What has been decided at the G20 summit in Argentina?

G20-Argentina-Plenary- Dos Aguas Post-Blog

Source: G20 Summit. 2018, Argentina. Plenary

The G20 annual summit brought the world leaders together on Friday, November 31, and Saturday, December, 1 in Buenos Aires (Argentina).

The central axes of this international event were trade and climate change. One of the main challenges of the G20 Leadership Summit has been “to achieve a more consensual dialogue” on international trade when protectionism is increasing.

Before we delve into this year’s meeting, let’s find out a bit more about the G20:

Origin and background of the Group of 20

The G20 began as a forum of finance ministers and Central bank presidents, being a result of the Asian Financial crisis. Its creation dates back to September 25, 1999, at a meeting of Ministers of Finance of the G7.

2008 was an important year for this group due to the “Heads of State” met for the first time in Washington. In this summit of G20 leaders, Western countries asked for assistance to countries with emerging markets. As an example, China had a large budget and commercial surplus, and therefore could avoid the global depression.[1] Thus, it was since the Washington summit in November 2008 and, also since the Pittsburgh Summit, when the G20 became the central instrument in the design and implementation of the multilateral response to the Great Recession.[2] Moreover, since that moment, the format of the summit changed, not only with the participation of the “Heads of State”, but also with representatives from United Nations, the International Monetary Fund (IMF), the World Bank and the Financial Stability Forum.

The G20 meets once a year and works at various levels, being the highest level the G20 leaders meeting at the annual summit. In addition, regular meetings are held by the G20 finance ministers, the central bank governors, and the Sherpas (this is the denomination received by the representatives of the “Heads of State” who meet regularly for the negotiation of the agenda, the analysis of the subjects and the documents of results).[3]

As a whole, the members of the G20 represent 85% of the global gross product, two-thirds of the world population and 75 % of the international trade.[4]G-20 2018 Summit-Dos Aguas Post/BlogWhat is new in trade and investment?

The issues relating to trade and investment are addressed in the G20 Trade and Investment Working Group (TIWG), with the aim of strengthening the G20 cooperation in trade and investment. Currently, the primary objective is to find an inclusive trading system that contributes to a fair and a sustainable development.

The three new thematic areas are agri-food global value chains; the New Industrial Revolution; and the dialog of the G20 on current developments in international trade. Special emphasis is also made on the particular situation of the micro, small and medium-sized enterprises, developing countries and women.[5] 

What was decided at the Summit in Argentina?

Certain agreements and positions on trade have been reached during the Summit of the G20, as well as an agreement about the need to modernize the World Trade Organization (hereinafter referred to as WTO). Another element that was discussed was the need to invest in infrastructure that it is resistant to the effects of climate change and natural disasters. According to the final declaration titled “Building consensus for fair and sustainable development” the WTO does not meet these goals and as a consequence there is a commitment to meet them in the near future. The Declaration establishes that the International trade and investment are important engines of growth, productivity, innovation, job creation and development. We recognize the contribution that the multilateral trading system has made to that end. The system is currently falling short of its objectives and there is room for improvement. We therefore support the necessary reform of the WTO to improve its functioning”. [6]

Another element that is emphasized in the declaration is the digitalization in the trade and the economy. In fact, it consolidates the need to continue working on artificial intelligence (AI), emerging technologies and new platforms of business. From that text we would like to stress the following extract: “To maximize the benefits of digitalization and emerging technologies for innovative growth and productivity, we will promote measures to boost micro, small and medium enterprises and entrepreneurs, bridge the digital gender divide and further digital inclusion, support consumer protection, and improve digital government, digital infrastructure and measurement of the digital economy […]”.[7]

Conclusion

The Summit concluded that there is a large consensus on the idea that international trade and investment are important regarding growth, productivity, innovation, the creation of employment and development. However, commercial relations between some of the participating countries are not at their best. Lets remember here the trade wars between the United States and China, which do not facilitate international trade.

From Dos Aguas Consulting, we work to inform and offer analysis on the events of international trade that may be of your interest. We are delighted to read your comments and suggestions. Don’t forget to subscribe!

Sources:

[1] Nancy Alexander (2011) Introducción al G20, Heinrich Böll Stiftung, page: 1. Available online (link) [Last accessed: 5.12.2018]

[2] Jorge Eduardo Navarrete (2012) Los otros 12: rol de los países energentes en el G20, at Günther Maihold, El G-20 y el nuevo orden internacional, Los cuadernos de la cátedra Humboldt de El colegio de México, page: 13.

[3] Nancy Alexander (2011) Introducción al G20, Heinrich Böll Stiftung, page: 3. Available online (link) [Last accessed: 5.12.2018]

[4] G-20 (2018) What is the G-20? Available online (link) [Last accessed: 5.12.2018]

[5] G-20 (2018) Trade and Investment. Available online (link) [Last accessed: 5.12.2018]

[6] G-20 (2018) G20 Leaders’ declaration. Building consensus for fair and sustainable development, paragraph 27. Available online (link) Last accessed: 5.12.2018]

[7] G-20 (2018) G20 Leaders’ declaration. Building consensus for fair and sustainable development, paragraph 9. Available online (link) Last accessed: 5.12.2018]

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