is a formidable organisation. However, as the political statements emanating from G-20 summits lack the legal authority for their enforcement — they aren’t followed through.

The businessman American President views the world from the prism of America First and erects protectionist walls and uses tariffs as a potent weapon to force other nations to submit to his demands. Before the summit, Mr Trump had tweeted that billions of dollars were pouring in thanks to his tariffs on Chinese goods! But the chief economist of the IMF, Gita Gopinath, claims the world economy has slowed down to 3.3 per cent — some economists attribute this to the economic disruption caused by Mr Trump’s tariff wars.

With Mr Trump hailing his meeting with Xi Jinping “better than expected” — holding back more tariffs on Chinese goods for now — relaxing the ban on American supplies to Huawei and ordering the resumption of talks between the trade representatives (TRs) of the two countries, the world can take a sigh of relief.

While the sanctions on Russia remain, US-Russia relations seem to be thawing, as suggested by the Trump-Putin light-hearted banter about meddling in American elections and Mr Putin’s invitation to Mr Trump to visit Russia.

The Osaka declaration on climate change has gone back to the Buenos Aires formulation: “Signatories to the Paris Agreement who confirmed at Buenos Aires its irreversibility and are determined to implement it, reaffirm their commitment to its full implementation, reflecting common but differentiated responsibilities and respective capabilities, in the light of different national circumstances. By 2020, we aim to communicate, update or maintain our Nationally Determined Contributions (NDCs), taking into account that further global efforts are needed.”

“The United States reiterates its decision to withdraw from the Paris Agreement because it disadvantages American workers and taxpayers.”

Prime Minister Narendra Modi held bilateral meetings with leaders of the United States, Japan, Germany, Saudi Arabia, Brazil, Turkey, South Korea, Australia and Indonesia and pull-aside meetings with the leaders of Thailand, Vietnam, France, Italy, Singapore, Chile and the president of the World Bank and the UNSG. Obviously, he did a tightrope walk by attending two trilaterals: JAI (Japan, America and India) allegedly aimed at countering China’s assertiveness in the Indo-Pacific Region and RIC (Russia, China and India) that opposes Mr Trump’s protectionism, tariff wars and sanctions.

Turkey seems to have escaped US sanctions for purchasing the S-400 missile system from Russia. Keeping in mind India’s determination not to compromise on her national security and buy the S-400 system from Russia, the US ought to offer exemptions and overcome this hump.

The leaders of Brics (Brazil, Russia, India, and China and South Africa) and RIC (Russia, China and India) reiterated their known opposition to unilateralism and protectionism and made a strong pitch for a stronger WTO. Prime Minister Narendra Modi advocated energy security and a rule-based, multilateral international trading system. He also flagged the recession and the need for $1.3 trillion in investments in emerging markets. Highlighting the danger of terrorism, he reiterated his appeal for the international convention against terrorism. He also urged for greater cooperation in apprehending and bringing economic fugitives to book. The Osaka declaration stresses the role of FATF in addressing terrorism and money laundering.

His initiative for setting up an international coalition for disaster resilient infrastructure for facing natural calamities is timely.

Apparently, the discussions on data localisation between Mike Pompeo and Subrahmanyam Jaishankar in Delhi weren’t enough for getting India on board. She refused to sign the Osaka declaration on digital economy launched by Japanese Prime Minister Shinzo Abe with the strong support of US President Donald Trump and signed by 24 countries and groupings. India’s stand received support from South Africa, Indonesia and Egypt.

At the inauguration of the summit, Mr Trump had made it clear that the “US opposes data localisation and policies which have been used to restrict digital trade flows and violate privacy and intellectual property protection.”

According to Vijay Gokhale, the Indian foreign secretary, who briefed reporters after the Brics meeting, India believes that the discussions and negotiations pertaining to data should be held within the context of the WTO as, “Data is a new form of wealth.” The WTO is believed to be framing international rules on digital data.

After his meeting with Mr Modi, the unpredictable US President was effusive about the Indian Prime Minister — in contrast to his earlier criticism of India’s high tariffs, “We have become great friends and our countries have never been closer.” In his tweet, Mr Modi admitted that his talks with Mr Trump were wide ranging, covering “the ways to leverage the power of technology, improve defence and security ties as well as issues related to trade.” India-US trade representatives will meet shortly to resolve pending issues.

The Indian side stressed that they can’t look at Iran purely as an energy source — the stability of the Gulf region, where eight million Indians work, was crucial — instability there impacts India adversely in many ways.

While announcing that Iran has breached its 300 kg stockpile of low grade uranium but hasn’t violated the Nuclear Deal: Joint Comprehensive Plan of Action (JCPOA), Iranian foreign minister Javad Zarif stressed that Iran would reverse its decision if the E3 — UK, France and Germany — fulfil their obligations. Mr Trump warned Iran of “playing with fire”. Though both sides seem opposed to a conflict, their brinkmanship is fraught with the danger of miscalculation that can plunge the entire Gulf region into a crisis. Paradoxically, America’s softer approach to North Korea, which possesses nuclear weapons, might be inspiring Iran too to acquire them.

On 5G, India hasn’t decided to exclude Huawei despite the alleged security risk — she has instead invited American companies to bid for 5G under the Make in India programme. India, as the second-largest market in the world for 5G — with over one billion users — will impact global trends. So,US-India collaboration in the design and technology of the software and leveraging the huge market as a part of Make in India could be mutually beneficial.