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The G20 after Buenos Aires: Continuity and discontinuity

12. Dezember 2018 - 14:00

Positive comments on the G20 summit in Buenos Aires, held on 30 November and 1 December 2018, mostly point to the instances where leaders have reaffirmed positions taken in earlier meetings. But critics underline how little, in their view, this summit has added in substance. They obviously use different standards. This piece takes a systematic look at the roles of continuity and discontinuity in the G20 process, as it presents itself after Buenos Aires. It tries to explain why there is demand for continuity in the G20’s work and describes circumstances under which continuity might still break down.

A comparison of selected G20 texts shows some examples of continuity and discontinuity on the way from last year’s G20 summit in Hamburg to the Buenos Aires summit. Reflections on the extent as well as the limits of the G20’s power to solve problems follow. The piece offers a rough framework to approach questions of G20 effectiveness and closes with some ideas on the way forward.

Why continuity matters

Ensuring continuity matters mostly for reasons outside the G20, there are strong expectations that leaders stand by their previous commitments and even develop them further. This has to do with the G20’s traditional role as an anchor of global economic governance. With rising uncertainty, the group should not be seen as backtracking from agreements economic actors (banks, exporters and importers, regulators in non-G20 countries) depend upon. As countries change their policies, G20 summit language serves as a snapshot showing where there is still consensus and which member disagrees. So there is pressure on all to stay the course.

The 2030 Agenda for Sustainable Development is another driver of continuity. Here, the G20 have made a commitment supporting the implementation of the 2030 Agenda they can only live up to by staying engaged. “Further aligning” all G20 policies with the 2030 Agenda cannot be outsourced to an international organization. It requires the G20 itself to shift towards a more holistic way of working. Given that the 2030 Agenda sets out a long term global path for sustainable development, the shift within the G20 also has to be permanent.

Apart from the G20’s role in the global context, continuity has internal reasons. G20 ministers with responsibilities ranging from trade and investment to health and education find value in ongoing issue specific cooperation within their respective portfolio, most prominently in the finance track, witness the G20 finance ministers’ work on the international tax agenda. A long term cycle of G20 engagement can also be used to showcase an item and raise its political profile. Germany’s G20 presidency in 2017 used this potential in order to highlight global health issues. The interest of former G20 presidencies in keeping the outcomes of the summit they hosted on the agenda inevitably plays a role.

Discontinuity in the G20 – bug or feature?

But discontinuity is also built into the G20 ever since it was established as a leaders group. Its agenda is neither constrained by an institutional mandate nor does it stop at the limits of any ministerial portfolio. Every presidency uses this discretion to raise its profile and pursue its priorities. Just following up on what previous presidencies have introduced will not serve that purpose. This is why the G20 has a new agenda every year. However, to the extent priorities set at an earlier time call for ongoing further steps, active G20 commitments accumulate. The 2017 Hamburg Update compiling G20 actions that contribute to the 2030 Agenda, features 123 items. The 2018 Buenos Aires Update adds 48 more. With this range, it is difficult to expect that leaders’ support is equally robust on every commitment. There may be cases where consensus only means that members have accepted the incumbent presidency’s language, acknowledging a common goal or just as part of a bargain. Not every G20 commitment is necessarily the product of an active, detailed and positive meeting of minds

among all G20 leaders. If conditions for a robust consensus are not met, members may always accept different language proposed by a new presidency. Discontinuity will in fact occur if expectations of continuity do not prevail.

Countries can change their policies. But they cannot entirely get rid of their interdependence with the outside world. Development economics has long tried to capture this tension through the notion of policy space. Today the question is how to reconcile G20 members’ policy space with the group’s capacity for effective collective action. It is a hard question because domestic politics in many G20 countries have not always caught up with the rising levels of global interdependence. Continuity and discontinuity in the G20 is an exact measure of whether this accommodation still works.

G20 language – old and new

Public attention is naturally drawn to the instances where language in the Buenos Aires communiqué substantially differs from its predecessor in Hamburg. Most important are probably the changes in wording on multilateralism and trade. Having underlined “the crucial role of the rules based international trading system” in Hamburg (para. 4), leaders could only bring themselves to “recognize the contribution that the multilateral trading system has made” in Buenos Aires (para. 27), although their Finance Ministers had “reaffirmed” Hamburg language on trade in March and July, and Agriculture Ministers still recognized “the importance of an open and transparent multilateral trade system, based on rules as agreed by WTO members” (para. 23) only four months before the summit in Argentina.

Also, the Hamburg concession “that the benefits of international trade have not been shared widely enough” (para. 3) has turned into a reproach of the system “currently falling short of its objectives” (para. 27). The call for WTO reform, while preserving its substance, has become markedly sharper in tone, from “we will cooperate to … improve … functions” (para. 4) in Hamburg to “We … support the necessary reform” (para. 27) in Buenos Aires. Perhaps most importantly, the traditional G20 pledge against protectionism, balanced in Hamburg with a recognition of legitimate trade defense (para. 2), has now fallen away.

But there are important elements of continuity as well. In Buenos Aires leaders have again confirmed the commitment to “refrain from competitive devaluations” and to not “target our exchange rates for competitive purposes” (para. 4). In addition they agree that “an open and resilient financial system, grounded in agreed international standards, is crucial to support sustainable growth” (para 25). It is perhaps no coincidence that those stable parts of G20 language both originate in the finance track. This may have to do with the high frequency of meetings and the largely technical nature of the issues in the finance track.

“For everything to remain the same, everything must change”

Why did continuity break down on trade? After all the G20 is positioned to manage global economic conflicts and mobilize collective action, even if member counties’ policies change. But some policy changes go deeper than others. The strongest G20 member has now begun to question the incumbent order, putting in doubt either the current rules of the game or the very merits of multilateral cooperation. Its preferred remedies are terminating agreements or pressing for reform, “exit” and “voice” in Albert O. Hirschman’s terminology. Those remedies change the environment of cooperation. Power that was somewhat inconspicuous as long as it was used to work with others, is there for all to see once cooperation stops. Its use is now either to try for self-sufficiency or to force a change in the rules of the game. Either way, cooperation is reduced.

The G20 can solve a problem if all of its members largely agree on what the problem is, witness its management of the 2008 crisis. If there is disagreement on the effects of global interdependence or the merits of the way they have been managed so far, this amounts to fundamentally different perceptions of the problem. For the G20 to operate on it, perceptions will first have to converge. Meanwhile the group will mostly be silent or evasive on the sensitive issues and refrain from shaming a member.

All this might explain why Buenos Aires was widely seen as an occasion for bilateral meetings. With power relationships starkly exposed and collective action partly blocked, it was in fact leaders dealing with each other. But this is definitely not the whole story. The Buenos Aires outcome still features strong elements of collective continuity, from the G20 Partnership with Africa to Health and Food Security.

Role, language and behavior

G20 language is always drawn in two opposite directions: It has to be ambitious or at least continuous, in order to anchor expectations as to the G20’s role, if only to show that there is a working cooperation structure in place when the next crisis strikes. But it must also fit with the G20’s actual behavior, in order to remain credible. From this angle, the G20’s new silence on protectionism might be seen as a due correction, adjusting language to long standing bad behavior.

There is probably a connection between unsolved social issues within countries and waning support for multilateral solutions by those countries. There is also a growing consensus that multilateral collective action can be strengthened if generally social and distributional issues are better addressed. This normally leads to calls for the multilateral system itself to take more distributional goals on board. Inequality for instance is an emerging issue on G7 and G20 agendas. While multilateral groups and institutions certainly have to contribute to an enabling environment for the fight against inequality, they cannot substitute for national governments when it comes to distribution goals at the domestic level. Problems at home should not be offloaded to multilaterals on a wholesale basis. If a country wants the G20 to deliver in terms of its own national interest, it will take responsibility for the G20 and its ability to function. Just blaming the global order for problems you could solve yourself may be good politics. But it will not produce results. The question for the G20 now is whether they can agree on an achievable new state of affairs or whether conflict prevails.

This text reflects the author’s personal views only. By no means does it indicate the official positions of Germany’s Federal Government.

Der Beitrag The G20 after Buenos Aires: Continuity and discontinuity erschien zuerst auf International Development Blog.

The G20 after the Buenos Aires Summit: It’s still relevant!

5. Dezember 2018 - 13:59

The assessments of global summits seem to be measured by new minimum standards, given the current state of international cooperation: The G20 concluded its summit in Buenos Aires on 1 December 2019 without any significant ruptures and with a joint declaration. This outcome was all but self-evident, after President Trump withdrew his consent to the communiqué of the last G7 Summit in Charlevoix, Canada, via Twitter while flying back to Washington. And at the recent APEC summit, the US and China clashed over trade issues and the meeting ended without a joint declaration – usually a diplomatic given. The recent intensification of the tensions between Russia and Ukraine as well as the international outcry against the killing of the Saudi government’s critic Jamal Khashoggi added to the challenges. G20 summitry watchers were therefore all but certain that the Buenos Aires summit could be concluded in an orderly fashion. It is a success for the Argentinian host that it did despite all the headwind.

Meager results

If the biggest success of a G20 summit is that it didn’t collapse, then one shouldn’t expect too much in terms of substantial outcomes. The G20 is struggling to produce the kind of policy outcomes that are needed to tackle global challenges from climate change, migration, to digitalization. In that light, it might seem surprising that the Buenos Aires summit concluded with a commitment to reform the World Trade Organisation (WTO), a deadline for a quota-reform in the International Monetary Fund (IMF) to increase the say of developing and emerging countries and the commitment to implement the Paris Climate Agreement. Yet, the notion of WTO reform means very different things to different G20 countries, the quota reform is long overdue and the US continues to stay outside of the G19 consensus on the need of climate action.

In light of the meager result of the Buenos Aires summit, some commentators, including one of the main public broadcasters in Germany, called to abolish the G20. This, however, ignores important functions of the G20 meetings. Dissolving the G20 would be throwing out the baby with the bathwater.

Five arguments why the G20 stay’s relevant

First, the international political crisis that prevents stronger action is not unique to the G20. In fact, the will to underwrite international cooperation is waning in many corners. In such circumstances we should have more fora where leaders can meet and discuss, not less. They need to engage with each other, even if they cannot reach a consensus.

Second, judging the effectiveness of the G20 depends on the expectations. It sounds far-fetched in 2018, but in a way the G20 has become the victim of its own success: It has been the key forum to prevent the meltdown of the international financial system in 2008 and 2009. However, as the global financial crisis was successfully mitigated, the world turned to new challenges that require strong and much more long term action – just think of climate change and sustainable development. The firefighting role of the G20 during the global financial crisis then cannot be fairly compared with the facilitating role it plays today with regard to enhanced multilateral cooperation on issues such as tax, trade or global health.

Third, the G20 has more layers than the annual summit meetings of leaders. In fact, government officials and line ministers, academic experts as well as business and civil-society organisations are meeting regularly in between the summits building up international networks of expertise, communication and trust that are key as a basis for international cooperation.

Fourth, the G20 is reflecting the changing power structures in the world economy. This is not a club of like-minded countries. It does include difficult partners – and needs to do so! Besides Europeans and its increasingly difficult partner USA, important emerging powers are sitting at the table. There are more stakeholder in the international system nowadays than 20 years ago, which makes discussions more complex. And this makes the exchanges ever more important! The future task to integrate African representation, beyond South Africa as a formal member, would help to reflect the growing importance of the continent, even if this would add further complexity to deliberations.

Fifth, and lastly, even if the G20 summit at times rather seemed like bilateral “speed-dating” between world leaders, it is good to have such a forum. It will be better when acting multilaterally – specifically if worst comes to worst and another financial crisis hits the global economy. But meanwhile, it keeps the communication going and ideally builds some mutual understanding, if not trust, between key global actors.

No sitting back

Overall, the G20 is far too important for us to allow it to go into hibernation and have the nationalists have their own ways. The G20 forces key actors to engage with each other regularly. Its engagement processes like Think20, Business20 or Civil20 can do more to communicate to the broader public what the G20 has achieved. Yet, such a communication also needs to reflect the peculiar nature of the G20 as an informal forum without a mandate or secretariat, operating on the basis of annually rotating national presidencies. There are limits of what the G20 can do – and what it should do.

Japan took over the annual presidency from Argentina on 1 December 2019. It should not shy away from putting thorny issues on the agenda, such as support for multilateralism in trade, sustainable development and climate action. The exchange on these issues is needed, and it is needed amongst the key actors assembled in the G20, too. On a number of major global challenges, we need common understanding and agreement on actions. And we can only establish this common ground by continuous discussions, particularly in difficult times.

Der Beitrag The G20 after the Buenos Aires Summit: It’s still relevant! erschien zuerst auf International Development Blog.

International Economic Cooperation in Troubled Times: A Call for Strong Action by the G20

26. November 2018 - 12:00


The leaders of the G20 will meet on 30 November and 1 December in Buenos Aires for their annual summit. They need to acknowledge that the last two years have been characterized by strong headwinds for the world economy. This time, however, it is not a mixture of poor macroeconomic policies and bad business decisions – as in 2008 when they met in Washington for their first summit – that endangers the well-being of billions of citizens around the globe. This time the threat stems from deliberate political decisions, in particular on trade.

The danger emerges from an unholy trinity of insufficiencies in the trade book to address persistent trade distorting practices in major players, primarily with respect to a revival of mercantilist ideas, populist governments championing economic nationalism and uncompetitive advantages of State Owned Enterprises (SOEs). The climate of cooperation has given way to beggar-thy-neighbor-policies on trade, investment and tax. The G20 trade ministers’ meeting in mid-September in Mar del Plata concluded with a plea to modernize the World Trade Organisation (WTO), however, without providing guidance where this path of reform should lead to. In fact, G20 countries differ substantially with regard to the main deficiencies of the system and in turn solutions for reform. Individual governments know the virtues of the multilateral economic order, praise it if it appears appropriate and at the same time act against this order by pursuing narrow national interests. Whether or not such actions are responses to other countries’ actions, they contribute to an erosion of the multilateral order.

The G20 summit in Buenos Aires presents an eleventh hour opportunity to stop or at least mitigate these destructive forces, by taking strong action in favor of an open and rules-based system multilateral cooperation on trade, investment and tax matters.

Key reforms on trade

Unmistakable evidence demonstrates that G20 members routinely violate their “no protectionism” pledge. The scale of trade affected should concern senior officials: by March 2018 over 80% of G20 goods exports competed against trade distortions implemented since November 2008 that were still in force.

Concerns that the current G20 approach does not address the full range of policy intervention that distort 21st century commerce should be addressed by leaders taking two steps: expanding the scope of the G20 protectionist pledge and calling for upgraded monitoring that goes beyond conventional barriers to trade and doubles down on efforts to track new barriers across all sectors of the economy, including the services sector. Rather than engaging in another fruitless debate about what constitutes protectionism, an approach based on the principle of non-discrimination should be pursued that condemns any protectionist policy intervention.

That said, while overwhelming evidence establishes that overall nations gain from trade, there are disruptions through trade that need to be addressed. While many gain from trade, import surges have sometimes undermined the economic viability of whole communities.

Gradualism in trade liberalization combined with preemptive measures to strengthen competitiveness, can help mitigate such trade adjustment costs. Displaced workers are best helped using generally applied safety nets, not those specific to trade, as trade shocks are only a part of the economic uncertainty affecting workers. International coordination is required to support an open and predictable trading system under the World Trade Organization (WTO), as the greatest future source of trade shocks could be protectionism, not trade liberalization.

In addition, there are major challenges for the governance of the digital economy and digital trade. Rule-making processes currently in course, such as those at the WTO, need strengthening. Such attention also needs to effectively address the risks of a widening digital divide in particular in the Global South. The G20 is best placed to provide direction for global governance actions that address the multifaceted relationship between digital technologies and trade, the digital divide, and the incorporation in rule-making and implementation of distributive ledger technologies and artificial intelligence, among other strategic trade related issues. These issues comprise international cooperation, digital connectivity and the need for liberalization and facilitation of trade in goods and services.

The G20 should reaffirm the facilitating role of the WTO in global governance on digitally-enabled trade, and suggest a WTO Facility on Digitally-Enabled Trade as a focal point to initiate information-sharing, cooperation, and coordination among international agencies related to digitally-enabled trade. A strengthening of aid for trade and other forms of technical assistance to low income countries is key to bridge the digital divide.

Cooperation in tax matters is crucial

The world is facing a new round of international tax competition that may result in a ruinous race to the bottom, undermining the fiscal capacity of states to respond to global challenges and to implement the Agenda 2030 for Sustainable Development. G20 leaders must take action to strengthen multilateral and cooperative approaches to taxation, curtail harmful tax competition and protect their own tax base as well as that of developing countries.

Governments use tax expenditures to boost investment, innovation and employment. However, these schemes are largely opaque, costly and often ineffective in reaching their stated goals. In order to improve the performance of these tools, first, G20 governments should increase transparency on tax benefits. G20 members should for example take the lead on this with frequent and comprehensive tax expenditure reports. Second, G20 governments should improve the design of tax incentives with the aim of minimizing the generation of windfall profits and negative spillover effects within and across (in particular, on poorer) countries. Third, G20 governments should phase out tax expenditures that are environmentally harmful, including tax incentives for fossil fuels and other schemes that promote an unsustainable use of natural resources.

Fourth, a priority of the international community is how to best address the tax challenges of digitalization within the current framework of international taxation. G20 leaders need to work towards a joint framework of value creation in the context of digital business models and to promote international agreements on the treatment of economic activities based on digitalization, rather than engaging in short-sighted unilateral action and protectionist policies.

Investment policy reforms

It is of paramount importance that the G20 pay attention to the mounting challenges facing the international investment regime, a regime that regulates an activity that is more important than trade in delivering goods and services to foreign markets and integrating these markets.

This is all the more important because international investment is crucial to advance sustainable development, especially in developing countries. For both immediate and long-term reasons, investment policies should, therefore, be a core item on the agenda of the G20. The G20 should therefore continue its important work on international investment policy reform and initiate steps to operationalize the Guiding Principles for Global Investment Policymaking adopted during the Chinese G20 presidency in 2016. Also, the G20 should support ongoing WTO discussions on investment facilitation, suggesting that investment facilitation discussions should not only aim at facilitating more FDI, but sustainable FDI. The deliberation of a set of Guiding Principles for Global Investment Facilitation may provide overall guidance for the discussions starting on investment facilitation at the WTO.

Long-run Perspective

We realize that a number of these proposals, submitted by the T20 Task Force on Trade, Investment and Tax Cooperation to the G20, require actions that go beyond Argentina’s Presidency. However, they are in line with the desirability that international trade, investment and tax issues constitute a core item on the agenda of the G20. It is up to the G20, which describes itself as the premier forum for international economic cooperation, to take the lead in advancing these reforms.

This article is based on the policy proposals put forward to the G20 by the T20 Task Force on Trade, Investment and Tax Cooperation which brings together more than 100 researchers from nearly 80 think thanks and universities representing 14 G20 countries. The Task Force is co-chaired by Axel Berger, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Christian von Haldenwang, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Raul Ochoa, Argentine Council on Foreign Relations (CARI), and Ricardo Meléndez-Ortiz, International Centre for Trade and Sustainable Development (ICTSD).

Der Beitrag International Economic Cooperation in Troubled Times: A Call for Strong Action by the G20 erschien zuerst auf International Development Blog.

The G20 @ 10 conference: Assessing the benefits, limitations and the future of global club governance in turbulent times

19. November 2018 - 15:58

In Buenos Aires on 30 November and 1 December 2018, the G20 is having its 10th anniversary as a summit format at the leaders’ level. On 14 and 15 November 2008, this previously-obscure group of finance ministers and central bankers of the nineteen most “systemically relevant” countries and the EU was transformed into a forum for international leaders to meet with a view into the abyss of the global financial crisis that originated in the US and spread fast across the world. Ten years and 12 leaders’ summits later, the G20 has moved beyond its 2008-09 role as a crisis-management forum and became the self-described “premier forum for […] international economic cooperation.” In this capacity it is now facing new demands to tackle global challenges such as climate change, digitalization and pandemics. As its agenda has expanded and the urgency of the crisis fades, the G20 faces questions regarding its relationship to other formal institutions of global governance, such as the United Nations, its effectiveness in dealing with global challenges as well as its legitimacy and accountability vis-à-vis its people and the 174 non-members.

At the G20 @ 10 Conference, organized by the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), together with Chatham House and the Shanghai Institutes for International Studies (SIIS), we took the occasion to reflect on the role of the G20 in its tenth year of summitry from both academic and policy-making perspectives. The conference brought together researchers of various disciplines, high-ranking government officials and experts from international organisations representing a broad range of G20 and non-G20 countries.

Looking back

One of the purposes of the conference was to take stock. There are quite a number of policy areas where the G20 achieved results fall short of its ambitions. A prominent example is the anti-protectionism pledge adopted during the crisis, which may have been successful in averting a trade-war in 2009, but was never adhered to as rigidly as the language implied, and in 2017 was removed from the annual communique entirely. Yet, the G20 has achieved significant policy successes, beyond their crisis-management role in coordinating large stimulus packages and regulating financial markets. The G20 has helped to bring about the Base Erosion and Profit Shifting (BEPS) initiative to prevent the eroding of tax bases, installed an agriculture market information system with a view to reduce food speculation and helped to build a consensus on the need to reform international investment policies to facilitate investments. Above all, the G20 has become the most visible forum for integrating rising powers into the global governance framework, and acknowledging the fundamental shifts in global power in a way that institutions such as the G7, UN Security Council and IMF were either unable or significantly delayed in doing. The G20 has also developed a structure of engagement groups and observer statuses that allow it to engage with non-members and societal actors such as business, labour, non-governmental organisations and think tanks.

Legitimacy of the club

One of the core debates at the conference evolved around the very legitimacy of this “club” and how it was derived. While the G20’s policy outcomes were undoubtedly helpful in immediate response to the global financial crisis, the current mandate to undertake action on the broad range of current global challenges is significantly less clear. The annual rotating presidency of the G20, has led to a proliferation of policy initiatives being adopted at the leaders’ summits, waiting for follow-up during subsequent presidencies. However, it is not clear the extent to which this format creates peer pressure to deliver on these relevant policy challenges, or diluted the ambition of the proposals. Additionally, the transmission mechanism to expand these policy innovations beyond the G20 was often either unclear or depended simply on leveraging the G20’s bias towards ‘bigness’ at the expense of non-members. Conversely, some voices suggested that the peer pressure mechanism may be especially effective in motivating emerging countries, incentivizing them to “present something” during global meetings such as G20 summits in order to be accepted as truly global players.

Legitimacy might also be provided by the (supposed) efficiency of its informal format for deliberations. This is an oft-repeated argument in debates about the club governance, in particular in contrast to the UN system with its 193 members and a vast number of sub-organisations. However, the G20 process is increasingly institutionalized too, calling into question its advantage of informality and agility. For example, in preparation of the Buenos Aires Summit at the end of this month the Argentinean host counted more than 50 meetings including finance ministers and central bank governors, Sherpa’s and finance deputies, line ministers and delegates of various working groups. Some conference participants, therefore, argued that the G20’s agenda should be reduced to the items that leaders find relevant and want to actually talk about in a kind of informal “fireplace chat”. Others stressed that the value-added of the G20 as a group of major economies should be on “actions” setting examples for others.

Furthermore, can the G20 still bank on its efficiency with a highly reluctant US government at the table? A term often used during the conference was that of “G19+1” as a makeshift in highly contentious policy areas. However, an increasing number of G20 members are leaning towards my-country-first policies, and the weakening of the importance of the unanimity of the comminque may weaken the effectiveness of the whole institution, as it would open the door to more G 20-minus-X coalitions with increasingly large X’s. It is far from clear why reluctant members would come back in line with the rest of the G20 once this principle is breached, while at the same time undermining the G20’s importance in issues where global cooperation is necessary for success such as how climate change can be avoided. The fate of the G20 as an effective forum in this my-country-first environment therefore remains an open question.

The G20 as a governing system

An alternative view discussed at the conference was the increasing formalization of the G20 as a governing system, with additional deliberations at working-group level and in an increasing number of “outreach groups”, such as Labour20, Women20, Business20, Youth20 or Science20. The Think20 in particular, a network of think tanks that provide policy advice for the G20, was discussed as a particular forum of transnational deliberations which might provide a more rigourous source for globally-accepted evidence-based recommendations that would be harder for leaders to ignore.

However, to actually serve this purpose to hold the G20 to higher standards, the Think20 needs to further professionalise its research and policy analysis process and increase the incentive for more high-ranking think tanks and experts to participate and engage thoroughly in the process. Furthermore, in particular in light of the demands of the Agenda 2030 for Sustainable Development, breaking up silos is not only necessary for the G20 and its work streams but also for the Think 20 researchers which also often still work exclusively in topical areas and do not mingle across disciplines.

As a sub-grouping of sorts, the T20 Africa Standing Group was discussed as a specific forum of transnational interaction, where G20 and African think tanks discuss the impact of the G20 on the African continent, both the G20’s dedicated actions and the unintended consequences of its (in)action on certain matters relevant to the continent’s development. While recent initiatives of the G20, such as the Compacts with Africa, were considered a step up in G20 engagement with Africa, it was highlighted by several speakers that African concerns are not separate from other workstreams across the T20, and it is unwieldy for these concerns to either be dealt with separately, or advocated disproportionately by South Africa, as the one African G20 member. One speaker highlighted the need for African leaders to engage more with the G20 and other international fora with the words “If you are not at the table, you find yourself on the menu (of deliberations)”.

The next 10 years

Summitry might have its shortcomings and can be mocked as a mere photo opportunity. Yet, however imperfect the setting of the G20: the continued dialogue amongst the largest economies and various bilateral meetings at the occasion of G20 summits seem to make the setting useful for policymakers – and for analysts who engage with global governance. The G20@10 conference aimed at building on the success of the Think20 by offering a space for researchers to engage with each other and policy makers. We indeed saw the exchange as stimulating and aspire to continue the exchange on a number of aspects of the G20 and its engagement with and role in global governance.

Der Beitrag The G20 @ 10 conference: Assessing the benefits, limitations and the future of global club governance in turbulent times erschien zuerst auf International Development Blog.

The possibility of global economic governance in a period of great power rivalry

14. November 2018 - 14:00

A structural shift is underway, running much deeper than the so-called trade wars that have been triggered by the US administration. Evidence of this trend starts to abound. In the past months, measures have been taken in places such as the US and the EU which will discourage the inflow of certain foreign investments, global companies have been induced to restructure their supply chains following geopolitical considerations and an increasing number of countries have been dismissing infrastructure projects with foreign funding.

These events defy the rationale that has underpinned economic relations for the past decades. We expect countries to go to great lengths to attract foreign investment, that global supply chains are structured across the world according to cost-effectiveness criteria, and that funding for needed infrastructure is received with open arms.

Welcome to globalization in the age of great power rivalry.

This age seems to be defined by the US-China dispute for the (re)organization of the global economy. It has much more to do with the control of strategic assets —technologies such as artificial intelligence, key inputs such as energy sources for electric vehicles, and command over connectivity, physical and digital— than with moving goods globally. This dispute is creating ripple effects, as witnessed by the debates in the EU on the establishment of an investment screening mechanism.

 A new normal in global politics?

We are witnessing what might be the first steps in a new stage of globalization. Still, some of its features are becoming gradually salient. Prominent among them is the assertiveness of states in trying to unilaterally reduce or manage in some way their exposure to the interdependence underlying the global economy. Thus, for instance, governments increasingly tighten control of mergers and acquisitions or public procurement bids with the purpose of inhibiting access of foreign firms to crucial technologies. Additionally, the internet, once hailed as a space deprived of borders, is now fraught with digital fences that suggest the rise of spheres of influence for both strategic and non-strategic purposes. Finally, states seek to enlist private companies in the pursuit of strategic, non-market-oriented, goals.

Even when supported by carve-outs in international rules, such as national security exceptions, a different game is underway. It is playing out in an arena that merges economic and strategic elements and employs different assumptions from the ones we grew accustomed to observing in economic relations until now.

These events put global economic governance under strain. It is telling that most of these shifts are taking place outside the existing global governance settings, such as the WTO —with the notable exception of the debate on the measures applied by the US under Sections 232 and 301.

Challenges to a new global economic governance

Yet, for all their shortcomings, the institutions, rules and processes that shape global economic policies have provided a sufficient degree of stability and widespread benefits for all countries, albeit unevenly distributed. Can global economic governance continue to perform this role?

The possibility of global economic governance hinges on its capacity to adapt to persisting, current and future challenges, as detailed below. It will need to be a different governance. But, as Amrita Narlikar rightly points out, there is a “demand for a re-thinking and re-negotiation of globalization”. This demand will need to be met.

Firstly, one of the most immediate challenges is precisely the clash between the two types of capitalism that underlies the US-China rivalry. To be sure, state capitalism has existed for long and, while it has gained more visibility in the aftermath of the 2008 financial crisis, it is particularly the Chinese state-led model that has been singled out as a reason to update a number of economic rules.

The conflicting views of US and China were on display at a recent WTO General Council session, where the US Ambassador charged that “China has not been moving toward a fuller embrace of market-based policies and practices since it joined the WTO in 2001.” In response, the Chinese Ambassador stated that “China has been vigorously exploring a road of market economy which suits China’s own national situation and circumstances (…)”.

This is a critical debate that begs the question on the need to adjust the current trade rules. Are they balanced and effective? Will a solution be possible at the WTO?

A second, and persistent, challenge is that of inequality —both across and within states. Global economic governance still lacks a proper response to it. It raises the legitimate question of whether the rules as they stand cater to the interests of the majority of the population or of a small number of actors well-equipped to lobby their governments. This is not a new a question, as a number of developing countries have been contesting what they consider unbalanced rules in areas such as patents for pharmaceuticals and investment protection – not to mention agricultural subsidies provided by rich countries.

This brings forward the third challenge to be addressed by global economic governance: inclusiveness. Although the relations between the US and China will necessarily be a key factor in understanding the future of the global economy, the world is likely to become even more multipolar than it already is. Decision-making in global economic governance should also be multipolar. The upgrade of the G20 to a forum at the highest political level is an example in this direction. It would therefore be an unfortunate step backwards to believe that fundamental debates —such as the WTO reform— should be dealt with as if the world still revolved around a small number of developed countries plus China.

The emergence of great power rivalry, such as the recent US-China trade war, does not remove from the table the need to address concerns with inequality and inclusiveness as conditions for the persistence of global economic governance.

Finally, global economic governance should be able to provide responses to the challenges that begin to emerge from the digital economy. The dissemination of many of its applications —e.g., artificial intelligence, 3D printing and big data— is likely to bring about considerable disruption to the global economy, in particular for developing countries that have joined global value chains as providers of cheap labor.

A different global economic governance

In sum, there is no shortage of challenges. What seems to be elusive is a consensus to update and reinforce global economic governance. It will take leadership to confront both the domestic discontent with globalization and the great power struggle we witness. But if recent history serves as an indication, the establishment of the G20 as a forum for world leaders shows it is possible to shape up to collectively address problems of a global scale.

The persistence of global economic governance is by no means a foregone conclusion. An alternative scenario is that we see the emergence of spheres of influence on certain issue-areas, where actors with power to go it alone opt for dismissing any multilateral solution.

It is not only possible but highly desirable to have global economic governance. But it will likely be a different type of governance, and we should be ready to embrace it. The alternative of a fragmented order is hardly a better option.

The views and opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the positions of the Government of Brazil.

Der Beitrag The possibility of global economic governance in a period of great power rivalry erschien zuerst auf International Development Blog.

Digitalisation and exponential technological Change: Challenges and Opportunities

8. November 2018 - 14:00

The word digitalisation is on its way to become a buzzword that is not only used by techies but also by development professionals around the world.  Just two years ago, in 2016, the World Bank devoted the World Development Report (WDR) to Digital Dividends, referring to the distribution of digitalisation benefits to a broader population. The WDR suggested inclusion, efficiency, and innovation as the main mechanisms through which digital technologies can promote development.

The potential is enormous and covers a plethora of sectors, from finance, industry, and agriculture, to education and political participation. However, is digitalisation the panacea to achieve a broader set of development goals such as those included in the Agenda 2030? The answer to this question depends on which drivers underpin technological change.

Digitalisation vs. Exponential Technological Change

The concept of technological change is much broader than digital change or digitalisation – i.e. converting information in ways that are readable by a computer and usable for intelligent purposes. The main reason is that, even when digitalisation is often analysed on its own and used to refer to a limited number of technological applications (mainly mobile phones, internet and, more recently, big data), it has underpinned exponential changes in other areas of technological development. Increased computing capacity at lower costs has favoured innovations in nanotechnology, biogenetics, optics, neurology, chemistry, robotics, and artificial intelligence, among many other areas.

Digitalisation has in fact favoured a tree-like system of technological change that boosts innovations across different fields. An example is the convergence and synergy between digitalisation, nanotechnology, and biogenetics, triggering significant progress in medical diagnosis.

Following Niklas Luhmann, the system is autopoietic: innovation itself bring more innovation. The system of technological change features a positive feedback mechanism and yields outputs that increase exponentially. In other words: Innovation brings about twice as much innovation, not only within the field of digitalisation but across many other fields, and so on. This is what we call exponential technological change (ETC).[1]

Market-Driven vs. Development-Driven ETC

Without adequate governance, the practical applications of ETC will most likely respond to market needs and not necessarily to broader human development goals. Many contributions of digital technologies to date are centred on fostering productivity, efficiency, and growth. This applies to both economies in the Global North and economies in the Global South. Digital platforms may be supported by data mining tools and weak artificial intelligence (A.I.),[2] useful for identifying behavioural patterns and understanding the profile of consumers. This allows the supply of a broader variety of goods and services that are individually tailored at lower costs, benefiting consumers around the globe.

The fact that ETC is often profit-driven is not necessarily bad news for the achievement of sustainable development goals (SDGs). However, the net costs and benefits depend on a number of factors. For example, ETC is already triggering automation in many industries. This phenomenon has increased labour productivity in some cases; but in others, especially for manual and repetitive tasks, labour has actually become redundant. Depending on the country, between 50% and 85% of current jobs will disappear or will be transformed in the next decades due to automation. Any replacement requires a different set of skills, placing a high importance on education and training systems.

If societies are not ready to cope with short-term technological unemployment, this could increase current income inequalities, cancel benefits, fuel nationalist movements, undermine global governance, and thus overall hamper the achievement of sustainable development goals (SDGs).

As a general rule, when ETC is market-driven it requires

  • designing better regulations at the global level (to avoid concentration or at least to make sure that concentration does not create broader socioeconomic inequalities),
  • public-private partnerships (to make possible applications of ETC which are more accessible), and
  • to support technological training while maintaining a human-centred education, which is vital so that individuals remain citizens, able to flourish in more comprehensive ways than simply as technological users and consumers.

Development-driven ETC tends to be citizen-oriented. Examples include the use of digital technologies to increase government transparency, the application of weak A.I. to improve urban management, or cheaper apps that allow medical diagnoses among vulnerable groups.

The Challenges for Global Governance

The difference between market-driven and development-driven innovations will become even more relevant in the next decades. Exponential innovations will continue to be so complex and dynamic that a number of unexpected breakthroughs could happen across different technological areas. Depending on public policies, international cooperation, knowledge-sharing, and global governance agreements, this could mean that innovations are only available for very few individuals with market power or that benefits are somehow shared more universally.

In the case of more universal sharing, with a more even distribution of ETC benefits, we could achieve many SDGs and witness a generalised raise of living standards among the global population. But this scenario will depend on pushing forward a broad cooperation agenda to maximise the benefits of ETC and minimise the adjustment costs. For example, states, corporations, and other non-state actors will need to cooperate closely to find ways to protect intellectual property rights, promoting innovations competitively and yet, allowing universal access. Cooperation will also be necessary to identify ways to prize development-driven vis-à-vis market-driven innovations without hindering innovation altogether.

[1] I owe the concept of ETC and some ideas on its associated challenges and opportunities to José Ramón López Portillo. See López Portillo (2018), La gran transición. Retos y Oportunidades del Cambio Tecnológico Exponencial, FCE and CONACYT, Mexico.

[2] Weak artificial intelligence, or A.I. for specific purposes, refers to computing processes that are designed to solve problems within specific contexts and to optimize specific tasks. In contrast, strong A.I. or general-purposed A.I., includes the ability to learn and apply intelligence across different fields.

Der Beitrag Digitalisation and exponential technological Change: Challenges and Opportunities erschien zuerst auf International Development Blog.

EU to the rescue: Priorities for a positive multilateralism

15. Oktober 2018 - 11:59

We are a long way from 2015. That year, the world committed to the Sustainable Development Goals and the Paris Agreement on climate – promising to end extreme poverty, address corrosive inequality, boost peace and prosperity, and stop climate change.

Now in 2018, we already look back at 2015 with nostalgia. This was the high water mark of multilateralism, brought low by the rise of populism and ‘illiberal democracy’. Suddenly, it seems, we are forced to find ways of rescuing the global rules-based order.

The EU has a strong interest in defending multilateralism. Its economic power as the world’s largest market depends on rules-based trade and finance; and its political strength requires the rule of law. Externally, the EU is the world’s largest aid donor and an important defender of human rights. Internally, it also needs to safeguard its values and ability to work together.

The EU has embraced from the beginning a form of multilateralism that was not cooperation in pursuit of narrow self-interest, but rather one where the mutual gains from cooperation made the whole bigger than the sum of its parts.

Today, global challenges require global action. The SDGs provide a framing. For the EU, there are five priorities.

First, to help deliver an inclusive, equitable globalisation that shares the benefits of fair trade and investment with citizens at home and abroad. For many countries that have begun to escape long-term poverty, the key to success has been to engage in the world economy through trade, so trade rules and trade facilitation need to be central. And fighting inequality globally and within the EU promotes long-term economic prosperity and social stability.

Second, to engineer the sustainability revolution needed to avoid the worst impacts of climate change. The EU has a role in developing and scaling investments, technology, and policy needed to achieve major transitions in energy, water, agriculture, and consumption; and in supporting the actions needed to adapt to higher temperatures, higher sea levels, disrupted weather patterns and extreme weather events.

Third, to tackle conflict, invest in prevention, deploy civil and military means to support stabilisation and peacebuilding, and take action internationally to limit arms sales. Thus, a new development cooperation needs to be about how to deal with complex security threats, like those found in the Sahel or Myanmar, and with the impact of war on ordinary people in countries like Yemen or Syria. There are no easy wins or short-term commitments.  Progress will require all the arts of diplomacy and defence, alongside development and humanitarian aid.

Fourth, to move migration policy beyond ‘Fortress Europe’, respecting the rights of refugees and recognising the many benefits of legal, safe migration – and not just for the migrants themselves. Remember, migration rises, not falls, in the early stages of economic development: investing in the countries of origin will reduce migration pressure, but only in the long term.

Fifth, to promote human rights and democratic norms inside the EU and globally.

It is not axiomatic that ‘Europe’ should be the instrument of choice in all these cases. European countries need to support the work of the UN, and of bodies like the World Bank and the IMF. ‘Europe’ must always make its case.

However, the European Union brings many assets and has a track record to be proud of: committed to democracy and to accountable institutions; collectively, the world’s largest aid donor; together, pioneers in climate action; progressive trade policy, emphasising labour and environmental standards; and experience in civil and military security missions.

Furthermore, the actions Europe itself takes internally shape the prospects for achieving the SDGs. For example, phasing out coal in the EU is just what the Marshall Islands and other climate vulnerable countries need and are calling for.

So, there is much to do, and there are many choices to make. The forward EU budget to 2027 is under negotiation. A Summit is planned for May 2019, in Sibiu, Romania, to set in train a process of European renewal. Elections to the European Parliament will take place, also in May. There is no single, uncontested routemap. These inter-locking processes need to debate alternative futures and sketch policy and fiscal alternatives. There will then be an agenda for the new European Commission at the end of the year. This cannot be an empty discussion in the abstract about more or less Europe. Our vision of positive multilateralism needs firm commitments. This is what we should be asking of national leaders, of MEPs, and of the new Commission.

The authors:

  • Lucien Chabason is Acting Director of the Institute for Sustainable Development and International Relations/ Institut du Développement Durable et des Relations Internationales, Paris, France
  • James Mackie is Acting Director of the European Centre for Development Policy Management, Maastricht, the Netherlands
  • Simon Maxwell is Chair of the European Think Tanks Group
  • Imme Scholz is Acting Director of the German Development Institute / Deutsches Institut für Entwicklungspolitik, Bonn, Germany
  • Alex Thier is Executive Director of the Overseas Development Institute, London, UK
  • Nathalie Tocci is Director of the Istituto Affari Internazionali, Rome, Italy

 

This opinion piece was published on EURACTIV’s Website and on ETTG.EU.

Der Beitrag EU to the rescue: Priorities for a positive multilateralism erschien zuerst auf International Development Blog.

Where is global trade and investment governance headed? A Tour d’Horizon

4. Oktober 2018 - 14:00
Will Trumpism survive beyond President Trump?

Since the US created the post-World War Two liberal international order and is still the pre-eminent global power notwithstanding the growing Chinese challenge, it is uniquely placed to determine the trade and investment system’s fortunes. The answer to the question posed in the title, therefore, depends fundamentally on the medium-term trajectory of US politics, and the resultant US position in the world.

 

Accordingly, in this blog I put forward my analysis of where the US political system is headed under President Donald J. Trump, how key countries are responding, and the ensuing implications for the global trade and investment system.

If trade scholars should thank US President Donald Trump for one thing, it is that he has put trade back on the mainstream media radar, with a vengeance. That makes writing a blog like this difficult, as everyone is now a lay expert. His ultimate contribution may be to render trade policy wonks redundant. Which is a way to say: apologies if you’ve already read or heard what I have to say.

A multi-facetted strategy

First, it is important to engage with the popular term ‘trade wars’. While it works well for headlines and talking points, it conceals more than it reveals. If we are to properly comprehend what is unfolding, we require a less catchy term. I prefer: ‘investment, technology, security, and trade wars’. Unwieldy, but more representative of what is going on.

Concerning investment, President Trump’s maximum objective seems to be to force repatriation of US multinational corporations’ (MNCs) cross-border value chains, and oblige foreign exporters located outside of the US to shift their investments into the US. Connecting this to the security realm, a minimum objective is to force relocation of export-oriented foreign investments, dependent on exports to the US market, out of China.

The economic policy logic of the maximum objective is located in the developing world of the 1950s and 1960s, in which countries desired to ‘own the value chain’, from intermediate products to final goods, and to export the resulting production, and is inimical to a world of cross-border value chains. If it becomes the new normal, then the future of the trading system is in serious doubt.

The security logic is located in the geopolitical realm, namely escalating US-China contestation, which some commentators argue is increasingly a clash of political systems (free markets versus state capitalism). This logic transcends the Trump Administration and is widely shared across the Western world. Unsurprisingly, notwithstanding reservations about President Trump’s trade tactics vis a vis China, there is tacit and explicit support for his objectives in many quarters.

Control over technology, particularly the commanding heights of the ‘fourth industrial revolution’, is intimately connected to outward investment from the US, as well as ‘predatory’ investments into the US, from Chinese firms in particular. Some of the technologies concerned are at the apex of cross-border value chains, others will be in the future, and are held by ‘lead firms’, many of them American. The concern is that when US firms are obliged to yield control over technologies in exchange for access to the Chinese market, strategic competitors are enabled, threatening the survival of the ‘lead firm’ and resultant control over the value chain. Similarly, when Chinese competitors acquire technology-rich US firms, the concern is that those technologies will be stripped out of the US, undermining the country’s long-term technological dominance, competitiveness, and military strength.

Again, these concerns transcend the Trump Administration, and are widely shared by US business, politicians, civil society, and, particularly, the military-industrial complex. The security dimension, for example, is of great concern to the US military establishment, particularly where the ‘dual use’ technologies constituting the ‘Fourth Industrial Revolution’ cluster. Furthermore, many US allies share these concerns, notwithstanding the bludgeoning some have received from the Trump Administration.

The fact that President Xi’s government has adopted a far more assertive stance on the regional and global stages, notably its forays into the South China sea and the Belt and Road Initiative, has heightened concerns in Washington. As a Chinese commentator observed in a closed-door roundtable I attended recently, we now face a clash of ‘Trumpism’ versus (Chinese) ‘Triumphism’; the latter occasioned by China emerging relatively unscathed from the global financial crisis in contrast to Western economies thus proving, to certain Beijing elites, the superiority of Chinese state capitalism.

These logics consequently find strong expression in the trade arena. The Trump Administration regards import tariffs as serving the twin objectives of obliging companies currently exporting to the US to engage in ‘tariff hopping’ investments into the US, yielding the additional ‘benefit’ of reducing the US’s trade deficit. Similarly, tighter rules of origin, which feature so prominently in the recently announced US, Mexico, Canada deal, will oblige companies to locate more of their value chains in the US in order to take advantage of tariff preferences. Furthermore, President Trump is not averse to using import tariffs as a tool of state craft to secure political concessions from trading partners, as Turkey’s President Erdogan recently found out.

Put the two together (protection plus statecraft), and President Trump’s approach to trade could be summed up as ‘geo-economic’ (combining economic and political objectives). The strong emphasis on the balance of trade, read together with security concerns, means it is best characterised as old-fashioned mercantilism, with modern characteristics given the focus on forcing value chain investment relocation.

There is a deeper, social, impulse behind President Trump’s trade stance, which could be characterised as ‘anti-globalization’. While it is ironic that a man borne into great wealth could claim the mantle of representative of America’s marginalised industrial workers, it is evident that he connects organically to this core of his political ‘base’. Interestingly, he mobilises this base on an anti-elite, particularly globalised elite, platform. This platform forms the core of his foreign policy impulses, which is to dismantle the institutions set up by that elite, or what some of his supporters refer to as ‘the blob’, in order to cement US power at the apex of the post-World War Two liberal international order.

The significance, and trajectory of Trumpism

Taken together, President Trump’s domestic and international postures have been characterised as ‘neo-Jacksonian’. President Andrew M. Jackson, the 7th President of the United States (1829-1837), created the modern Democrat party by leading a breakaway from the Grand Old Party when its leadership rejected his candidacy for the Presidency – and went on to set the mould of US politics for a subsequent generation. President Trump mounted, in essence, a hostile takeover of the Republican Party and, with a second term beckoning, it is conceivable that he could do the same, this time on a global scale.

A key question to ask at this point is whether Trumpism will survive beyond President Trump? Part of the answer is that it depends on how long Mr Trump remains in office, and whether his term(s) in office will remould US political economy, leaving an enduring footprint. This is impossible to predict. While it is clear that a large swathe of US business is strongly opposed to President Trump’s trade policies, and many Republican Congressmen too, so far, he has been able to defuse resistance by holding out the possibility of success in his negotiations with China.

Quite how long he will be able to maintain this position is unknowable, and in part a function of how his party performs at the November 6th mid-term elections. It is important to note, though, that if the Democratic Party does acquire control over the House of Representatives (it is unlikely they will acquire control of the Senate) in November, there are many Democratic Party politicians that support the direction of President Trump’s trade policies, if not the details.

Furthermore, and barring any highly incriminating revelations from the Mueller investigation into alleged Russian interference in the 2016 Presidential election, it is difficult to see impeachment proceedings against President Trump succeeding in a (likely) Republican-controlled Senate. If anything, such proceedings would mobilise the Trump political base. The odds, are, it seems to me, that President Trump contests the 2020 Presidential elections he could win.

Were he to lose, it may well be to a populist Democratic Party politician, perhaps a younger version of Bernie Sanders still to be revealed. Or US politics may throw up some other surprise. However, it is unlikely that a Democratic President, post 2020, will restore what remains by then of the liberal international economic order. It is very likely, though, that whoever is elected then will face inexorable pressure to continue ‘containing’ China’s rise, using a combination of trade and investment instruments, and military pressure.

The next phase

Within this broad framing, the rest is important detail. In NAFTA 2.0 companies are incentivised to locate more production in the US. Now the US will focus on Asia-Pacific, and particularly the countries comprising the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), looking to cement a series of bilateral deals in the trade equivalent of the ‘rolling thunder’ unleashed by a squadron of B-52 bombers. The intention: establish a ‘cordon-sanitaire’ around China, of like-minded allies. If this sounds remarkably like the original TPP’s intention, that’s because it is; the difference is the de-liberalizing content of the unfolding thrust.

Already countries in the region are bracing themselves, if my conversations with Japanese, Philippine, and Vietnamese trade policy wonks in recent days are anything to go by. The interesting thing is that these deals could be constructed relatively quickly, given that all CPTPP members had already concluded bilaterals with the US under President Obama’s TPP. Furthermore, if my reading of US domestic politics is correct, playing the waiting game in the hope that President Trump will soon be gone may not be an optimal strategy.

In-between the US and the EU will continue to square off, avoiding the difficult issues that divide them by focusing on greater regulatory cooperation and, where possible, convergence. As the TTIP negotiations showed, however, this agenda is unlikely to yield quick wins.

What about ‘the rest’?

The EU, for its part, is now actively stepping up its Asia-Pacific engagement strategy, through FTAs with Australia and New Zealand now underway, and its recently concluded bilateral FTA with Japan. Both FTAs are rightly seen as, in part, a strategic response to US trade strategy, involving key protagonists of the rules-based liberal international economic order. Similarly, Japan’s initiative to cement the CPTPP, supported inter alia by Canada, Australia, and New Zealand, was another very important response albeit one perhaps threatened by what may unfold post-NAFTA.

What of China? The CCP’s insurance strategy has 3 discernible dimensions. First, at the domestic level it is likely to pursue a strategy of reform and doubling down on its longer-term strategic objectives. Notwithstanding the evident appetite in China for more ‘Party-state’ direction of the economy, there is still a substantial constituency pressing for a renewed market opening phase; making concessions to this constituency could serve China’s economy, while placating domestic critics and the US in some measure, perhaps enough to defuse tensions and derail President Trump’s ‘tarrifying’ strategy.

Second, at the regional level China is looking to bed down the Regional Comprehensive Economic Partnership negotiations, increasingly, and an interesting sign of the times, in partnership with Japan. The ongoing challenge with RCEP remains what to do about India, whose trade policy is moving in an increasingly illiberal direction as its balance of payments challenges mount. Indeed, India has become a significant drag on the global trading system; no salvation with be forthcoming from that quarter.

Third, China may be keen to re-engage at the WTO, together with a constellation of large trading nations that share a common concern about the direction that US trade strategy is headed in. Quite how China will do so, however, remains to be seen. It is up against significant concerns across a range of trading partners about its economic model and how this translates into global rules.

So far Canada and the EU have put forward separate position papers on WTO reform aimed, in part, at addressing longstanding US concerns, notably with the Appellate Body of the Dispute Settlement Mechanism. The US, EU, and Japan are also cooperating to develop positions on reforming a number of WTO codes, notably the subsidies agreement. This is targeted squarely at China and suggests an underlying acknowledgement by US Trade Representative Ambassador Lighthizer that the US needs allies in its confrontation with China. Perhaps there is light at the end of the tunnel, although for China this could represent an onrushing train.

That said, if President Trump’s maximum investment strategy (repatriation of value chains to the US) is the aim, then it needs to be noted that this objective is not shared by the US’s main trading partners, and particularly vis a vis China. Taking the EU and Japan, both want to render China’s policy environment more conducive to investment by their companies – an aim diametrically opposed to President Trump’s maximum objective.

Who would dare to predict how all this plays out in the next, say, 3 to 5 years? Given how poorly the pollsters have fared in predicting electoral outcomes in Western democracies, it would be a foolish academic that attempted this. So that is where I shall end.

Der Beitrag Where is global trade and investment governance headed? A Tour d’Horizon erschien zuerst auf International Development Blog.

Where is global trade and investment governance headed? A Tour d’Horizon

4. Oktober 2018 - 13:32

Since the US created the post-World War Two liberal international order and is still the pre-eminent global power notwithstanding the growing Chinese challenge, it is uniquely placed to determine the trade and investment system’s fortunes. The answer to the question posed in the title, therefore, depends fundamentally on the medium-term trajectory of US politics, and the resultant US position in the world. Accordingly, in this blog I put forward my analysis of where the US political system is headed under President Donald J. Trump, how key countries are responding, and the ensuing implications for the global trade and investment system.

If trade scholars should thank US President Donald Trump for one thing, it is that he has put trade back on the mainstream media radar, with a vengeance. That makes writing a blog like this difficult, as everyone is now a lay expert. His ultimate contribution may be to render trade policy wonks redundant. Which is a way to say: apologies if you’ve already read or heard what I have to say.

A multi-facetted strategy

First, it is important to engage with the popular term ‘trade wars’. While it works well for headlines and talking points, it conceals more than it reveals. If we are to properly comprehend what is unfolding, we require a less catchy term. I prefer: ‘investment, technology, security, and trade wars’. Unwieldy, but more representative of what is going on.

Concerning investment, President Trump’s maximum objective seems to be to force repatriation of US multinational corporations’ (MNCs) cross-border value chains, and oblige foreign exporters located outside of the US to shift their investments into the US. Connecting this to the security realm, a minimum objective is to force relocation of export-oriented foreign investments, dependent on exports to the US market, out of China.

The economic policy logic of the maximum objective is located in the developing world of the 1950s and 1960s, in which countries desired to ‘own the value chain’, from intermediate products to final goods, and to export the resulting production, and is inimical to a world of cross-border value chains. If it becomes the new normal, then the future of the trading system is in serious doubt.

The security logic is located in the geopolitical realm, namely escalating US-China contestation, which some commentators argue is increasingly a clash of political systems (free markets versus state capitalism). This logic transcends the Trump Administration and is widely shared across the Western world. Unsurprisingly, notwithstanding reservations about President Trump’s trade tactics vis a vis China, there is tacit and explicit support for his objectives in many quarters.

Control over technology, particularly the commanding heights of the ‘fourth industrial revolution’, is intimately connected to outward investment from the US, as well as ‘predatory’ investments into the US, from Chinese firms in particular. Some of the technologies concerned are at the apex of cross-border value chains, others will be in the future, and are held by ‘lead firms’, many of them American. The concern is that when US firms are obliged to yield control over technologies in exchange for access to the Chinese market, strategic competitors are enabled, threatening the survival of the ‘lead firm’ and resultant control over the value chain. Similarly, when Chinese competitors acquire technology-rich US firms, the concern is that those technologies will be stripped out of the US, undermining the country’s long-term technological dominance, competitiveness, and military strength.

Again, these concerns transcend the Trump Administration, and are widely shared by US business, politicians, civil society, and, particularly, the military-industrial complex. The security dimension, for example, is of great concern to the US military establishment, particularly where the ‘dual use’ technologies constituting the ‘Fourth Industrial Revolution’ cluster. Furthermore, many US allies share these concerns, notwithstanding the bludgeoning some have received from the Trump Administration.

The fact that President Xi’s government has adopted a far more assertive stance on the regional and global stages, notably its forays into the South China sea and the Belt and Road Initiative, has heightened concerns in Washington. As a Chinese commentator observed in a closed-door roundtable I attended recently, we now face a clash of ‘Trumpism’ versus (Chinese) ‘Triumphism’; the latter occasioned by China emerging relatively unscathed from the global financial crisis in contrast to Western economies thus proving, to certain Beijing elites, the superiority of Chinese state capitalism.

These logics consequently find strong expression in the trade arena. The Trump Administration regards import tariffs as serving the twin objectives of obliging companies currently exporting to the US to engage in ‘tariff hopping’ investments into the US, yielding the additional ‘benefit’ of reducing the US’s trade deficit. Similarly, tighter rules of origin, which feature so prominently in the recently announced US, Mexico, Canada deal, will oblige companies to locate more of their value chains in the US in order to take advantage of tariff preferences. Furthermore, President Trump is not averse to using import tariffs as a tool of state craft to secure political concessions from trading partners, as Turkey’s President Erdogan recently found out.

Put the two together (protection plus statecraft), and President Trump’s approach to trade could be summed up as ‘geo-economic’ (combining economic and political objectives). The strong emphasis on the balance of trade, read together with security concerns, means it is best characterised as old-fashioned mercantilism, with modern characteristics given the focus on forcing value chain investment relocation.

There is a deeper, social, impulse behind President Trump’s trade stance, which could be characterised as ‘anti-globalization’. While it is ironic that a man borne into great wealth could claim the mantle of representative of America’s marginalised industrial workers, it is evident that he connects organically to this core of his political ‘base’. Interestingly, he mobilises this base on an anti-elite, particularly globalised elite, platform. This platform forms the core of his foreign policy impulses, which is to dismantle the institutions set up by that elite, or what some of his supporters refer to as ‘the blob’, in order to cement US power at the apex of the post-World War Two liberal international order.

The significance, and trajectory of Trumpism

Taken together, President Trump’s domestic and international postures have been characterised as ‘neo-Jacksonian’. President Andrew M. Jackson, the 7th President of the United States (1829-1837), created the modern Democrat party by leading a breakaway from the Grand Old Party when its leadership rejected his candidacy for the Presidency – and went on to set the mould of US politics for a subsequent generation. President Trump mounted, in essence, a hostile takeover of the Republican Party and, with a second term beckoning, it is conceivable that he could do the same, this time on a global scale.

A key question to ask at this point is whether Trumpism will survive beyond President Trump? Part of the answer is that it depends on how long Mr Trump remains in office, and whether his term(s) in office will remould US political economy, leaving an enduring footprint. This is impossible to predict. While it is clear that a large swathe of US business is strongly opposed to President Trump’s trade policies, and many Republican Congressmen too, so far, he has been able to defuse resistance by holding out the possibility of success in his negotiations with China.

Quite how long he will be able to maintain this position is unknowable, and in part a function of how his party performs at the November 6th mid-term elections. It is important to note, though, that if the Democratic Party does acquire control over the House of Representatives (it is unlikely they will acquire control of the Senate) in November, there are many Democratic Party politicians that support the direction of President Trump’s trade policies, if not the details.

Furthermore, and barring any highly incriminating revelations from the Mueller investigation into alleged Russian interference in the 2016 Presidential election, it is difficult to see impeachment proceedings against President Trump succeeding in a (likely) Republican-controlled Senate. If anything, such proceedings would mobilise the Trump political base. The odds, are, it seems to me, that President Trump contests the 2020 Presidential elections he could win.

Were he to lose, it may well be to a populist Democratic Party politician, perhaps a younger version of Bernie Sanders still to be revealed. Or US politics may throw up some other surprise. However, it is unlikely that a Democratic President, post 2020, will restore what remains by then of the liberal international economic order. It is very likely, though, that whoever is elected then will face inexorable pressure to continue ‘containing’ China’s rise, using a combination of trade and investment instruments, and military pressure.

The next phase

Within this broad framing, the rest is important detail. In NAFTA 2.0 companies are incentivised to locate more production in the US. Now the US will focus on Asia-Pacific, and particularly the countries comprising the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), looking to cement a series of bilateral deals in the trade equivalent of the ‘rolling thunder’ unleashed by a squadron of B-52 bombers. The intention: establish a ‘cordon-sanitaire’ around China, of like-minded allies. If this sounds remarkably like the original TPP’s intention, that’s because it is; the difference is the de-liberalizing content of the unfolding thrust.

Already countries in the region are bracing themselves, if my conversations with Japanese, Philippine, and Vietnamese trade policy wonks in recent days are anything to go by. The interesting thing is that these deals could be constructed relatively quickly, given that all CPTPP members had already concluded bilaterals with the US under President Obama’s TPP. Furthermore, if my reading of US domestic politics is correct, playing the waiting game in the hope that President Trump will soon be gone may not be an optimal strategy.

In-between the US and the EU will continue to square off, avoiding the difficult issues that divide them by focusing on greater regulatory cooperation and, where possible, convergence. As the TTIP negotiations showed, however, this agenda is unlikely to yield quick wins.

What about ‘the rest’?

The EU, for its part, is now actively stepping up its Asia-Pacific engagement strategy, through FTAs with Australia and New Zealand now underway, and its recently concluded bilateral FTA with Japan. Both FTAs are rightly seen as, in part, a strategic response to US trade strategy, involving key protagonists of the rules-based liberal international economic order. Similarly, Japan’s initiative to cement the CPTPP, supported inter alia by Canada, Australia, and New Zealand, was another very important response albeit one perhaps threatened by what may unfold post-NAFTA.

What of China? The CCP’s insurance strategy has 3 discernible dimensions. First, at the domestic level it is likely to pursue a strategy of reform and doubling down on its longer-term strategic objectives. Notwithstanding the evident appetite in China for more ‘Party-state’ direction of the economy, there is still a substantial constituency pressing for a renewed market opening phase; making concessions to this constituency could serve China’s economy, while placating domestic critics and the US in some measure, perhaps enough to defuse tensions and derail President Trump’s ‘tarrifying’ strategy.

Second, at the regional level China is looking to bed down the Regional Comprehensive Economic Partnership negotiations, increasingly, and an interesting sign of the times, in partnership with Japan. The ongoing challenge with RCEP remains what to do about India, whose trade policy is moving in an increasingly illiberal direction as its balance of payments challenges mount. Indeed, India has become a significant drag on the global trading system; no salvation with be forthcoming from that quarter.

Third, China may be keen to re-engage at the WTO, together with a constellation of large trading nations that share a common concern about the direction that US trade strategy is headed in. Quite how China will do so, however, remains to be seen. It is up against significant concerns across a range of trading partners about its economic model and how this translates into global rules.

So far Canada and the EU have put forward separate position papers on WTO reform aimed, in part, at addressing longstanding US concerns, notably with the Appellate Body of the Dispute Settlement Mechanism. The US, EU, and Japan are also cooperating to develop positions on reforming a number of WTO codes, notably the subsidies agreement. This is targeted squarely at China and suggests an underlying acknowledgement by US Trade Representative Ambassador Lighthizer that the US needs allies in its confrontation with China. Perhaps there is light at the end of the tunnel, although for China this could represent an onrushing train.

That said, if President Trump’s maximum investment strategy (repatriation of value chains to the US) is the aim, then it needs to be noted that this objective is not shared by the US’s main trading partners, and particularly vis a vis China. Taking the EU and Japan, both want to render China’s policy environment more conducive to investment by their companies – an aim diametrically opposed to President Trump’s maximum objective.

Who would dare to predict how all this plays out in the next, say, 3 to 5 years? Given how poorly the pollsters have fared in predicting electoral outcomes in Western democracies, it would be a foolish academic that attempted this. So that is where I shall end.

Der Beitrag Where is global trade and investment governance headed? A Tour d’Horizon erschien zuerst auf International Development Blog.

T20 must Rediscover before becoming Irrelevant

2. Oktober 2018 - 14:00
More dialogue rather than just statements

Almost a year-long T20 process concluded last week, setting the stage for the Argentinean Presidency of G20 hosting the Summit. The process of T20 was led by the Argentinean Council for International Relations (CARI) and the Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC). On the lines of the excellent precedence set up by the T20 during the German G20 Presidency in 2017, T20 Argentina also organised its work around 10 Task Forces with participation of more than 150 think-tanks. The process brought out 80 Policy Briefs. Unlike earlier, the T20 Co-Chairs could also present the final communiqué from T20 to the President of Argentina.

 

As may be expected, T20 could bring forward key-messages in the form of around 20 proposals which cover issues like, Future of Work; Need for Data Collection on Artificial Intelligence; Curriculum Redesigning; Sustainable Infrastructure; Ecological Based Urban Agenda; Use of Cleaner Energy; Transfer of Technology for Sustainable Food Future; Promoting Healthy Diets; Reform of Multilateral Trading System; Cooperation of Corporate taxation; Cooperation among Central Banks; Framework for Crypto Assets; Governance Through Bottoms-Up; Reporting on 2030 Agenda; Compact with Africa; and Monitoring on Migration. If one analyses and compares these recommendations with those made by the German T20 Chairs, the list would not be very different. In some cases, even the contours of such recommendations are not very different.

In my view, this is emerging as a major challenge before global platforms, where interactions are becoming richer and prospects for dialogue are dwindling away in the shine and glory of process and organization. This is all the more worrying when exchanges among the leaders are getting increasingly constrained, due to their own divergent worldviews, domestic compulsions and of course other political obligations. This is the opportunity when think-tanks should sharpen their research output and come out against pre-conceived perceptions, which have no empirical basis.

Plurality and vibrance of new thoughts and ideas with new and different set of people and experts would provide longevity to the T20 process. Ideas and their relevance would remain ambiguous till we couch them in the framework of realism and pragmatism. Pushing up frameworks that have been rejected at the other multilateral platforms to the G20 process would not add more meat to the G20 process; on the contrary it would constrain the decision making process further. It is true that with WTO and the UN System being under great stress, G20 with less number of actors gives greater scope for a meaningful dialogue. Therefore, collective efforts in this direction are extremely important. The Host Presidency would have much greater role to play in evolving not only the macro agenda, but also the sectoral specificities, couched again in realism and fitting the test of empirics. Here the effort is required to be made to have intense discussions across different countries and different viewpoints. The trend of dominance by few experts and few perspectives should be avoided. It is very true of sectors like agriculture, where plurality of measures are important, as countries are at different stages of development.

In December 2018, Japan would take over as the new Presidency of G20. At the T20 meeting in Buenos Aires, the Japanese delegation identified five major priorities which they would focus on viz. Debt Sustainability; Compact with Africa; Agricultural Development (focusing on rice coalition for better production and food value chains); Industrial Transformation (Kaizan Production System and Global Value Chains) and STI (Science, Technology, Innovation Policy Coordination). It is likely that Asian Development Bank Institute (ADBI) that will lead the process. Other Japanese institutes such as the JICA Research Institute (JICA-RI), Research Institute of Economy, Trade and Industry (RIETI), the Japan Institute of International Affairs (JIIA) and the Institute for International Monetary Affairs (IIMA) will also participate in the process.

As the world prepares for better management of financial and macro-economic variables through greater coordination of policies, it is only the dialogue among key actors that is going to save the world in the days to come. The G20 process is extremely crucial in this regard. Jobs, Growth, and Peace are the three over-arching priority areas for almost all the economies. As financial and global media projects rising global debts, which now touches $ 250 trillion, possibilities of next crisis in the offing are not far away. Dialogue among T20 is particularly important when battles among nationalism and trade wars are challenging the very premises of the global financial system. It is in this context, a sharply focused deliberative T20 with more time for discussions and dialogue rather than just statements is required more than ever. The T20 must reinvent itself to remain relevant.

Der Beitrag T20 must Rediscover before becoming Irrelevant erschien zuerst auf International Development Blog.

T20 must Rediscover before becoming Irrelevant

2. Oktober 2018 - 13:46


Almost a year-long T20 process concluded last week, setting the stage for the Argentinean Presidency of G20 hosting the Summit. The process of T20 was led by the Argentinean Council for International Relations (CARI) and the Center for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC). On the lines of the excellent precedence set up by the T20 during the German G20 Presidency in 2017, T20 Argentina also organised its work around 10 Task Forces with participation of more than 150 think-tanks. The process brought out 80 Policy Briefs. Unlike earlier, the T20 Co-Chairs could also present the final communiqué from T20 to the President of Argentina.

As may be expected, T20 could bring forward key-messages in the form of around 20 proposals which cover issues like, Future of Work; Need for Data Collection on Artificial Intelligence; Curriculum Redesigning; Sustainable Infrastructure; Ecological Based Urban Agenda; Use of Cleaner Energy; Transfer of Technology for Sustainable Food Future; Promoting Healthy Diets; Reform of Multilateral Trading System; Cooperation of Corporate taxation; Cooperation among Central Banks; Framework for Crypto Assets; Governance Through Bottoms-Up; Reporting on 2030 Agenda; Compact with Africa; and Monitoring on Migration. If one analyses and compares these recommendations with those made by the German T20 Chairs, the list would not be very different. In some cases, even the contours of such recommendations are not very different.

In my view, this is emerging as a major challenge before global platforms, where interactions are becoming richer and prospects for dialogue are dwindling away in the shine and glory of process and organization. This is all the more worrying when exchanges among the leaders are getting increasingly constrained, due to their own divergent worldviews, domestic compulsions and of course other political obligations. This is the opportunity when think-tanks should sharpen their research output and come out against pre-conceived perceptions, which have no empirical basis.

Plurality and vibrance of new thoughts and ideas with new and different set of people and experts would provide longevity to the T20 process. Ideas and their relevance would remain ambiguous till we couch them in the framework of realism and pragmatism. Pushing up frameworks that have been rejected at the other multilateral platforms to the G20 process would not add more meat to the G20 process; on the contrary it would constrain the decision making process further. It is true that with WTO and the UN System being under great stress, G20 with less number of actors gives greater scope for a meaningful dialogue. Therefore, collective efforts in this direction are extremely important. The Host Presidency would have much greater role to play in evolving not only the macro agenda, but also the sectoral specificities, couched again in realism and fitting the test of empirics. Here the effort is required to be made to have intense discussions across different countries and different viewpoints. The trend of dominance by few experts and few perspectives should be avoided. It is very true of sectors like agriculture, where plurality of measures are important, as countries are at different stages of development.

In December 2018, Japan would take over as the new Presidency of G20. At the T20 meeting in Buenos Aires, the Japanese delegation identified five major priorities which they would focus on viz. Debt Sustainability; Compact with Africa; Agricultural Development (focusing on rice coalition for better production and food value chains); Industrial Transformation (Kaizan Production System and Global Value Chains) and STI (Science, Technology, Innovation Policy Coordination). It is likely that Asian Development Bank Institute (ADBI) that will lead the process. Other Japanese institutes such as the JICA Research Institute (JICA-RI), Research Institute of Economy, Trade and Industry (RIETI), the Japan Institute of International Affairs (JIIA) and the Institute for International Monetary Affairs (IIMA) will also participate in the process.

As the world prepares for better management of financial and macro-economic variables through greater coordination of policies, it is only the dialogue among key actors that is going to save the world in the days to come. The G20 process is extremely crucial in this regard. Jobs, Growth, and Peace are the three over-arching priority areas for almost all the economies. As financial and global media projects rising global debts, which now touches $ 250 trillion, possibilities of next crisis in the offing are not far away. Dialogue among T20 is particularly important when battles among nationalism and trade wars are challenging the very premises of the global financial system. It is in this context, a sharply focused deliberative T20 with more time for discussions and dialogue rather than just statements is required more than ever. The T20 must reinvent itself to remain relevant.

Der Beitrag T20 must Rediscover before becoming Irrelevant erschien zuerst auf International Development Blog.

Can think tanks save the world – and should they?

1. Oktober 2018 - 16:29
Can T20 accomplish anything meaningful?

In mid-September, Buenos Aires hosted an interesting and innovative event, organized by a variety of think tanks: the Think20 Summit. A total of about one thousand participants from almost 70 countries dealt with the topics of the G20 summit, which will take place in Buenos Aires at the end of November.

 

The Argentine government has made the future of work, sustainable food supply, infrastructure and gender justice its priorities.

To understand what happened in Buenos Aires, you need a brief introduction to the T20. It is a group of, rather informally organised, academics and think tank experts who have produced dozens of policy briefs in a total of 10 task forces, which in turn deliver economic policy advice not only in written form but also by communicating to the G20.

The T20 also has an official governing body that automatically includes think tanks from the host country. University members, large institutes such as the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) and the Kiel Institute for the World Economy, the Brookings Institution in Washington, the South African Institute for International Affairs in Johannesburg, small consultancies, political foundations and others form the T20 which include experts on foreign trade, monetary policy, gender research, aging research, urban studies, labour market research and climate research. The policy briefs and a communiqué containing the 20 policy proposals can be downloaded from this website.

This column is not intended to bother the reader with the proposals. Rather, the question is whether – and to what extent – this type of organization of think tanks can accomplish anything meaningful around summit diplomacy (of this special kind) and if it makes solving the problems of mankind easier? In this regard, it helps to take a look at the habits of the G20.

The G20 is a group of 20 industrial and emerging economies with at least one representative from each continent, corresponding in its organizational structure to the G7 or G8 respectively. The respective host sets the agenda, organises a series of mid-level ministerial meetings, ministerial meetings and a G20 leaders’ summit. The host country is free to choose the agenda.

Obviously, agendas are largely based on the needs of the respective host country governments. However, these needs have not always emerged from real economic necessities, but have also depend on whether the government can merge the domestic agenda with the broader G20 agenda. This process, in part, risks considerable ineffectiveness and arbitrariness of summit agendas and communiqués. If the G20 had a secretariat, the situation would probably be better. However, concerns would inevitably arise on the independence of such a secretariat as well as its potential to become a somewhat cumbersome bureaucracy.

In a sense, the informality of the T20 does the job. The working groups are put together in such a way that, on the one hand, they take up the priorities of the respective G20 host – this year Argentina – and, on the other hand, continue to treat the topics deemed relevant, even if they are given little priority by the G20 host. This will consolidate and sustain the agenda of the G20 process because the T20 is now recognized in the political process – unlike in the public; there is still some catching up to do here. The T20 could thus support the respective future hosts in the selection of topics, at least indirectly. It must not happen too directly, because then the independence of the T20 process might be jeopardized.

This independence from the political process and the breadth of expertise from very different – even political – contexts are the conditions that make the T20 such a successful contributor to the economic policy discourse. It ensures different methodological approaches and political positions that need to be reconciled in the discussion papers.

The broad areas of expertise within the T20 facilitates the deliverance of economic policy measures that improve the situation of broad segments of the global population. One must not be naïve: Carefully drafted policy papers will not be easy to sell to elected politicians (even beyond Pennsylvania Avenue). Nevertheless, ideas that mature over years and are illuminated from many angles, empirically tested and validated in this way, are the currency of think tanks. By skilfully combining expertise and smart publishing strategies, the T20 can not only reach the politicians at the summit, but may also help shape public debate. The first target for this year was not completely missed, the T20 communiqué was handed over to the Argentine President Macri on September 17th, however it still lacks public discussion.

Nevertheless, the T20 summit in Buenos Aires came to a positive conclusion. The summit organizers have succeeded in bringing together a large number of professionals from very different fields into a fruitful and informative exchange. The result of this summit and the previous work is something to be proud of. It is not expected that the recommendations will be included in the final document of the G20 summit; but at least the burden of proof has been slightly shifted towards the governments.

 

This blog post has been published on the Tutwa Blog and appeared as an op-ed in German in the Wirtschaftswoche.

Der Beitrag Can think tanks save the world – and should they? erschien zuerst auf International Development Blog.

Can think tanks save the world – and should they?

1. Oktober 2018 - 14:12


In mid-September, Buenos Aires hosted an interesting and innovative event, organized by a variety of think tanks: the Think20 Summit. A total of about one thousand participants from almost 70 countries dealt with the topics of the G20 summit, which will take place in Buenos Aires at the end of November. The Argentine government has made the future of work, sustainable food supply, infrastructure and gender justice its priorities.

To understand what happened in Buenos Aires, you need a brief introduction to the T20. It is a group of, rather informally organised, academics and think tank experts who have produced dozens of policy briefs in a total of 10 task forces, which in turn deliver economic policy advice not only in written form but also by communicating to the G20.

The T20 also has an official governing body that automatically includes think tanks from the host country. University members, large institutes such as the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) and the Kiel Institute for the World Economy, the Brookings Institution in Washington, the South African Institute for International Affairs in Johannesburg, small consultancies, political foundations and others form the T20 which include experts on foreign trade, monetary policy, gender research, aging research, urban studies, labour market research and climate research. The policy briefs and a communiqué containing the 20 policy proposals can be downloaded from this website.

This column is not intended to bother the reader with the proposals. Rather, the question is whether – and to what extent – this type of organization of think tanks can accomplish anything meaningful around summit diplomacy (of this special kind) and if it makes solving the problems of mankind easier? In this regard, it helps to take a look at the habits of the G20.

The G20 is a group of 20 industrial and emerging economies with at least one representative from each continent, corresponding in its organizational structure to the G7 or G8 respectively. The respective host sets the agenda, organises a series of mid-level ministerial meetings, ministerial meetings and a G20 leaders’ summit. The host country is free to choose the agenda.

Obviously, agendas are largely based on the needs of the respective host country governments. However, these needs have not always emerged from real economic necessities, but have also depend on whether the government can merge the domestic agenda with the broader G20 agenda. This process, in part, risks considerable ineffectiveness and arbitrariness of summit agendas and communiqués. If the G20 had a secretariat, the situation would probably be better. However, concerns would inevitably arise on the independence of such a secretariat as well as its potential to become a somewhat cumbersome bureaucracy.

In a sense, the informality of the T20 does the job. The working groups are put together in such a way that, on the one hand, they take up the priorities of the respective G20 host – this year Argentina – and, on the other hand, continue to treat the topics deemed relevant, even if they are given little priority by the G20 host. This will consolidate and sustain the agenda of the G20 process because the T20 is now recognized in the political process – unlike in the public; there is still some catching up to do here. The T20 could thus support the respective future hosts in the selection of topics, at least indirectly. It must not happen too directly, because then the independence of the T20 process might be jeopardized.

This independence from the political process and the breadth of expertise from very different – even political – contexts are the conditions that make the T20 such a successful contributor to the economic policy discourse. It ensures different methodological approaches and political positions that need to be reconciled in the discussion papers.

The broad areas of expertise within the T20 facilitates the deliverance of economic policy measures that improve the situation of broad segments of the global population. One must not be naïve: Carefully drafted policy papers will not be easy to sell to elected politicians (even beyond Pennsylvania Avenue). Nevertheless, ideas that mature over years and are illuminated from many angles, empirically tested and validated in this way, are the currency of think tanks. By skilfully combining expertise and smart publishing strategies, the T20 can not only reach the politicians at the summit, but may also help shape public debate. The first target for this year was not completely missed, the T20 communiqué was handed over to the Argentine President Macri on September 17th, however it still lacks public discussion.

Nevertheless, the T20 summit in Buenos Aires came to a positive conclusion. The summit organizers have succeeded in bringing together a large number of professionals from very different fields into a fruitful and informative exchange. The result of this summit and the previous work is something to be proud of. It is not expected that the recommendations will be included in the final document of the G20 summit; but at least the burden of proof has been slightly shifted towards the governments.

 

This blog post has been published on the Tutwa Blog and appeared as an op-ed in German in the Wirtschaftswoche.

Der Beitrag Can think tanks save the world – and should they? erschien zuerst auf International Development Blog.

T20 – Cooperation to overcome the challenges to multilateralism?

19. September 2018 - 14:17

The T20 summit assembled 1000 researchers from 68 countries during the past two days in Buenos Aires, Argentina, to present policy recommendations on issues such as future of work, climate action, trade and social inclusion. A joint communique was handed over to G20 Chair and Argentinean President Mauricio Macri that called for more engagement to overcome the challenges faced by multilateral cooperation in all these areas.

The discussions at the T20 Summit made very clear that achieving this goal will not be an easy task. In our view, think tanks need to step up their efforts to improve the effectiveness of the T20 as a responsible stakeholder of global governance and multilateral cooperation.

When the going gets rougher

We are in a rough international climate where the usefulness of multilateral cooperation and research-based policy proposals are increasingly doubted. Political settings in a number of countries have turned more inward-looking in the past years and “my country first” approaches are poisoning attempts to solve global challenges cooperatively. Furthermore, research-based evidence as a basis for policy decisions faces headwind in times of politics based on gut feelings and moods of the day. This is a current reality in a number of countries, including major players in the G20. The G20 currently rather assemble a variety of national interests and egos around the table. The G20 summit in Buenos Aires in 2018 is probably under an even more difficult star than the previous one in Hamburg Hamburg in 2017.

The recent discussions of trade ministers in Mar del Plata were an illustration of the difficulties lying ahead. The purpose of these technical meetings is to provide input for the leaders’ summit taking place at the end of November in Buenos Aires. The trade ministers’ communique, however, shows a low level of ambition and it seems to reflect the lowest common denominator, rather than a productive meeting. We can observe similar results so far on sustainable development or climate action. This does not augur well for the upcoming G20 summit.

The role of think tanks

In view of international negotiations increasingly deadlocked, think tanks based in the G20 and non-G20 countries must rise to the challenges of populism and more nationalist thinking. It is not sufficient in these days to draft technical policy proposals concerning the solution of global problems. Crucially, think tanks have to shoulder more and different responsibilities in a contested global governance system.

For this purpose, think tanks are increasingly networking, cooperating and sharing insights from various countries and scientific disciplines. The T20, a network of think tanks and research institutes from a broad range of G20 and non-G20 countries, was geared to creating topical task forces in order to draft evidence-based policy proposals. The relevance of these task forces increases the more they reflect the diversity of contexts, and the plurality of problem definitions and solutions that characterizes our world. Cooperation on the basis of plurality and diversity is an asset in the current situation and not a burden. The task forces not only tackle conventional questions of economics and fiscal policy, but also consider achieving the 2030 Agenda, global equality, sustainable development in Africa and climate action. As this increasingly transnational think tank network is meant to be beyond politics and does not represent special interests, it is free to deal with policy issues of great future relevance even though consensus on them may not yet seem feasible in the G20 context. The communique of the T20 and its recommendations to the Argentinean G20 Presidency show that this task continues to be important.

Think tanks, of course, cannot fully compensate for political shortcomings. They can provide recommendations, but they are not decision-makers. Furthermore, academics in think tanks are part of the elites, and as such are currently under fire. In this rather hostile climate, the T20 and other outreach groups such as the B20, C20 and W20 are important to maintain or probably rather rebuild the basis of cooperation below the level of international diplomacy. This process “under the surface” remains relevant – or even gains relevance – when agreement cannot be reached between governments. In other words: transnational action can help to keep issues on the plate when there exists a tendency to push them off the negotiation table.

Way forward for the T20

In recent years, the T20 has strengthened its focus on providing research-based policy advise, interacted more intensively with the G20 and its work streams and improved its internal working structures. While these improvements are surely necessary, they are certainly not sufficient for the T20 to fully exploit its potential as a facilitator of multilateral cooperation. In this respect, we suggest the T20 should take the following three steps:

First, the T20 should strive to further increase its impact on G20 policy-making processes. Necessary is an even stronger focus on effective dissemination strategies of the policy proposals produced by the task forces of the T20. So far, this dissemination is mainly taking place through the channels established between the chairs of the T20 and the G20 presidency. In addition, the T20 task forces should make use of its unique setup including think tank experts from various G20 and non-G20 countries and disseminate the policy advise in their national policy environments too.

Second, there is much potential for the various engagement groups to strengthen the exchange with each other in order to influence the G20 process. In the past two years, engagement groups such as the B20, C20 and T20 have issued joint statements on climate change that were received positively by a number of G20 governments. There is further potential of the working groups of the engagement groups to come together and develop joint policy proposals. The joint work of the T20 and the W20 on gender equity serves as an example. This cooperation, of course, is not easy as engagement groups represent different societal stakeholders and often compete with each other for influence. The T20, which does not see itself as an advocacy or interest group, can help to bridge these differences and enable cooperation between different engagement groups.

Third, the T20 needs to step up its efforts to better engage with society. Sharp thoughts and public engagement is needed and not only technical advice. Academics clearly have a public role to play to discuss and explain the benefits as well as the challenges of multilateral cooperation.

Der Beitrag T20 – Cooperation to overcome the challenges to multilateralism? erschien zuerst auf International Development Blog.

T20 – Cooperation to overcome the challenges to multilateralism?

19. September 2018 - 14:00
Three steps to follow for the T20.

The T20 summit assembled 1000 researchers from 68 countries during the past two days in Buenos Aires, Argentina, to present policy recommendations on issues such as future of work, climate action, trade and social inclusion. A joint communique was handed over to G20 Chair and Argentinean President Mauricio Macri that called for more engagement to overcome the challenges faced by multilateral cooperation in all these areas.

 

The discussions at the T20 Summit made very clear that achieving this goal will not be an easy task. In our view, think tanks need to step up their efforts to improve the effectiveness of the T20 as a responsible stakeholder of global governance and multilateral cooperation.

When the going gets rougher

We are in a rough international climate where the usefulness of multilateral cooperation and research-based policy proposals are increasingly doubted. Political settings in a number of countries have turned more inward-looking in the past years and “my country first” approaches are poisoning attempts to solve global challenges cooperatively. Furthermore, research-based evidence as a basis for policy decisions faces headwind in times of politics based on gut feelings and moods of the day. This is a current reality in a number of countries, including major players in the G20. The G20 currently rather assemble a variety of national interests and egos around the table. The G20 summit in Buenos Aires in 2018 is probably under an even more difficult star than the previous one in Hamburg Hamburg in 2017.

The recent discussions of trade ministers in Mar del Plata were an illustration of the difficulties lying ahead. The purpose of these technical meetings is to provide input for the leaders’ summit taking place at the end of November in Buenos Aires. The trade ministers’ communique, however, shows a low level of ambition and it seems to reflect the lowest common denominator, rather than a productive meeting. We can observe similar results so far on sustainable development or climate action. This does not augur well for the upcoming G20 summit.

The role of think tanks

In view of international negotiations increasingly deadlocked, think tanks based in the G20 and non-G20 countries must rise to the challenges of populism and more nationalist thinking. It is not sufficient in these days to draft technical policy proposals concerning the solution of global problems. Crucially, think tanks have to shoulder more and different responsibilities in a contested global governance system.

For this purpose, think tanks are increasingly networking, cooperating and sharing insights from various countries and scientific disciplines. The T20, a network of think tanks and research institutes from a broad range of G20 and non-G20 countries, was geared to creating topical task forces in order to draft evidence-based policy proposals. The relevance of these task forces increases the more they reflect the diversity of contexts, and the plurality of problem definitions and solutions that characterizes our world. Cooperation on the basis of plurality and diversity is an asset in the current situation and not a burden. The task forces not only tackle conventional questions of economics and fiscal policy, but also consider achieving the 2030 Agenda, global equality, sustainable development in Africa and climate action. As this increasingly transnational think tank network is meant to be beyond politics and does not represent special interests, it is free to deal with policy issues of great future relevance even though consensus on them may not yet seem feasible in the G20 context. The communique of the T20 and its recommendations to the Argentinean G20 Presidency show that this task continues to be important.

Think tanks, of course, cannot fully compensate for political shortcomings. They can provide recommendations, but they are not decision-makers. Furthermore, academics in think tanks are part of the elites, and as such are currently under fire. In this rather hostile climate, the T20 and other outreach groups such as the B20, C20 and W20 are important to maintain or probably rather rebuild the basis of cooperation below the level of international diplomacy. This process “under the surface” remains relevant – or even gains relevance – when agreement cannot be reached between governments. In other words: transnational action can help to keep issues on the plate when there exists a tendency to push them off the negotiation table.

Way forward for the T20

In recent years, the T20 has strengthened its focus on providing research-based policy advise, interacted more intensively with the G20 and its work streams and improved its internal working structures. While these improvements are surely necessary, they are certainly not sufficient for the T20 to fully exploit its potential as a facilitator of multilateral cooperation. In this respect, we suggest the T20 should take the following three steps:

First, the T20 should strive to further increase its impact on G20 policy-making processes. Necessary is an even stronger focus on effective dissemination strategies of the policy proposals produced by the task forces of the T20. So far, this dissemination is mainly taking place through the channels established between the chairs of the T20 and the G20 presidency. In addition, the T20 task forces should make use of its unique setup including think tank experts from various G20 and non-G20 countries and disseminate the policy advise in their national policy environments too.

Second, there is much potential for the various engagement groups to strengthen the exchange with each other in order to influence the G20 process. In the past two years, engagement groups such as the B20, C20 and T20 have issued joint statements on climate change that were received positively by a number of G20 governments. There is further potential of the working groups of the engagement groups to come together and develop joint policy proposals. The joint work of the T20 and the W20 on gender equity serves as an example. This cooperation, of course, is not easy as engagement groups represent different societal stakeholders and often compete with each other for influence. The T20, which does not see itself as an advocacy or interest group, can help to bridge these differences and enable cooperation between different engagement groups.

Third, the T20 needs to step up its efforts to better engage with society. Sharp thoughts and public engagement is needed and not only technical advice. Academics clearly have a public role to play to discuss and explain the benefits as well as the challenges of multilateral cooperation.

 

Der Beitrag T20 – Cooperation to overcome the challenges to multilateralism? erschien zuerst auf International Development Blog.

Latin American cooperation towards the G20 Summit in Buenos Aires

5. September 2018 - 14:00
G20 can send a joint message to the audiences

What might become of Latin America’s presence in the G20 following Argentina’s presidency? If previous attempts to forge a common platform for Argentina, Brazil and Mexico have not left a lasting memory, perhaps this time around it looks different? Indeed, the Sherpas decided to tighten dialogue since fall 2017 with the view to “translate different regional outlooks into a representative stance” that hopefully could spill over onto the next G20 presidency.

 

It remains to be seen whether Argentina’s early “active, inclusive and pragmatic” approach will translate into greater political goodwill on the side of the other G20 partners to address some of the priorities set forward by this presidency.

Latin America in the G20

According to Jorge Argüello, president of Fundación Embajada Abierta in Argentina and former ambassador to the United States (US) and the United Nations: “By not being able to define a common regional agenda, the Latin American bloc […] has struggled to incorporate Latin American priorities into the global agenda and has thus faced an additional historical disadvantage in G20 debates.” He points out that “care of natural resources and the fair commercialization of raw materials; the promotion of human resources and quality employment; investment in housing, education and health; and unrestricted respect for the right to migrate” are topics of great relevance for this region and could well be included on the G20 agenda.

For their part, Heidi Lough and Juan Cruz Díaz, both at Cefeidas Group in Buenos Aires, argue that “A common belief in the need for a regional voice existed in Hamburg. However, internal difficulties—notably a recently reshuffled foreign ministry in Argentina, and tumultuous political events in Brazil—complicated the ability to put forward a coherent, shared vision.” They conclude: “Argentina should seize the opportunity to provide the regional leadership needed to work toward Latin American alignment on key global issues.”

“The Latin American G20 agenda” through Argentina’s priorities

President Macri has expressed the ambition to make sure the G20 sits close to its professed goal of maintaining international financial stability through global financial and macroeconomic governance. This implies focusing on traditional “hard politics” during summits, alongside coordination on the implementation of the 2030 Agenda for Sustainable Development (comprising 17 Sustainable Development Goals), migration and terrorism. The priorities for Argentina’s G20 presidency are, in fact, of much wider relevance than the mere label “Latin American G20 agenda”: future of work in the digital age, sustainable infrastructure for development, and sustainable food future/food security. The fight against corruption tied to discussions on economic growth is another likely issue among the “top items” of this G20 presidency.

A common challenge for the big emerging economies like Brazil and Mexico is automation of low-skilled jobs and the need for investing more in Research and Development and Innovation to meet this transition and improve participation in global value chains. Facing rapid advances in technological development, digitalization and Artificial Intelligence, the G20 should provide with stronger endorsement of challenges confronting the public and private sectors of employment and education, and seek to pinpoint their needs (thereby by extension putting pressure on national governments to invest more in these areas). At the G20 Meeting of Foreign Affairs Ministers in Buenos Aires on May 20-21, 2018 (third time this happened in the G20’s history), when it came to the 2030 Agenda, Mexico’s Secretary of Foreign Affairs Luis Videgaray “underscored the impact of new technologies in sustainable development, especially artificial intelligence”. He encouraged the G20 members to take part in the UN Science, Technology and Innovation Forum, concluding that G20 “clearly has a role to play in this area”.

The future of food (security) is of particular relevance for a country relying on agricultural exports for its economic growth. Obviously, the Southern Cone countries and Brazil sharing similar dependency as Argentina would not fare well with increasing protectionist measures imposed by the US. There is also the issue of nailing down the preferential trade agreement between Mercosur and the EU (sensitive issues are import quotas on beef and ethanol). It will be interesting to see how the WTO ministerial conference in Buenos Aires in December will pick up on possible declarations by the G20 on these topics (or, perhaps, the absence thereof); trade and investment liberalization, multilateralism and protectionism.

Certainly, Argentina’s G20 presidency may prove beneficial for South America as a whole, but the domestic political-economic context for President Macri’s ambition to put Argentina on the G20 map could have been brighter, and relying on supposedly good interpersonal relations with US President Donald Trump might not make any difference at the negotiation table. As Guy Edwards, research fellow and co-director of the Climate and Development Lab at Brown University put it: “Argentina’s G20 presidency is a bittersweet moment for President Macri. It is a big opportunity to advance Argentina’s foreign policy goals such as improving relations with the United States and Europe and rejuvenating Mercosur. It is also wrought with difficulties. […] On free trade and climate change, Argentina can improve relations with Europe and China while integrating the Paris Agreement into its G20 presidency. On climate change, Argentina is well placed to advance the G20’s agenda.” In fact, Argentina was the first country to submit a revised national climate action plan as part of the Paris Agreement. The linking of discussions on the future of work with the shift to a low-carbon economy, for forthcoming G20 presidencies, could hopefully be reckoned as a major contribution by this G20 presidency.

Prospects for a “Latin American G20 agenda”

If “Latin America’s G20 agenda is the G20’s agenda”, this aspiration has to be pondered in relation to specific country challenges: Can President Macri weather the storm of the crisis-ridden economy and corruption scandals involving past and present political leaders? What effects will Mexico’s next President López Obrador’s ambiguous rhetoric regarding neoliberal economic principles have on the G20 members? What will be the outcome of Brazil’s general election in October (the uncertainty regarding the “Lula factor”)? Given these uncertainties, it might be too early to talk about a distinct “Latin America agenda in the G20”, but, if during future G20 presidencies, the three members manage to hold a common front in specific topics that were reflected in Argentina’s G20 presidency; especially future of work in the digital age coupled with the shift to a low-carbon economy, sustainable infrastructure for development and food security, and safeguarding multilateralism, then this drive could hopefully withstand conjunctural external pressures and translate into a lasting effort.

The situation of “G19 + 1” is very unfortunate when certain themes are being discussed in the G20 (climate change, trade), nevertheless, the Argentinian G20 team should push for the importance of keeping the US engaged with the club. Then, the collective agony of markets and states following the Brexit referendum and the uncertainty whether Britain actually will leave the European Union or not is yet another example of economic nationalism and crisis for multilateralism. A common problem for both developed and developing countries is precisely the integration of migrants on the job market, where structural failures produce increasing poverty and socioeconomic inequality. Therefore, the issue of inclusive, sustainable growth coming from investments in (higher) education, R&D and Innovations, sustainable infrastructure is a particularly suitable “connection” with the 2030 Agenda. Here, the G20 Development Working Group (DWG) plays an essential role for encouraging a cross-cutting perspective on this process across all G20 work streams.

Next year, Buenos Aires will host the Second High-level United Nations Conference on South-South Cooperation (known as BAPA+40 Conference), from 20 to 22 March 2019, and as part of the G20 troika then, it is likely that Argentina will push for this item on the G20 agenda.

Lastly, there is a proposal in the making to design a particular initiative targeting The Caribbean countries, pushed for by Mexico, in particular, together with Argentina and Brazil that hopefully could find its way to the final declaration of the G20 summit in November, thereby procuring a “Latin American badge”. Focus is on resilience, prevention of natural disasters, and other climate change-related actions. Being an agenda-setter but not an implementer, the G20 can send a joint message to home audiences and target audiences but then it is up to national policy-makers to follow suit. At least, initiatives like this one that seek to escape short-term interests but rather aim for medium and long-term ambitions, is a sign that the G20 is concerned with sustainable commitments.

Der Beitrag Latin American cooperation towards the G20 Summit in Buenos Aires erschien zuerst auf International Development Blog.

Latin American cooperation towards the G20 Summit in Buenos Aires

5. September 2018 - 9:18

What might become of Latin America’s presence in the G20 following Argentina’s presidency? If previous attempts to forge a common platform for Argentina, Brazil and Mexico have not left a lasting memory, perhaps this time around it looks different? Indeed, the Sherpas decided to tighten dialogue since fall 2017 with the view to “translate different regional outlooks into a representative stance” that hopefully could spill over onto the next G20 presidency.

It remains to be seen whether Argentina’s early “active, inclusive and pragmatic” approach will translate into greater political goodwill on the side of the other G20 partners to address some of the priorities set forward by this presidency.

Latin America in the G20

According to Jorge Argüello, president of Fundación Embajada Abierta in Argentina and former ambassador to the United States (US) and the United Nations: “By not being able to define a common regional agenda, the Latin American bloc […] has struggled to incorporate Latin American priorities into the global agenda and has thus faced an additional historical disadvantage in G20 debates.” He points out that “care of natural resources and the fair commercialization of raw materials; the promotion of human resources and quality employment; investment in housing, education and health; and unrestricted respect for the right to migrate” are topics of great relevance for this region and could well be included on the G20 agenda.

For their part, Heidi Lough and Juan Cruz Díaz, both at Cefeidas Group in Buenos Aires, argue that “A common belief in the need for a regional voice existed in Hamburg. However, internal difficulties—notably a recently reshuffled foreign ministry in Argentina, and tumultuous political events in Brazil—complicated the ability to put forward a coherent, shared vision.” They conclude: “Argentina should seize the opportunity to provide the regional leadership needed to work toward Latin American alignment on key global issues.”

“The Latin American G20 agenda” through Argentina’s priorities

President Macri has expressed the ambition to make sure the G20 sits close to its professed goal of maintaining international financial stability through global financial and macroeconomic governance. This implies focusing on traditional “hard politics” during summits, alongside coordination on the implementation of the 2030 Agenda for Sustainable Development (comprising 17 Sustainable Development Goals), migration and terrorism. The priorities for Argentina’s G20 presidency are, in fact, of much wider relevance than the mere label “Latin American G20 agenda”: future of work in the digital age, sustainable infrastructure for development, and sustainable food future/food security. The fight against corruption tied to discussions on economic growth is another likely issue among the “top items” of this G20 presidency.

A common challenge for the big emerging economies like Brazil and Mexico is automation of low-skilled jobs and the need for investing more in Research and Development and Innovation to meet this transition and improve participation in global value chains. Facing rapid advances in technological development, digitalization and Artificial Intelligence, the G20 should provide with stronger endorsement of challenges confronting the public and private sectors of employment and education, and seek to pinpoint their needs (thereby by extension putting pressure on national governments to invest more in these areas). At the G20 Meeting of Foreign Affairs Ministers in Buenos Aires on May 20-21, 2018 (third time this happened in the G20’s history), when it came to the 2030 Agenda, Mexico’s Secretary of Foreign Affairs Luis Videgaray “underscored the impact of new technologies in sustainable development, especially artificial intelligence”. He encouraged the G20 members to take part in the UN Science, Technology and Innovation Forum, concluding that G20 “clearly has a role to play in this area”.

The future of food (security) is of particular relevance for a country relying on agricultural exports for its economic growth. Obviously, the Southern Cone countries and Brazil sharing similar dependency as Argentina would not fare well with increasing protectionist measures imposed by the US. There is also the issue of nailing down the preferential trade agreement between Mercosur and the EU (sensitive issues are import quotas on beef and ethanol). It will be interesting to see how the WTO ministerial conference in Buenos Aires in December will pick up on possible declarations by the G20 on these topics (or, perhaps, the absence thereof); trade and investment liberalization, multilateralism and protectionism.

Certainly, Argentina’s G20 presidency may prove beneficial for South America as a whole, but the domestic political-economic context for President Macri’s ambition to put Argentina on the G20 map could have been brighter, and relying on supposedly good interpersonal relations with US President Donald Trump might not make any difference at the negotiation table. As Guy Edwards, research fellow and co-director of the Climate and Development Lab at Brown University put it: “Argentina’s G20 presidency is a bittersweet moment for President Macri. It is a big opportunity to advance Argentina’s foreign policy goals such as improving relations with the United States and Europe and rejuvenating Mercosur. It is also wrought with difficulties. […] On free trade and climate change, Argentina can improve relations with Europe and China while integrating the Paris Agreement into its G20 presidency. On climate change, Argentina is well placed to advance the G20’s agenda.” In fact, Argentina was the first country to submit a revised national climate action plan as part of the Paris Agreement. The linking of discussions on the future of work with the shift to a low-carbon economy, for forthcoming G20 presidencies, could hopefully be reckoned as a major contribution by this G20 presidency.

Prospects for a “Latin American G20 agenda”

If “Latin America’s G20 agenda is the G20’s agenda”, this aspiration has to be pondered in relation to specific country challenges: Can President Macri weather the storm of the crisis-ridden economy and corruption scandals involving past and present political leaders? What effects will Mexico’s next President López Obrador’s ambiguous rhetoric regarding neoliberal economic principles have on the G20 members? What will be the outcome of Brazil’s general election in October (the uncertainty regarding the “Lula factor”)? Given these uncertainties, it might be too early to talk about a distinct “Latin America agenda in the G20”, but, if during future G20 presidencies, the three members manage to hold a common front in specific topics that were reflected in Argentina’s G20 presidency; especially future of work in the digital age coupled with the shift to a low-carbon economy, sustainable infrastructure for development and food security, and safeguarding multilateralism, then this drive could hopefully withstand conjunctural external pressures and translate into a lasting effort.

The situation of “G19 + 1” is very unfortunate when certain themes are being discussed in the G20 (climate change, trade), nevertheless, the Argentinian G20 team should push for the importance of keeping the US engaged with the club. Then, the collective agony of markets and states following the Brexit referendum and the uncertainty whether Britain actually will leave the European Union or not is yet another example of economic nationalism and crisis for multilateralism. A common problem for both developed and developing countries is precisely the integration of migrants on the job market, where structural failures produce increasing poverty and socioeconomic inequality. Therefore, the issue of inclusive, sustainable growth coming from investments in (higher) education, R&D and Innovations, sustainable infrastructure is a particularly suitable “connection” with the 2030 Agenda. Here, the G20 Development Working Group (DWG) plays an essential role for encouraging a cross-cutting perspective on this process across all G20 work streams.

Next year, Buenos Aires will host the Second High-level United Nations Conference on South-South Cooperation (known as BAPA+40 Conference), from 20 to 22 March 2019, and as part of the G20 troika then, it is likely that Argentina will push for this item on the G20 agenda.

Lastly, there is a proposal in the making to design a particular initiative targeting The Caribbean countries, pushed for by Mexico, in particular, together with Argentina and Brazil that hopefully could find its way to the final declaration of the G20 summit in November, thereby procuring a “Latin American badge”. Focus is on resilience, prevention of natural disasters, and other climate change-related actions. Being an agenda-setter but not an implementer, the G20 can send a joint message to home audiences and target audiences but then it is up to national policy-makers to follow suit. At least, initiatives like this one that seek to escape short-term interests but rather aim for medium and long-term ambitions, is a sign that the G20 is concerned with sustainable commitments.

Der Beitrag Latin American cooperation towards the G20 Summit in Buenos Aires erschien zuerst auf International Development Blog.