G20 wraps up avoiding a trade war… for now

German Chancellor Angela Merkel did not confirm whether the G20 agreement would be enough to avoid new tariffs by US President Donald Trump. [G20 Presidency]

The group of the 20 most powerful nations agreed on Saturday (8 July) to keep markets open, while German chancellor Angela Merkel urged the leaders to address steel overproduction to avoid a potential trade war.

Maintaining a cooperative and open multilateral system was the prudent goal set by Merkel, who hosted the two-day G20 summit that ended today in Hamburg.

The chancellor expressed her satisfaction with the inclusion in the final conclusions of a reference to maintaining open markets and fighting against protectionism.

Heated G20 hopes to bring new life to global cooperation

The world’s twenty most powerful countries will try to build a new consensus on global issues such as trade and the fight against climate change amid growing tensions among the largest partners.

She also highlighted that a rule-based system “plays a crucial role” to ensure that the benefits of globalisation reach everybody.

“We will keep markets open noting the importance of reciprocal and mutually advantageous trade and investment frameworks and the principle of non-discrimination, and continue to fight protectionism including all unfair trade practices and recognise the role of legitimate trade defence instruments in this regard,” read the final text agreed by the G20 leaders.

But this pledge was not sufficient for Merkel to rule out a new round of tariffs by US President Donald Trump. He is considering to pass new punitive measures against various imports in the coming days, including German products, as a response to the dumping of steel into the US market.

“I cannot predict what is going to happen tomorrow, or the day after”, Merkel said.

Steel overcapacity, North Korea squeeze into G20 discussions

As the G20 summit kicks off in Hamburg (Germany), China’s steel overcapacity and the response to North Korea will play an important part in the leaders’ discussions.

In order to avoid a trade war, G20 nations agreed to provide information by August about the steel excess capacity, so that the OECD can prepare a report by November with potential solutions.

“We have quite an ambitious timetable,” Merkel admitted. But if countries fail to meet the deadline set, “we will not be able to solve this [issue] at a multilateral forum”, she warned.

If countries continue dragging their feet in the steel excess capacity forum, Merkel added that the result could be the imposition of retaliatory measures.

European Commission President, Jean-Claude Juncker, warned the day before that if Trump imposed new tariffs on European products, the EU would be ready to respond “within days”.

But even if G20 nations finally overcome the issue steel overcapacity, the German chancellor warned that other problems may emerge as trade issues.

Trump alone

Merkel succeeded in maintaining the anti-protectionism wording that the G7 summit adopted last May.

But she did not achieved a joint statement by all G20 leaders, including Trump, on climate and energy.

A common position on this topic was a priority for the German Presidency of the G20.

Following Trump’s decision to withdraw from the Paris agreement, Berlin wanted a joint statement referring to the need to limit CO2 emissions and an action plan to implement it.

But after exhausting talks, the negotiators finally conceded that the US would not support the joint text.

19-against-one unity on climate under threat at G20

Angela Merkel wants all countries in the group except the US to sign up to a strong statement supporting the Paris Agreement but Saudi Arabia and others may resist.

As a result, a paragraph was included in the G20 joint statement that “without any doubt says what the US want and what the rest of countries want”, as Merkel said.

“The United States of America states it will endeavour to work closely with other countries to help them access and use fossil fuels more cleanly and efficiently and help deploy renewable and other clean energy sources, given the importance of energy access and security in their nationally- determined contributions,” read the conclusions.

Meanwhile, the other nations reinstated that the Paris agreement is “irreversible”, and adopted a G20 Hamburg Climate and Energy Action Plan for Growth.

The limited results the G20 achieved to dispel the risk of a trade war or to bring the US back to a minimum consensus to fight against climate change proved its difficulties to serve as a forum of global governance.

Hamburg braces for violent anti-G20 protests

Hamburg braced for potentially violent ‘Welcome to Hell’ protests against globalisation and the rich on the eve of the G20 summit on Thursday (6 July), with riot police on high alert deployed all over the centre of Germany’s second-largest city.

The massive anti-globalisation and anti-G20 demonstrations seen in Hamburg over the last days further challenged the existence of the forum.

Merkel expressed her support for the peaceful demonstrations but condemned the “brutal attacks” against the police of a minority of violent protesters.

She praised the “tremendous job” done by the security forces.

Merkel added that the authorities would look at how they can offer compensation for the personal damage caused by the riots “as quickly as possible” and with the less possible red tape.