G20 Summit 2018

The 2018 G20 Summit, held in Buenos Aires, Argentina concluded on December 1. The G20 final communique reaffirmed the group's commitment to further strengthening of the global financial safety net.

Background

The G20 (or Group of Twenty) is an international forum for the governments and central bank governors from Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States. It was founded in 1999 with the aim of discussing policy pertaining to the promotion of international financial stability. Membership of the G20 consists of 19 individual countries plus the European Union (EU). The EU is represented by the European Commission and by the European Central Bank. Collectively, the G20 economies account for around 90% of the gross world product (GWP), 80% of world trade, two-thirds of the world population, and approximately half of the world land area.

The growth of Brazil, Russia, India and China (the BRIC countries) has driven the growth of the global economy and increased the importance of the G20. The G-7 countries, which includes Canada, France, Germany, Italy, Japan, the UK and the United States, grow slower than emerging markets do, making the BRIC countries critical for ensuring continued global economic prosperity. In the past, the leaders of the G-7 could meet and decide on global economic issues without much interference from the BRIC countries. These countries have become more essential to providing for the needs of the G-7 nations. For example, Russia delivers most of Europe’s natural gas, China produces much of the manufacturing for the United States, and India provides high-tech services for the world.

Analysis

Nineteen leaders of the world's biggest economies and a representative of the European Union gathered in Buenos Aries, Argentina for the Group of 20 summit from 30 November to 1 December.

The focus was on a range of issues and high-stakes meetings, including one between US President Donald Trump and his Chinese counterpart Xi Jinping and the signing of the US-Mexico-Canada Agreement (USMCA). Saudi Crown Prince, Mohammed bin Salman's appearance at the summit also prompted some protests over the issue of the murder of Saudi writer Jamal Khashoggi.

China and the United States have agreed to halt additional tariffs as both countries engage in new trade negotiations with the goal of reaching an agreement within 90 days. After a dinner meeting between President Donald Trump and Chinese leader Xi Jinping at the Group of 20 summit in Buenos Aires, Trump agreed not to boost tariffs on $200bn of Chinese goods to 25 percent in January as previously announced, while Beijing agreed to buy an unspecified but "very substantial" amount of agricultural, energy, industrial and other products.

British Prime Minister Theresa May told Saudi Crown Prince Mohammed bin Salman that he should take action to prevent the recurrence of incidents like the murder of journalist Jamal Khashoggi.

French President Emmanuel Macron and Saudi Crown Prince Mohammed bin Salman discussed oil prices and the role Saudi Arabia can play in its fluctuations.

Russian President Vladimir Putin will have a brief impromptu meeting with US President Donald Trump but did not reach a resolution to Russian hostilities in Crimea.

G20’s final communique said the members reaffirm 'commitment to further strengthening the global financial safety net with a strong, quota-based, and adequately resourced IMF at its centre’.

Counterpoint

Thousands of demonstrators flooded a downtown avenue in Buenos Aires to protest the Group of 20 taking place in the Argentine capital. Protestors waved flags and held up banners with slogans that read "Go away G-20" and "Go away Trump.” Saudi Crown Prince Mohammed bin Salman's appearance at the summit also prompted some protests over the murder of Saudi writer Jamal Khashoggi.

Assessment

Our assessment is that the G20 Summit is essential to maintaining growth, productivity and international cooperation. We believe that escalating trade tensions, including car tariffs and Brexit, pose a threat to the global economy, and that groups such as the G20 safeguard against risks by ensuring dialogue and actions to enhance confidence between governments and central banks.

India Watch

India was scheduled to host the G20 summit in 2021. Prime Minister Narendra Modi has requested Italy to host the summit in 2021 and allow India to host it in 2022, on the occasion of the 75th year of India’s independence.