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Divided G7 an opportunity for Asia and the G20

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Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel, US President Donald Trump and Italian Prime Minister Paolo Gentiloni pose for a family photo during the G7 Summit in Sicily, Italy, 26 May 2017. (Photo: Reuters/Jonathan Ernst).

In Brief

The G7 is falling apart. Russia has been isolated. The United Kingdom has isolated itself. Germany continues a tense relationship with much of Europe. The NATO alliance has been rocked and the future of the European Union remains uncertain.


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The United States appears determined to oppose its oldest allies on climate, trade, immigration and perhaps still on Russia.

Out of chaos comes opportunity. There is an opportunity for the G20, particularly the emerging Asian economies, to capitalise on these divisions, show leadership, break deadlocks and refresh the G20. Most importantly, there’s a chance to make the G20 less G7-centric and entrench the position of the emerging markets in global governance.

Germany needed to find common ground with the Trump administration if it was to deliver an effective G20 summit on 7 July. Infrastructure, investment, multinational tax avoidance, terrorist financing and the impact of automation in displacing workers could all have been fruitful.

But with the summit just around the corner, Germany appears to have failed. Instead of seeking common ground, German Chancellor Angela Merkel has gone on the offensive. Unable to mask her contempt, she has mocked Trump’s speeches as being ‘culturally interesting’. She has quipped that ‘it’s interesting to see the thought environment he inhabits’. She has warned that the EU might not be able to rely on the United States in the future.

As it looks right now, positive progress at the upcoming G20 summit is off the table. The best hope is to limit how far backwards the G20 slides on global cooperation.

A primary appeal of the G20 to leaders is that it delivers them political wins. Used productively, it can help them address global challenges that impact their economies. It can also help them sell a policy domestically, give them a new policy idea, give international context to their problems and bolster their credibility as statespersons on the international stage.

Used unproductively, the G20 can also be used for cheap political point scoring. Rather than cooperation on big global challenges, scarce political capital and media coverage at the upcoming summit could be wasted on petty rivalries. The handshake between Trump and Macron. Whether Merkel gets a handshake at all. Whether Trump and Putin look too cosy. Whether Trump decides to physically push anyone. And whether he walks with the other leaders to the meeting or takes off with his golf cart alone.

The G7 meeting in May was Trump’s opportunity to air his grievances about the United States’ oldest allies. The G20 in July is his opportunity to air his grievances about the emerging market economies, of which he appears to have many more. Unfair trade, currency manipulation, climate hoaxes, immigration, military expansion — President Trump is bringing a long list of complaints to Hamburg.

Far from being a punching bag, the emerging Asian economies need to grab the initiative presented by a divided G7 to benefit themselves and refresh the G20.

The solidarity of the G7 voting bloc was a hindrance to emerging countries’ establishing common ground with individual G7 countries. There is now room for them to manoeuvre on climate change, trade and development. Strengthening relations with France, Germany and the United Kingdom issue by issue is on the agenda. China has already been proactive in vowing to partner with Europe in reducing emissions. While the United States is busy tearing up trade agreements, China and other Asian economies can work with Europe, Russia and the United Kingdom who are desperate for bilateral progress on trade.

Asian G20 countries can give Germany much-needed deliverables in its G20 host year and demonstrate leadership in the process. They can boost the G20’s flailing growth agenda by articulating domestic reform programs to bolster the growth strategy process. The G20 committed to make G20 GDP 2.1 per cent bigger by 2018. Instead, it is currently forecast to be 6 per cent smaller. Asia’s domestic actions on climate change, trade, financial reform and investment can feature in the Hamburg Action Plan and give it credibility on serious structural reform.

Asian G20 countries could bolster their leadership credentials by unilaterally funding G20 initiatives like the Global Infrastructure Hub. They could strengthen the global financial safety net by creating additional currency swap lines and use their regional clout to push for further cooperation between the Chiang Mai Initiative Multilateralization and the International Monetary Fund. China could seek G20 endorsement for the Belt and Road Initiative or, at minimum, have it reflected in the growth strategies and the Hamburg Action Plan.

A divided G7 gives Asia a time to shine. The G20 gives it a platform on which to do it. A strong G20 and progress on trade, investment, financial stability, climate and growth are manifestly in the interests of the global community.

Adam Triggs is a research scholar at the Crawford School of Public Policy, ANU. He was formerly a member of the Australian G20 Task Force.

2 responses to “Divided G7 an opportunity for Asia and the G20”

  1. Very ambitious goals in the context of complex international dynamics, at best. I look forward to reading what the author thinks of the outcome of the upcoming G 20 meeting.

  2. It appears that the G20 meeting may make some real progress in terms of climate change and some other global and international issues, but it may be unlikely to be reflected in the meeting communique or documents, if the US is to veto or pressure others not to have those reflected in their wording.
    It may require extremely high level of creativity in both diplomacy and wording to achieve a highly satisfactory meeting outcome.
    But opportunities do exist for making some real achievements as the author suggested, given the needs for almost all other countries apart from the US (perhaps) to prevent the world from getting from bad to worse in the current very threating environment, even though they may take some time to show.
    One should aim for some real progress.

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