THE G20 SUMMIT IN BUENOS AIRES:
An opportunity to redirect the multilateral global trading system?
by Félix Peña
English translation: Isabel Romero Carranza
Building consensus, understood as the result of bridging
the gap between the often divergent interests and perspectives of the
G20 countries, is the main challenge that explains the origin of the G20
Summits. This is still valid in the period of the Argentine presidency
In the light of recent events, it seems clear that this objective
remains central to the successful functioning of the G20. Today, the issue
of global trade governance is perhaps as important as the issue of financial
governance was at the origin of the Summits.
The relevance of the so-called "commercial war" has grown
in the last month. It involves, in particular, the United States on the
one hand and China and the European Union, on the other. It threatens
to continue growing in its scope and potential ramifications.
In a world of marked uncertainties like the present one, it is difficult
to make predictions about the evolution of a complex issue such as the
one that is now affecting the governance of the international trading
system. This situation may be reflecting factors that could lead to a
generalized global crisis. Or, on the contrary, it could just be the consequence
of tactical movements that form part of a deeper negotiation of a clear
geopolitical and commercial scope.
For our country and not only for its President, Mauricio Macri, the
G20 Summit will thus pose a challenge. In this meeting of 20 leaders from
relevant countries, attention will be focused on the real capacity they
have to build consensus. Precisely in the agenda of the Argentine presidency
of the G20 Summit, the focus was placed on its function of generating
dialogues aimed at building consensus. That is, consensus on relevant
issues that are effective and efficient. The ability to help build consensus
will then be the real challenge of the Summit for the Argentine presidency.
The "vision" of the period of the Argentine presidency
in the G20:
In his "vision" about the period of his presidency of the G20
for the year 2018, the President of Argentina, Mauricio Macri, placed
the focus on three priorities: the future of work; the infrastructure
needed for development, and the sustainability of the food supply. However,
the main focus of the proposal that has been made relates to the objective
which originated the objective of the G20 Summits and that, twenty years
later, is still the main challenge.
This objective is, above all, methodological. It has to do with the idea
of "consensual construction". That is, how to build consensus
as the main challenge behind the origin of the Summits, an idea that is
still valid in the presidential period of Argentina. The construction
of consensus as the result of building bridges between the often diverging
interests and perspectives of the G20 countries.
At the beginning of the G20 Summits it was noted that the institutions
of global governance originated in the post-war world order were no longer
able to build the necessary consensus in a context in which power was
dispersed among multiple players. There were diversity of interests and
perspectives but no mechanisms to facilitate their convergence. The financial
level was, at that moment, the most obvious but in no way the only one.
The absence of an effective international order evoked once again the
ghost of chaos as a byproduct of the fragmentation of world power, without
institutions that had the capacity to articulate diverse interests.
The "vision" of the Argentine presidency recognizes in the
G20 "an ambit for leaders to engage in a permanent and constructive
dialogue on the most pressing global issues of the 21st Century."
These are global issues that, by their very nature, cannot be addressed
just by a few countries. The issue of climate change is an example, but
not the only one. It requires building consensus, at least among the most
relevant countries in the distribution of world power and, therefore,
with the capacity to articulate the interests of many others.
The document of the Argentine presidency (see its text on: https://back-g20.argentina.gob.ar/)
also expresses the need for our country to reflect the position of the
Latin American region as a contribution to the construction of global
consensus. It then adds that an important value of the G20 is "to
provide a mechanism to seek consensus and strive collectively in the pursuit
of our shared objectives." It also points out that "we will
address the issues on the current G20 agenda in a way that will emphasize
the continuity of the dialogue and the search for common ground."
This explains the methodology used in the annual development of the G20:
sector wide dialogues that are expected to lead to global consensus within
the scope of the yearly Summit.
In the abovementioned document stating the Argentine vision, the three
key questions are: What is dialogue without consensus? What is power without
equity? What is development without sustainability? It later states that
the theme proposed for this year's G20 "Building a consensus for
equitable and sustainable development" aims to "generate a global
conversation about how to achieve this objective". Consensus and
how to achieve it becomes thus the essence of the annual G20 debates.
These are debates geared towards collective action.
In light of recent events, especially at the G7 Summit in Quebec (see
it is clear that this objective is still key to the successful functioning
of the G20. The issue of global trade governance is perhaps as important
as financial governance was when the Summits originated.
How to reach everybody is another question that is asked when concluding
the document with the "Argentine vision". The text stresses
that, in order to achieve this goal, it would be necessary to have "the
commitment not only of governments but of all sectors of society ".
For this purpose it is stated that "we will promote a comprehensive
and plural dialogue". Think20, which will have its meeting in September
in Buenos Aires, is mentioned among other relevant ambits for such dialogue.
This leads to a key question to be asked by those involved in the T20:
To what extent do their dialogues contribute to build consensus on how
to address relevant issues of the G20 agenda? And also: What are the relevant
issues to be addressed and what would be the contributions needed for
such approach to be successful?
The context of the global trading system during the Argentine presidency
of the G20:
The importance of the so-called "commercial war" has grown
in the last month. It involves, in particular, the United States, on the
one hand, and China and also the European Union, on the other. It threatens
to continue growing in its dimensions (trade flows involved) and in its
potential ramifications (impacts on other areas including the international
financial and political, security and, ultimately, the peace between nations).
In a world of marked uncertainties like the present one, it is difficult
to make forecasts about the evolution of such a complex issue as the one
that is affecting the governance of the international trading system.
All interpretations are valid. It could be reflecting factors that may
lead to a generalized global crisis or, on the contrary, tactical movements
as part of a deeper negotiation especially between the US and Chinaof
a clear geopolitical and commercial scope, from which the progress towards
the denuclearization of the Korean Peninsula should not be excluded.
In any case, the current "commercial war" is an issue whose
immediate origin albeit not the only one dates back to the
questioning by the current American government of the multilateral trading
system institutionalized in the WTO, originated precisely at the initiative
of Washington when the GATT was negotiated at the end of the Second World
War. Today, the US government considers it obsolete, at least in terms
of the rules referring to three of its main elements: the principle of
commercial non-discrimination, embodied in the unconditional clause of
the most-favored nation that comes from the old GATT; the commitments
in matters of commercial defense, and the mechanism for the settlement
of commercial disputes. Hence, the shift of the current American trade
policy towards bilateralism, which implies placing the particular interests
of the US above the multilateral rules, expressed in the idea of "America
One of the consequences of the current trends would be the fragmentation
of the commercial system in several preferential clubs limited to groups
of countries not necessarily belonging to the same region. One example
of these is the Transpacific Partnership (TPP). Despite its reference
to the Pacific region, it is open to any country in the worldas
stated by its Article 4, Chapter 30which would explain why, recently,
a Minister of the government of Teresa May pointed out that the United
Kingdom could eventually adhere to it once the Brexit was concluded. Nothing
excludes the possibility that, in spite of all the noise, the US might
return to the TPP even along with China, among other countries. Another
"private club" of preferential trade would be the Regional Comprehensive
Economic Partnership (RCEP), which would include sixteen Asia-Pacific
countries -from ASEAN, China, India, Japan, Australia and New Zealand-,
which together add up to a population of 3.5 billion. We do not know yet
if it would also be open to countries from other regions. They have just
held their last ministerial meeting in Tokyo at the beginning of July
and they hope to conclude the negotiation by the end of this year.
The challenges of the G20 Summit in a relevant and complex global
The points mentioned above confirm our impression of the complexity and
relevance of the global scenario in which the November G20 Summit of Buenos
Aires will take place. And we are referring only to one of the many issues
that the leaders of the twenty countries and their guests will have to
address. Precisely on the subject of global trade governance, the previous
Summit, held in Hamburg in 2017, could not produce any substantive agreement.
Moreover, the recent G7 Summit, held in June of this year, could not even
conclude with a final statement. In that opportunity the prevailing sulkiness
Thus, the G20 Summit will pose a challenge for our country, not only
for its President Mauricio Macri. In this meeting of twenty leaders from
relevant countries the attention will be focused on the real capacity
they have to build consensus. Precisely in the agenda of the Argentine
presidency for the G20 Summit the focus was placed on its role for generating
dialogues aimed at building consensus. That is, consensus on relevant
issues that prove to be effective and efficient. The ability to help build
consensus will then be the real challenge for the Argentine presidency.
The effects on the image of our country will transcend the Summit itself.
In this perspective, for our country and for the President acting as
host, the relevance and the challenges of the Summit and of the entire
process prior to its realization involve demonstrating that Argentina
is a country where dialogue and consensus building are valued and where,
as part of the Latin American region, there is capacity to seek conditions
to enable "convergence in diversity" between nations, as was
stated in 2014 by the former government of Chile. with the support of
the countries of the region. (See the April
2014 issue of this newsletter on http://www.felixpena.com.ar/).
The presence of all the summoned leaders; the environment in which the
November Summit takes place; the relevance and potential effectiveness
of what is agreed, as reflected in the final statement, and the official
words by President Macri in which he will state the Argentine position
and, as far as possible, that of the other participating Latin American
countries, will be other indicators that will help evaluate, in a national
and regional perspective, the concrete results of the Summit.
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Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More