Parsing the Osaka G20 Communiqué
July 3, 2019On June 28-29, government leaders representing 85 percent of the global economy convened in Osaka, Japan, for the 14th Group of Twenty (G20) summit. While most media attention focused on developments outside the meeting room, including a trade truce between the United States and China, the discussions inside the room produced their share of fireworks—as well as some progress on the global economic agenda.
Q1: What did leaders say in their communiqué?
A1: As host, Japan outlined an ambitious set of themes for the summit to guide the two days of multilateral meetings, ranging from boosting global growth to reducing marine plastics. Tokyo was able to broker consensus on an Osaka Leaders’ Declaration (at 43 paragraphs, about one-third longer than the Buenos Aires Leaders’ Declaration of December 2018). Leaders endorsed the G20 mantra of promoting “strong, sustainable, balanced, and inclusive growth” and echoed the G20 Financial Ministers’ Communiqué earlier in June that global growth is currently low, with risks—including trade and geopolitical tensions—tilted to the downside. The leaders’ communiqué went on to lay out a broad agenda for global cooperation on a range of economic issues, including innovation and data flows, quality infrastructure investment, women’s empowerment, global health, and ageing. The Osaka Summit also produced side agreements on the digital economy and terrorism.
Q2: What were the main areas of contention?
A2: Trade, climate change, and data governance were key points of contention at Osaka. Trade once again dominated the discussions. Since 2008, when G20 leaders first met to address the global financial crisis, communiqués had routinely denounced protectionism. But for the second straight year, at the insistence of the United States, the Leaders’ Declaration lacked an explicit call to fight protectionism. However, leaders did include new language pledging to promote “a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment,” and to “keep our markets open.” Leaders also helpfully expanded on their call at Buenos Aires for reform of the World Trade Organization (WTO), highlighting the need to improve the function of the body’s dispute settlement mechanism ahead of the June 2020 WTO Ministerial Conference in Nur-Sultan, Kazakhstan. The communiqué also for the first time acknowledged “the complementary roles of bilateral and regional free trade agreements,” as long as they are in line with WTO rules.
On the environment, before leaders convened in Osaka, President Emmanuel Macron of France called climate change his “red line” and refused to endorse any declaration that did not express support for the Paris Agreement. For its part, the United States attempted to convince others to oppose language on Paris in the communiqué. In the end, 19 members of the G20 endorsed common climate language, with the United States once again reiterating in a separate paragraph its decision to leave the accord “because it disadvantages American workers and taxpayers.”
Differences also emerged on digital issues. Prime Minister Shinzo Abe of Japan had announced at the World Economic Forum in Davos earlier this year that he wanted the Osaka G20 summit to be remembered for having started a global conversation about data governance, coining the phrase “data free flow with trust” as the proposed organizing principle for this discussion. However, Japan faced considerable opposition and was unable to secure unanimous approval of Abe’s desired “Osaka Track,” with India, Indonesia, and South Africa opting out of the standalone digital economy declaration. China did sign on to the statement despite its very different approach to data governance, characterized by restrictions on cross-border data flows, cloud computing, and online speech.
Q3: Were there any positive surprises in the communiqué?
A3: Despite the policy differences and lack of concrete outcomes from the summit, the Osaka gathering had some value in setting an agenda for international cooperation on a number of key global challenges. The fact that leaders representing the bulk of the global economy drew attention to the problem of marine litter or the need for agreed rules on data flows has some value in driving lower-level cooperation on these issues.
One of the most interesting summit outcomes in this regard was leaders’ endorsement of the G20 Principles for Quality Infrastructure Investment. The six non-binding principles include assessing infrastructure investments on the basis of life-cycle cost considerations, paying due attention to environmental and social impacts, and ensuring debt sustainability. Since it announced its own “Partnership for Quality Infrastructure” in 2015, Japan has been a champion of high standards for infrastructure investment in a thinly disguised response to China’s Belt and Road Initiative, which has been criticized for not adhering to these standards. The fact that Japan was able to broker G20 agreement, with China’s concurrence, on a set of principles in this area can be counted as a major accomplishment from Osaka.
Q4: Now what?
A4: As with most such documents, the Osaka communiqué included vague commitments with no clear plans for implementation. The test of its value will lie in how the agenda it laid out is carried forward into other international forums. From August 25-27, leaders of the Group of Seven (G7) will meet in Biarritz, France, for their annual summit. Normally, this smaller group of like-minded countries could be expected to carry forward key agenda items from the G20. Last year’s G7, however, ended in disarray when President Donald Trump refused to sign the final communiqué and criticized the host Prime Minister Justin Trudeau of Canada. At this year’s gathering in France, differences are likely to emerge over trade, climate change, and global tax policy. Among other things, the United Kingdom and France have announced they will institute a digital services tax that primarily targets U.S. technology giants, raising the ire of both the Trump administration and Silicon Valley.
Meanwhile, Japan holds the G20 presidency through November of this year, at which point Saudi Arabia will take over the chair. Before December 1, Japan will have the opportunity to further advance its G20 priorities through ministerial meetings on labor and employment, health, and tourism, as well as a foreign ministers’ meeting on November 22-23. Expectations for Saudi Arabia’s G20 year remain low, especially on issues such as climate change and women’s empowerment. Italy and India are the next two G20 hosts in 2021 and 2022 respectively.
Matthew P. Goodman is senior vice president and holds the Simon Chair in Political Economy at the Center for Strategic and International Studies in Washington, D.C. Mayaz Alam, Simon Chair research intern, contributed to this piece.
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