G20 Statement Skirts Trade Tensions, Backs WTO Reform

by Bamidele Ogunberu Last updated on December 3rd, 2018,

Buenos Aires, Argentina : The G20 grouping of industrialized nations skirted current global trade tensions but threw their weight beyond the reform of the World Trade Organization in a joint statement titled “G20 Leaders’ declaration: building consensus for fair and sustainable development”.

The United States reaffirmed its commitment to withdraw from the Paris Climate Accord, while G20 signatories to the agreement declared the pact irreversible and said they would fully implement it.

G20 leaders vowed to overhaul the multilateral trading system after saying it “fell short of its objectives”, as they struck a compromise that exposed deep divisions over climate, migration and the rules of global commerce.

In the  joint statement the leaders said the multilateral trading system had made a “contribution” to growth, development and innovation but there was “room for improvement”. They promised to overhaul the World Trade Organization, the Geneva-based body which has been heavily criticised by the Trump administration, with progress to be reviewed by the middle of next year.

Frictions over trade dominated many of the discussions at the summit in the Argentine capital, as US president Donald Trump and Xi Jinping, the Chinese president, prepared to meet for a highly anticipated dinner on Saturday night to attempt to defuse the trade tensions between the countries.

The fact that a joint statement was signed by the heads of the world’s 20 most powerful governments was in itself a victory for the Argentine hosts, given fears that the summit could end in failure with no agreement for the first time in the group’s 10-year history. Until the last minute on Saturday, it was unclear whether there was sufficient consensus among the leaders for a positive outcome.

Last month, a meeting of Asian leaders at the APEC summit in Papua New Guinea ended without agreement for the first time in that gathering’s 29-year history, and this year’s G7 in Canada wrapped up with Mr Trump disavowing the conclusions of the world’s largest industrialised nations.

On Saturday morning, Mr Trump cancelled a press conference out of “respect” for the former president George HW Bush, who died on Friday. However, in a tweet Mr Trump said he had had “such great success in our dealing with various countries and their leaders at the G20”.

The G20 summit had opened on Friday with world leaders exchanging greetings at the Costa Salguero conference centre near the Argentine capital’s riverfront. Angela Merkel, the German chancellor, was absent from the first sessions after being delayed by a technical fault on her plane, but was able to attend a dinner at the Colon theatre in the heart of Buenos Aires.

While formal talks proceeded without much friction, behind the scenes officials were haggling over the joint statement and other sources of tension. There was a split in attitudes towards Mohammed bin Salman, the Crown Prince of Saudi Arabia, who was making his return to the world stage after the assassination of journalist Jamal Khashoggi, allegedly at the hands of a Saudi hit squad. While Vladimir Putin, the Russian leader, and Xi Jinping, the Chinese president, held warm encounters with him, EU leaders including Emmanuel Macron of France and Theresa May of the UK pressed him to include international experts in the murder inquiry and find a solution to curb the Saudi-led war in Yemen, which has triggered a humanitarian crisis.

Trade was another source of tension, and has been ever since Mr Trump took power in 2017. He has imposed tariffs on friend and foe while questioning the multilateral order and the WTO. The US has also pulled out of the Paris climate accord, inflicting a heavy blow on global efforts to tackle global warming, and has sought to curb migration, another policy stance which has put it at odds with some other world leaders.

G20 Statement Calls For Setting Global Standards To Regulate Cryptocurrency

The leaders of the world’s 20 major economies vowed to step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated.

The joint statement affirms that an open financial system is crucial to support economic growth.

“We will continue to monitor and, if necessary, tackle emerging risks and vulnerabilities in the financial system; and, through continued regulatory and supervisory cooperation, address fragmentation. We look forward to continued progress on achieving resilient non-bank financial intermediation,” the G20 leaders said in the declaration.

“We will regulate crypto assets for anti-money laundering and countering the financing of terrorism in line with FATF [Financial Action Task Force] standards and we will consider other responses as needed,” the statement says.

In the wake of the growing popularity of the crypto trade and the frauds and risks it entails, pressure is mounting on governments to develop standards for crypto regulations.

The European Parliament earlier this year had recommended that regulations concerning virtual currencies should be harmonized across jurisdictions, and that investment in cryptos should be taxed similarly to investment in other financial assets.

A British parliamentary committee in August had called on the government to introduce regulation to protect investors from the current “Wild West” situation in the crypto-asset market.

Only very few countries, such as Gibraltar, have introduced regulations for blockchain-based businesses.

The risks involved in investments in virtual currencies include possibility of fraud, bankruptcy of the issuer or intermediary, or speculative bubbles and bursts, among others.

Earlier BRICS leaders declared a common stand on WTO reform on the sidelines of the G20 summit.

BRICS leaders declare common stand on WTO reform on sidelines of G20

Leaders of the emerging economies’ bloc BRICS declared their common stand on the reform of the World Trade Organization (WTO) in Buenos Aires on Friday.

A communique was issued after Brazilian President Michel Temer, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Cyril Ramaphosa held an informal meeting on the sidelines of the Group of 20 (G20) summit.

BRICS countries agreed that full support should be given to the rules-based multilateral trading system represented by the WTO and to ensure transparent, non-discriminatory, open and inclusive international trade, according to the document.

The document called on all WTO members to oppose unilateral and protectionist measures that disaccord with WTO rules and withdraw such measures that are restrictive and discriminatory in their nature.

BRICS countries pledged to support the improvement of the WTO, increase its relevance and validity and safeguard the core values and basic principles of the WTO, and agreed that the WTO should embody the interests of all members, developing economies in particular.

They stressed the importance of the dispute settlement mechanism in the smooth operation of the WTO, calling for starting, as soon as possible, the selection process to fill the vacancies in the Appellate Body, so as to maintain the stable and valid operation of the dispute settlement system.

BRICS countries, according to the document, vowed to strengthen communication and cooperation and work with other members to ensure the WTO keep abreast of the times, advance inclusive growth and the participation of various countries in international trade, and play a significant part in global governance.

In the meantime, BRICS countries reiterated their commitment to world peace and stability and support for the central role played by the United Nations.

They pledged joint efforts to strengthen multilateralism, strive for an international order that is fair, just, equal, democratic and representative and implement the UN 2030 Agenda for Sustainable Development and the Paris Agreement on climate change.

BRICS countries reiterated that they would strengthen their strategic partnership and implement the achievements in their cooperation such as the Partnership on New Industrial Revolution, the document read.

The common stand demonstrated the constructive and responsible role played by BRICS countries in international affairs.

It also showed the aspiration of emerging market economies and developing countries to strengthen unity and cooperation and safeguard common interests.

India will host the G20 Summit in 2022, the 75th year of Independence, announced Prime Minister Narendra Modi in Buenos Aires on Saturday.

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Bamidele Ogunberu

Bamidele Ogunberu

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