Preview of the G20 Summit
November 20, 2018
H. ANDREW SCHWARTZ: (In progress) – communications officer. It’s so great to see all of you here. And it’s great to see or hear all of you who have dialed in. Thank you for dialing in.
We’re going to – I’m going to make this introduction brief. This is a – we’ve got an all-star lineup here, per usual. I want to go turn directly to my colleague Matthew Goodman, who is our Scholl Chair in International Business. Matt, please take it away.
MATTHEW GOODMAN: OK, great. Actually, Simon Chair in Political Economy.
MR. SCHWARTZ: Simon Chair.
MR. GOODMAN: That’s all right. I love the –
MR. SCHWARTZ: Scholl Chair, Simon Chair –
MR. GOODMAN: I love the Scholl Chair, actually. That’s right. Thanks. No worries. Thank you, Andrew.
So I’m going to start with the G-20 itself, and then we’re going to move down the line with all the regional and bilateral meetings that are being held along this trip.
So the president will be going to the 12th G-20 summit meeting in Buenos Aires, Argentina, on November 30th and December 1 st. This is actually the 10-year anniversary of the G-20 since it was elevated to leaders level in the middle of the global financial crisis, so it’s sort of a – that will be an interesting angle for some people as to what we have achieved and what we haven’t in 10 years.
The agenda, as usual, for the G-20 will center on one level around the traditional issues of growth, financial stability, international architecture reform and the financial architecture reform, and the other issues that have been added to the G-20 agenda over the years. Argentina, like all hosts, has set out its own themes for the year and it’s looking at three issues in particular: the future of work and the impact of technology on the workplace; infrastructure for development and making infrastructure and asset class for private investment, trying to standardize investments and prepare projects better for investment; and then thirdly, a sustainable food future. So those are the three big themes or areas of interest. And then they will also want to talk about empowering women, fighting corruption and a range of other issues that they’ve added to the sort of list of priorities.
You know, I would say that the G-20 has lost a lot of the steam that it once had in the global financial crisis in 2008, 2009. The last summits have been somewhat disappointing and marked by contention, particularly over trade-related issues. And I would expect that to be the case again. We saw a preview of this at the APEC, the Asia Pacific Economic Cooperation summit, in Papua New Guinea last weekend when there was a disagreement over the language on trade and the communique, and as a result there was no APEC communique for the first time in 25 years.
I think there probably will be a communique at the end or some kind of chairman’s statement, but it may well be that the trade language gets in the way of that. In previous years, there’s been a sort of compromise where the traditional language about open trade and fighting protectionism has been balanced with U.S. interests in reciprocal trade and the use of trade defensive measures, so that language may reappear if it – if it comes up. But I think that’s probably going to be one of the contentious things.
Meanwhile, there’s a lot to talk about on the growth story. Although the global economy is doing well, largely because the U.S. has been growing so strongly, there are clouds on the horizon and the IMF is worried about growth next year because of rising interest rates in the U.S., slowing Chinese growth, financial vulnerabilities in the emerging markets, including Argentina, and then even Italy is a country that’s at risk financially and there’s other problems in Europe. So there’s a concern about growth next year and that’ll be also a topic of conversation.
Incidentally, after Argentina, Japan will be hosting the G-20. They’re already involved in some of the preparations. Japan, you know, has more experience and capability in running these sorts of things, so you may see a bit of a Japanese contribution to this. After that it’s Saudi Arabia, so the G-20 is going to be in a challenging period after this, I think.
A final point I’ll make about one of the bilateral meetings because we don’t have our China colleagues here, so I’ll take this one. President Trump and President Xi Jinping of China are scheduled to meet on the margins of the G-20 summit. The exact timing of that is unclear, but they are scheduled to meet.
You know, obviously there will be discussion of many issues, including North Korea and other shared concerns. But trade is going to be central in that conversation. And obviously, the big question everyone’s asking is, is there going to be a deal or some kind of ceasefire? I’d say it’s probably 50/50 as to whether there will be a deal.
My personal guess – and I’m sticking my neck out here – is that there will be some kind of ceasefire agreed to largely because I think President Trump and President Xi both have an incentive to put this dispute on hold. You saw this morning again the stock market here has fallen pretty sharply and I think, you know, that’s putting a little bit of heat on President Trump to come to some sort of deal and not move ahead with tariffs. For Xi Jinping, their growth is slowing and I think there’s an interest in trying to get this behind them. So that’s a – that’s a 51/49 guess at best. I think there’s a good chance it’ll blow up and there may not even be a meeting. But I think my gut tells me there probably will be some sort of ceasefire.
So I will stop there, leave it to Jon.
JON B. ALTERMAN: Thank you very much.
Well, I was in the Middle East yesterday and as I was looking at my calendar I wondered whether I would have anything to say at this briefing. And then I got the news that the Saudis would be represented by the crown prince, Mohammed bin Salman, and suddenly I said, oh, I know what I’ll talk about at the briefing.
This is a really big deal because this represents the Saudis’ normalizing the crown prince’s role after the crown prince has had a very low profile. And this is a bold effort to force the issue of whether world leaders will talk to/work with Saudi Arabia. And if you’re going to work with Saudi Arabia, you will be working with the crown prince.
And I think in some ways this typifies the crown prince’s approach, which is not to be risk-averse, not to hold back, not to say now is not the time, but to say, no, we’re going to double down. And the king gave an address to the Consultative Council last week in which he didn’t – in which he didn’t criticize the crown prince – backed the crown prince, backed reforms. The Vision 2030 plan, which I would argue is imperiled by the world’s reluctance to deal with the crown prince, now has to confront the fact that the crown prince is the person to deal with. If you’re going to deal with Saudi Arabia, you will be dealing with the crown prince.
I don’t know that the world has figured out what to do about this yet. I don’t know if people have thought about whether they’re willing to have bilaterals with the crown prince. This is not a must-do for the Saudis. Last year the Saudis were represented by a minister, so it’s not necessary for the crown prince to be there with other heads of state, and the Saudis were perfectly happy in the past to have somebody at a lower level go. This is a decision from the Saudis, I think partly drawing on what they see as President Trump’s reaction and other reactions. They’re moving ahead, and the crown prince is the person to deal with if you’re going to deal with Saudi Arabia.
How this will play internationally I don’t know. It certainly is a risk for the crown prince. But I think there is a sense on the Saudi side that they are demonstrating to the domestic population the crown prince is back in the saddle, the worst of this crisis is over, and Saudi Arabia is moving forward. How the world will treat that reality at a time when Reuters just put out a story saying senior Saudis are talking about having Prince Ahmed, the uncle of the crown prince, possibly succeeding the king, pushing aside the crown prince, this plays into that. And it is a risky move because the crown prince certainly could be shunned at this meeting. The crown prince is betting that he can use this as a sign that he’s back in power, back in control, and that the worst effects of the Khashoggi affair are over.
It is too early to tell how this will play out. I suppose it’s still possible the crown prince, having announced he’ll come, will decide not to come because something will come up. But for Saudi Arabia, this meeting has become a big deal. As Matt suggested, the Saudis are hosting in two years. The crown prince is sending a signal that in two years’ time he will be even more in control, and the G-20 is clearly in his ambit and not being delegated to a minister as it was just last year.
HEATHER A. CONLEY: Well, thank you. Good morning, everyone. I’m going to talk a little bit pulling on Matt’s comment about Europe, and then I will turn to President Trump’s bilateral meeting with President Putin.
In fact, the story that we are all following so closely right now – hourly, if you will – is the ongoing discussions and finalizing of the British withdrawal agreement and its departure from the European Union. Prime Minister Theresa May on – tomorrow, Wednesday evening, goes to Brussels to conclude the deal. And it will be interesting to see – we’ll be doing lots of leader watching, I think, at the G-20: Prime Minister May and her interactions, and then, obviously, what the domestic context is for her and her own leadership challenges.
And I think what’s important to note about here is that in some ways global markets are also impacted by events. And certainly the potential for failure for the House of Commons to pass the withdrawal agreement is certainly one of those shocks, and the potential that it could mean to a no deal on March 29th of 2019 is certainly very impactful.
What Matt also mentioned about the potential ceasefire between the United States and China, it’s very reflective of this because I sort of feel like I’ve been to my own ceasefire in July when European Commission President Jean-Claude Juncker was here in July and it was a very positive U.S.-EU statement. And to be honest with you, we do not know where U.S.-EU talks are. U.S. tariffs are still in place against the European Union. European Union countermeasures are still in place against the United States. It’s unclear what this negotiation will cover. There’s no negotiating mandate from the European Union. The United States would like to put agriculture into that agreement. So even ceasefires cease to be solutions. And I think this is where we are also challenged. And we’ll see if there’s any interaction between Jean Claude Juncker and President Trump to see exactly what that looks like moving forward.
But obviously the main event after President Trump’s meeting with President Xi is his bilateral meeting with President Putin. I feel like we’re all taking a deep breath because we’re still, I think, in some ways, still in the aftermath of the last meeting of these two leaders in Helsinki, which in fact produced some of the most crippling draft legislation after that press conference, which imposed even more U.S. sanctions against Russia. That is still very much in draft legislation.
I will tell you that most of the information we receive about this potential summit comes from Russian government officials and Russian media. So I can only share with you what we are able to understand. The Russian government tell us this will be a long and thorough meeting. I just can’t exactly tell you want the agenda will be of this long and thorough meeting. Certainly we think the focus will be on the INF Treaty, and the U.S. intention in due course to potentially withdraw from that treaty because Russia has been in material violation of the treaty for at least over four years.
President Putin met with his senior officials the other day and suggested there would be strong Russian reaction if the U.S. did withdraw. What we’re seeing now I think is the elevation of the U.S.-Russian bilateral relationship into where it is its most comfortable, and that is arms control. And we will see, again, if the president is prepared to begin that conversation or not. We are hearing reports that Vice President Pence mentioned on the side – on the margins of the APEC summit continued concerns about Russian malign influence in Europe. We have reports of potentially a Russian intelligence or a phishing operation against senior State Department officials. Clearly that continues unabated. We will see if there’s any difference of President Trump’s conversation about that with President Putin. But it’s highly doubtful.
The issues just get longer. There is no clear resolution or understanding between the United States and Russia on Syria. Continued concerns about Idlib. I’m sure Jon will mention that if we go around to Q&A. Absolutely no progress on Ukraine. Russian violation of sanctions vis-à-vis North Korea. We now see an uptick in Russian activity. Whether that’s in Africa, in Latin America, Cuba. We just see, again, Russia continuing to play its role of global spoiler.
So, again, I wish I had more insights to tell you exactly what President Trump will say to President Putin. We still don’t know what President Trump said to President Putin in July in Helsinki. But we’re hoping to find out more after their meeting in Buenos Aires. And with that, I’ll turn to Lisa.
LISA COLLINS: Great. Thank you. So I think there are two stories coming out of last week and the APEC meetings that could potentially impact the G-20 meeting and discussions about North Korea. I think one is the growing rift between the United States and China, and the failure to sign that joint statement at the APEC, as Matt mentioned a little earlier.
So first of all, I think G-20 would be a great opportunity to get a consensus statement on North Korea that makes clear that the world community is still expecting North Korea to fully and verifiably dismantle its nuclear weapons program. But in the afterlight of the APEC meetings, it’s unclear if that will actually happen. There will be of course discussions, as mentioned, between Xi and President Trump about the North Korean issue. But whether or not they’re able to get onboard and in line with other world leaders on this issue and make that part of a statement would be another issue.
And I think second of all, there was the statement by Vice President Pence on the sidelines of APEC that said that – that he said that he United States no longer expects North Korea to produce a full list of verifiable nuclear weapons facilities, warheads, et cetera, before the next summit between Kim Jong-un and President Trump. Whether or not this represents a tactical shift in the negotiation strategy for the United States I think is an open question, or whether – you know, whether or not the United States is changing its strategy, I think we need to ask that question. And also, what is clear is that negotiations between the United States are currently stalled, at least at the working level.
Now, the North Koreans may be betting on a Trump – next Trump-Kim summit to make actual progress on what the North Koreans want to make progress on, which is a peace treaty or a peace – a declaration for the end of the war between the two – between the Koreas. That may be something that the North Koreans are looking for, but right now we see a stalling of negotiations between the United States and North Korea.
North Korea is, of course, pushing ahead with cooperation with the South Koreans, and this may be an attempt by the North Koreans to create a rift between the South Koreans and the United States, the two allies. And this is definitely something that people in Washington are very concerned about. But there was a new U.S.-South Korean working groups on North Korea that was just announced yesterday. So hopefully this working group will get off and running, and this will help alleviate some of those concerns.
I think the real question at the G-20 will be whether President Trump will use this opportunity to forge greater cooperation and international consensus on North Korea or whether his America first agenda will derail possibilities for this. And, of course, even though negotiations between the U.S. and North Korea are just bilateral negotiations, it’s very important to maintain international pressure and consensus to ensure any hope of success in the negotiations process.
I will turn to Michael.
MICHAEL A. MATERA: Good morning. Michael Matera with the Americas Program here.
This is the first – this 10th anniversary G-20 summit is the first G-20 summit to take place in South America. In 2012 it took place in Mexico, but this is the first in South America. For Argentine President Mauricio Macri, the presidency has been an opportunity to take the international stage and to demonstrate how serious he is in reintegrating Argentina back into the international community after 13 years of the populism under Cristina and Nestor Kirchner. He’s also seen this as an opportunity to attract greater attention and potentially investment for Argentina.
The three Latin America G-20 members are Mexico, Brazil, and Argentina, and they’ve historically struggled to put forward a common platform of G-20 issues. This year political and economic stability in all three of those countries and throughout much of Latin America has complicated Argentina’s efforts to promote a common Latin America agenda for the G-20.
Both Mexico and Brazil, as we know, are in the middle of presidential transitions. In fact, Mexico’s president, Enrique Pena Nieto, can only stay for the first day of the summit; he needs to get back to Mexico City for the inauguration of Andres Manuel Lopez Obrador on the 1st of December, on Saturday. Lopez Obrador raises all kinds of questions about where he plans to take Mexico over the next five years.
Brazil just one month ago, as we know, elected the far-right populist Jair Bolsonaro as their next president. Bolsonaro was invited by President Temer to accompany him to Buenos Aires, but he has demurred.
The Argentine government has coordinated and overseen a really active and a well-organized G-20 process from what we’ve heard, with parallel and intense B-20, Business-20; T-20, Think Tank-20; W-20, Women-20; and L-20, Labor-20; worked by the Argentine private sector and civil society. They pushed this G-20 process through during a year marked by serious questioning of the role and value of international cooperation and multilateralism, but in fact is was this kind of international cooperation and strong U.S. and G-7 commitment to Argentina’s economic stability that helped to ensure that the country made it through what has been a very challenging six months, as Argentina found itself the target of financial markets beginning in April of this year. The 57 billion (dollar) IMF arrangement that was agreed in June and revised in recent months appears to put Argentina on a more steady course to greater financial stability in 2019.
Matt has already talked about the summit theme, building consensus for fair and sustainable development. This underlines Macri’s argument on how global growth has not benefited everyone in an equitable way, thereby undermining people’s trust in globalization. The three key issues – the future of work, infrastructure for development, and a sustainable food future – clearly, Macri has in mind greater R&D and innovation for Argentina, Latin America, and the developing world in general. The focus on infrastructure has been an effort to underline the huge deficits in infrastructure that you have throughout most of Latin America. And the focus on food security serves to highlight the important food export sectors in many Latin American economies, especially Argentina and Brazil.
One of the most important specific objectives of President Macri for the G-20 is to play some personal role in trying to bring Presidents Trump and Xi together and away from their commercial confrontation. Not clear that he’s going to be able to insert himself in that, but he very much would like to play that role. Most of Latin America has either the U.S. or China as their number-one trading partner; and therefore, this is – this is seen as a great threat to global growth. The ceasefire that Matt mentioned hopefully is going to come to pass.
The one important bilateral meeting taking place is the Macri-Trump state visit on the margins of G-20. Not clear exactly yet when that meeting is going to take place, but for Argentina this is a major – a major event. The issue of Venezuela likely to be one high on the agenda, the bilateral agenda.
Just a few words on the security situation. The politics in Argentina are extremely polarized. There’s been some speculation that extremist groups aligned with former President Kirchner or even more extreme than those associated with her might try to disrupt the G-20 proceedings in an effort to embarrass President Macri. Argentina has been preparing for this summit already for two years. They hosted a year ago the WTO ministerial, which was sort of a practice run for this, but it’s a very different thing to have 25 world leaders than to have 150 trade ministers as they did last December.
Argentina’s security minister, Patricia Bullrich, has built very close cooperation with the United States, Russia, China, Israel, and has put together a number of special joint operations that’ll be in place during the summit to ensure that it goes off without a hitch.
The site for the summit is quite isolated and protected. And November 30th, a Friday, has been declared a holiday in Buenos Aires to minimize traffic in the town. So it’s going to be – everything is going to be focused on the summit.
MR. SCHWARTZ: Great. We’re going to open it up to questions. For those of you who are on the phone, we will be sending out a transcript to everybody. I just want to remind you who the speakers are. The first speaker was Matt Goodman. The second speaker was Jon Alterman. The third speaker was Heather Conley. The fourth, Lisa Collins. And fifth, Mike Matera. When my colleagues do respond to questions, they’ll say again who they are so those of you who are not in the room can hear.
For those of you who are in the room, who I’m going to call on questions, please identify who you are for our transcript as well and so we know who you are.
And our first question goes to the dean of all journalists, Mr. George Condon.
Q: I don’t know about that.
At the risk of violating the new White House decorum rules, let me ask two questions. (Laughter.) The first, is there any damage regionally by the fact that the president has canceled his visit to Colombia without any explanation of why?
And secondly, a broader question. For the first year of the Trump presidency, you’ve had foreign leaders try to really flatter him, parades and nice words. In the last couple of trips to Europe and to Canada, they seem to be reassessing that and figuring that that didn’t work, and you had some really bad interactions. Is there is a reevaluation going on? Have world leaders figured out how to deal with this president?
MR. MATERA: On the cancellation, as we talked before, George, I was aware that that had been cancelled.
I don’t know – I’m sorry. Mike Matera, America’s Program. Sorry about that, Andrew.
I knew that that part of the visit had been cancelled, I’m not sure why. A few days ago the new assistant secretary of state for Western Hemisphere affairs, Kimberly Breier, was in Colombia. I don’t know if the cancellation had something to do with that. I really don’t know. I’ll try to find out.
Q: Was the region reacting?
MR. MATERA: Not that I’ve – not that I’ve noticed. No.
MR. GOODMAN: OK, this is Matt Goodman.
Just on the – on the second question, so I think that there is some truth in your question, that is the premise of your question, that I think that over time other countries have, you know, decided that they have work to be done, they have arrangements to be made and they need to move on and do those things. And they understand the U.S. is an important country and, you know, that President Trump is there and they need to engage with him individually.
But I think, from the perspective of the G-20, it’s very hard for the G-20 to move forward without the United States playing an active role in leading. But I think my sense of that realm is that – is that people feel there’s important work to be done and they need to talk about trade and growth and sustainability and inclusion. And they’re going to go ahead and do that and hope to bring the U.S. aboard.
MS. CONLEY: So from the European perspective, I think you have a wide range. You have, of course, French President Emmanuel Macron, you know, a full-circle moment of enormous personal investment into a personal relationship and dynamic that did not pay off in getting President Trump to rethink his policies, whether that’s the Paris – withdrawing from the Paris climate agreement, or the Iran nuclear agreement, the JCPOA, or a on a broad range of issues. So you had within the space of a six-month period a celebration of U.S.-French relations – and personal relations, in April of this year, to last weekend’s, you know, acrimonious approach to both leaders. So you see this broad range.
I think, as Matt said, after two years leaders are putting forward their vision, what they need to get done. They are using a variety of tools, I think investing less in the personal dynamics of the president and finding creative coalitions with other countries to further their interests. And I would just say, as a reflection, as we head towards the G-20 we are also reflecting on the impact of the G-7. These multilateral frameworks I think is where we really see in very stark ways that the America first policy that Lisa was mentioning is very much a self-isolating policy in a multilateral framework. This just presents, I think, enormous challenges as the U.S. government seeks to move further on its objectives – whether that’s North Korea, whether that’s Iran, whether that’s a variety of issues. So I think you’re seeing both the interpersonal one-on-one dynamic, but then there is that multilateral framework.
And I apologize. This is Heather Conley from the Europe program.
Q: Thanks. Devin Dwyer with ABC News.
Maybe a question for Michael and maybe Matthew. But the USMCA, we has seen some reporting that they were expected to sign it on the margins down there. I don’t know if that’s your expectation. But I was hoping you could talk a little bit about the significance of that, particularly vis-à-vis some of the congressional opposition that’s come out. And if you – Michael, I don’t mean to put you on the spot – is there anything in the USMCA, if they sign it, that could be construed as Mexico paying for the wall?
MR. MATERA: It’s not clear if it’s going to be signed. I mean, there’s been speculation that it will be on the margins, but that hasn’t been confirmed. There’s been talk of some objections that Canada still has that might delay the signing. On your last question, no, not that I’m going to be drawing to. (Laughs.) Not that I’m aware of.
MR. GOODMAN: This is Matt Goodman. Yeah, I’ve also heard that they may try to sign it on the 29th, but that there are also still some outstanding issues that might prevent that. So – and I’m not – I don’t have any detail on the wall.
Q: My name is – (inaudible). I’m with the German Press Agency.
I just wanted to ask a little bit about China for a moment. In your view, is the U.S. policy – because it’s not always articulated very clearly – but is the U.S. policy right now on China to contain China? And do you think that that is a good policy that the White House has? And how does that sort of mesh with the America first policy, where you’re seeing Trump a bit isolated. Does he have the alliances that he needs to actually contain China?
MR. GOODMAN: That’s a good question. This is Matt Goodman.
I think that there is certainly a new – a new, more considered effort by the Trump administration to signal a tougher and more comprehensive pushback against China. I don’t think containment is the right word to use because you can’t contain China. I think even the Trump administration understands you can’t contain China. This is not the Soviet Union. This is a country that’s deeply integrated into the global economy and containment doesn’t really make sense. But in terms of the impulse to try to push back against China on a number of fronts – on security issues, on economic issues, on human rights, and others – I mean, I think that was clearly signaled by the vice president’s speech at the Hudson Institute in early October when he laid out a sort of bill of particulars against China and a sort of tough tone. Not a – not a lot of detail about a strategy to respond to that, to pull all these pieces together.
When he was on the trip to Asia, Vice President Pence attempted to, I think, present a view to the region that the U.S. was here as a – as a constructive player investing in infrastructure, doing bilateral trade deals, and so forth. Unfortunately, I think from the region’s perspective – from the Asia-Pacific region’s perspective – they also heard him making strong statements about, you know, the U.S. opposing “empire and aggression.” I think that was one of the quote/unquote phrases he used. He also sort of with some disdain said the U.S. is not – does not offer the region constricting belts and one-way roads, which was clearly a pushback at China’s Belt and Road initiative. And I think the region is uncomfortable with that kind of language because they are expecting the U.S. to play a constructive role across all those fronts, but not to do that in a way that forces a kind of stark choice between – you know, for the region as to whether they should be supporting the U.S. or supporting China.
One final thing, though. But, as you said, there are some mixed messages coming because at the same time the Trump administration is trying to work with allies and partners on – particularly on those – well, on the – on the security issues as well, but certainly on the – on the economic front. There’s this effort, for example, between the U.S., EU, and Japan to pursue new approaches to subsidy or to push back on heavy subsidization, on industrial policies, on forced technology transfer, on intellectual property theft, and then to promote WTO reform, all of which is clearly directed at China. And, you know, the Trump administration’s gotten some traction with that approach with those countries and those partners, but it’s – but it’s being countered to some extent by this tone and suggestion that you either need to be with us or against us; or you need to pick a lane, as one of our – as the U.S. ambassador to the WTO said – you need to pick a lane between the U.S. and China, essentially. And that, I think, makes the region very uncomfortable.
MR. ALTERMAN: Let me just add something. This is Jon Alterman. Let me put on my Brzezinski Chair hat.
It feels to me like the administration doesn’t quite have one strategy toward China. Not only do you see administration leaders saying different things, but it feels like they’re not integrated, especially in the absence of something like the TPP, which was a genuine long-term strategy to deal with China’s rise.
The president’s instinct is a that a close personal relationship with President Xi can take care a lot of – can take care of a lot of the issues. And it feels to me like the hard work of thinking comprehensively and broadly about what China’s rise will look like, and what impact it’ll have, and what the United States and its allies should do has not been completed. So there’s a military strategy, and the National Defense Strategy looks at China as a principal potential adversary. There are a series of different economic strategies, some of which are about engagement with China, some of which are about engagement with China’s neighbors, some of which are about confronting China on trade. But it – there remains an opportunity to articulate a more considered strategy toward China, and we’re not there yet.
EMMA COLBRAN: Sorry. We would like to open the line for questions from our participants who have called in. We’re going to take a couple more questions from the room first, but we would like them to be able to line up at least. So if you would be able to let them know what number to press, that would be great. Thank you. Thanks.
MR. SCHWARTZ: Yeah, this is like the inauguration, when you had a huge, huge crowd on the Mall. We’ve got – we’ve got billions of people on the phone. (Laughter.) No, actually, we have about 40 callers, so we do want to get to them. But before we do that, let’s go right here in the room. And then we’ll go to you – and then we’ll go to you right after that.
Q: Stefan Niemann for ARD German television.
A follow up, maybe, to you, Matthew. APEC was weak: no joint declaration in the end, unprecedented. You said G-20 lost steam visibly. Do you blame the Trump administration for this trend? And from the president’s perspective, would that be a good thing if there was no joint declaration at the G-20, too, and was, as a body, kind of marginalized?
MR. GOODMAN: Well, look, I’m at risk here of being one of the few people who actually believes things like the G-20 and APEC are actually useful. But I would acknowledge, because I was involved in organizing them. But seriously, I would have to acknowledge that these forums are not places where, except in rare circumstances, where really significant things have gotten done, certainly at any given summit. And so this is a long-term trend, this is not the fault of the Trump administration on that level.
However, I think the Trump administration, as I think Heather said, the Trump administration’s view of multilateralism and of these sorts of institutions, which, you know, from the start has been a very skeptical view, I think has made it harder, as I say, to get progress in these forums. The fact is that the United States is engaged and does walk into the room in these forums and push, put forward an agenda and proposals and initiatives and incentives for advancing the agenda, then, you know, useful, constructive things over time can get done. If the U.S. does not do that, these forums, you know, flounder.
And then what you have on top of that, the president actually preferring a different approach to trade in particular, some acknowledgement that trade contributes to growth, but then quickly a pivot to, you know, to unfair trade and the need for reciprocal measures and defensive measures and so forth, I think that does make it much harder to get a consensus. And so I think – I think that’s why the outlook for this summit is, as I mentioned, colored by what is going to happen on the trade front, whether there will be both in the room any kind of agreement on sort of compromise language and then on the margins whether they can – whether the president can reach some sort of deal with Xi Jinping on the trade issues.
By the way, I should just say I said “ceasefire.” Again, I was sticking my neck out and saying 51/49, some kind of ceasefire. I should say I think there’s a big risk that won’t happen as well, so I want to acknowledge that. But I also want to say, even if there is a ceasefire, it’s not going to solve the problem. There’s going to still be deep, structural challenges in our economic and other aspects of our relationship with China.
MR. MATERA: This is Michael Matera with just a quick comment.
It’s pretty clear that G-20, as this process began, there was some doubt as to whether it was really going to continue. And I think it’s important to point out that President Macri really made an incredible effort over this past year to get together ministers. There were – there were 10 meetings of ministers in different places around Argentina over the year. President Macri and the Argentine government has really pressed for consensus and has really helped, I think, to keep the G-20 process alive. And that’s something that I just wanted to – wanted to point out.
MS. COLBRAN: (Gives queuing instructions.)
OPERATOR: And we’ll go to the line of Roberta Rampton with Reuters. Please go ahead.
Q: Thank you. Can you hear me?
MR. SCHWARTZ: Yeah, we can, Roberta.
Q: OK, great. This question is for Jon Alterman please.
You talked about how the crown prince is going to use this opportunity to kind of normalize his role. And I’m wondering how likely you think it is that the United States would shun him at the G-20 really. Like, would you expect, given President Trump’s comments on the crown prince lately, that he would pass up the opportunity to meet with him, to have a bilateral with him?
MR. ALTERMAN: I think that depends in part on the CIA briefing today and what evidence they have. I don’t think we know what evidence the intelligence community has. The president seems to have an instinct to not give much credence to what appears to be some very powerful circumstantial evidence and maybe more than circumstantial evidence. I would expect that we will know more in the next couple of days through the president’s posture whether there is something he finds deeply troubling in the intelligence briefing. His instinct will be to work with Saudi Arabia because, as he has articulated many times before, he thinks world leaders do nasty things and that’s not something that should bar the United States from dealing with them. It could be that there is a stark difference between the U.S. approach to Saudi Arabia and the approach of U.S. allies to Saudi Arabia, but it’s early to say.
The other question in my mind is exactly how long the crown prince will be there. It may be that he is only there for a short period of time, and that would take the pressure off him to line up all the senior meetings and the pressure off global leaders to make a decision about whether to meet with him or not.
OPERATOR: Next we’ll go to the line of Valentina Pop with Wall Street Journal. Please go ahead.
Q: Hi. Hi, can you hear me? Hello?
MS. : Yeah.
MR. : Yeah.
Q: Hi, great. This is Valentina Pop with The Wall Street Journal.
I’m sorry; I came in late on the call, so you might have addressed this in the opening remarks. But I’m interested to hear from you what chances you see for the other ceasefire or truce in the EU-U.S. trade relationship advancing or not at all at this – on the margins of the G-20 summit. Thank you.
MS. CONLEY: Thank you. This is Heather Conley.
That is the question. What we saw – we have seen from Ambassador Lighthizer in putting forward in mid-October, notifying Congress that this will be forthcoming. We’ll know in mid-December what the U.S. objectives will be, at least as the administration sends them to Congress. In some ways I think it’s now very much a focused question on what is in and what – they cannot even agree of what is in and what is not, and that’s really very much centered on agriculture, where the U.S. very much wants to put agriculture in this future agreement and where the European Union has no mandate to do that, and certainly there are very strong voices – French government voices, in particular – that does not want that to happen. And as we saw, the interaction and play between President Trump’s tweets to President Macron about French wine and tariffs, this certainly is going to be a very hot topic to concern.
Again, getting back, what I’m always struck by is the language that was given and the optimism when President Juncker was in the White House – you know, zero tariffs, zero non-tariff barriers, you know, zero tariffs on non-auto goods. I mean, this was about really moving the ball down the field, to use a football analogy, but it was also trying to seek some regulatory harmonization. Over the last several months we have seen – again, this is, I think, very similar to what we’ve seen on other trade agreements. We have seen the administration key voices argue with one another about what is in and what’s not in, how to do that, how not to do that. And I think it’s been very clear the administration has spent enormous amounts of energy on USMCA, probably less energy on the U.S.-EU conversations. But until the administration signals to Congress what its objectives are for the U.S.-EU talks – and as I said, there is no mandate for the EU talks – it’s hard to understand exactly how those two are lined up.
Q: Thank you. I’m Ju Leah (ph) from Voice of America Mandarin.
Recently, Peter Navarro said here at CSIS that if there’s any trade deal between the U.S. and China the deal has to be made on the president’s terms, not on Wall Street’s terms. And then very quickly this has been refuted by Larry Kudlow. So I’m just wondering if you can talk about, you know, will this kind of internal division affect the Trump administration adopting a common position in terms of its negotiations with China.
And just a quick follow up, we also know that China recently submitted a written response to the United States with regard to its concerns about its trade practices. I also read somewhere that the United States is willing to make honorable concessions. I wonder if you can talk about what that means.
MR. GOODMAN: So the – I’m sorry, Matt Goodman again.
The difference of views between various Trump advisors is clear and was, as you pointed out, made clearer in the Navarro speech here at CSIS and then the Kudlow response. That’s been a truth of this administration since the beginning, that there are different views among those different factions, as it were. But it’s also true that the president is the president. And he’s the decider. And I think that he has his own view and approach and interests and incentives in this debate.
And so while those advisors can be important inputs to his thinking on these issues, I think at the end of the day he’s the one that’s going to make the decision. And that’s what leads me to this, you know, as I say, slightly risky prediction that there’s going to be a deal, because I think – a ceasefire, again, not a – not a solution to all the problems. I think – I’m talking about, you know, possibly an agreement to, you know, postpone the elevation and spread of the tariffs to further Chinese imports while a serious process of negotiation on the underlying structural issues of subsidies and industrial policies and forced technology transfer and so forth is established and moves forward.
I don’t think that’s necessarily the preferred outcome for several advisors in Trump’s circle. But I think the president may feel that that’s a deal that he can sell as something that is a positive accomplishment. So, again, I also think there is substantial risk that is not going to happen. I – again, to stress that.
But on the list, yes, the U.S. had provided a list of requests or demands of China, which China then parsed into 142 different items and has come back with offers on some of those things apparently. My sense from – of the response from the administration is that they don’t think it’s very impressive, the list, that they’re not – they’re underwhelmed by what China has brought to the table and offered. And it’s clearly something that’s still being discussed and there’s still, you know, 10 days to go before the actual – before the actual meeting.
And so I think there’s still a possibility to work that list and move it to something that is more a signal to the U.S. that China’s willing to engage in the kind of negotiating process that I mentioned, as opposed to actually solving again. Again, I don’t think – I don’t see any scenario in which the U.S. accepts that list as a solution to the problems and says: OK, we’re done. It’s going to be, at best, an indication – I think what the U.S. is looking for is an indication, a signal from the Chinese government that it takes the U.S. concerns seriously and is ready to have a serious conversation about taking on some of those issues.
MS. COLBRAN: We would like to go to our phone guests again, please.
OPERATOR: And we’ll go to the line of Jakob Hanke with Politico. Please go ahead.
Q: Yes. Hello. Can you hear me? Hi. This is Jakob Hanke from Politico in Brussels.
I would also like to ask about the Xi-Trump meeting. There were reports yesterday I think in the South China Morning Post that China has managed to convince the U.S. negotiators to hold their last round of negotiations in Argentina, instead of doing that in Washington. I was wondering whether you think that this is a sort of strategy to contain or circumvent people like Robert Lighthizer and Navarro, and to negotiate directly with Trump, present him with the results of that last round that will be held in Argentina, and not give advisors a time to convince Trump to not to agree to the deal? Or whether you – because this kind of I think is the first time that a trade agreement like that is negotiated outside of one of the two countries participating.
MR. GOODMAN: Well, I’m not sure about that. It’s Matt Goodman again. I have not heard that particular information, and so I can’t, you know, confirm or deny that that’s what’s going to happen. But that wouldn’t be entirely unusual, in that there is often, you know, last minute negotiation on site. And it’s – you know, again, if there is going to be any kind of even a ceasefire, let alone some bigger deal, it’s going to be negotiated right up to the last – the last minute. I don’t think that the notion that this is – the Chinese are doing this in order to bypass the president’s advisers. That doesn’t make sense to me. But to my point that, at the end of the day, it is the president who’s going to have to – both presidents who are going to have to be the ones who, you know, confirm or sign off on any particular deal. You know, it does make sense that there would be some final negotiations on the ground in Argentina.
MS. COLBRAN: We’d like to take one more question from the callers in.
OPERATOR: Thank you. And we’ll go to the line of Josh Wingrove with Bloomberg. Please go ahead.
Q: Hi there. Thank you for speaking with us.
One of you alluded earlier to the forthcoming summits, the truncated year in Japan and Saudi Arabia after that. There was also discussion of whether – (inaudible) – or communiques are either so watered down that they’re pointless or have not reached at all. I guess my question then is, what do you view as a win for this summit? Can it be a success without a communique, for instance?
MR. GOODMAN: This is Matt Goodman.
You’re talking in the terms of the G-20 itself and what would be a win?
MR. GOODMAN: I mean, I think communiques are important in terms of setting an agenda, showing the world that what these leaders, again representing 85 percent of the global economy, think is important and, where possible, to advancing specific solutions to the problems in the global economy. I would have – and so communiques are important. It wouldn’t be the first time. There was not a G=7 communique when they last met. There was not an APEC communique. So it’s very possible you won’t get a G-20 communique.
I think what typically happens in that case is the chairman then – so in this case Argentina, President Macri – issues a chairman’s summary which captures a lot of the – a lot of the outcomes. I would have pretty low expectations, though, in either case about any great breakthroughs. I don’t think you’re going to see some major agreement to move forward on really any of the fronts mentioned. I’m not sure that, in the absence of a crisis, a burning crisis that the leaders are confronting, that that’s really ever going to happen. But, you know, more or less on some of these issues, you could get some constructive, you know, steps forward. And those would normally be captured in communique or a chairman’s statement. So I think that’s what I’m looking for, but pretty low expectations.
MR. ALTERMAN: This is Jon Alterman.
If I could add, I think it feels to me like the bilaterals are more important at this summit than is normally the case because senior principals have a lot to talk about, not just President Trump, but certainly President Trump meeting the leaders of Russia and China and the crown prince of Saudi Arabia potentially and others. It does feel like the side meetings are much more important than normal because there’s much less consensus than normal. And there are people who will be there who weren’t in Paris a few weeks ago or last week, they weren’t at the U.N. General Assembly, and this is providing an opportunity for some very important discussions that the leaders feel they need to have and may be very important for the next six months to a year going forward.
MS. CONLEY: So this is Heather Conley.
Just to keep pulling on that thread, I think this is exactly what we’re – this is the impact and the damage of a bilateralization of our – of our policy. It weakens the very multilateral frameworks, whether they’re ad hoc in nature or they have more permanence and structure. And this is, again, this is not unique to the Trump administration. I think we’ve been glide-pathing to that point. But now we have the challenge of dealing with very complex issues that require that multilateral framework, but we are now bilateralizing this to a point. And that does serve the interests of certainly some leaders who want to be the leader and make the decisions the rest of the apparatus does not. So I think you are beginning to see some structural shifting here that’s been going on for a while, but it’s becoming now, I think, accelerated and these multilateral frameworks are having a harder and harder time to adjust to that is my sense.
MR. SCHWARTZ: OK. We’re going to go back right here and then – and then right after that, you, please.
Q: Thank you very much. I’m Ching-Yi Chang with Shanghai Media Group.
My question is to Michael. Let’s focus on the host of this year, Argentina. Its economy is not very promising this year, and how bad can it be? And will Peronism go away? And also, what’s an implication of having this G-20 summit being held in Argentina this year?
MR. MATERA: OK. It has been a difficult year for Argentina, but Argentina is emerging from these very difficult months on – well, with greater stability than many people expected it was going to. And the $57 billion IMF arrangement is a major – a major reason for this. I think it’s a very clear indication of the support of the G-7 and particularly the G-1 for Argentina and for what President Macri is trying to do in terms of dealing with the Peronist populist past. He’s trying to turn the page in Argentina.
And there’s – there is, of course, always the chance that there will be steps back, but I think in Argentina the sense at this point is that Macri has consolidated his own position. He’s facing reelection in less than a year, 11 months after the summit. It’s too difficult at this point to predict who is going to win that, but clearly his fight against populism is something that is winning him a lot of – a lot of points in the United States and in the other G-7. He’s really going against the trend. He’s going against the trend of populism that we’re seeing in our own country here, in Italy, in other places.
Q: Emel Akan from the Epoch Times. Thank you very much for this briefing. Very helpful.
I wanted – my question is about oil, oil market. Is there – do you think – will there be any understanding during the G-20 summit whether the oil supply is enough or not, and whether this will impact the OPEC meeting going forward in December?
MR. ALTERMAN: Well, as you know, oil prices have been going down because of a sense the market’s oversupplied. The Saudi view is that they were told that the United States was going to completely choke off Iranian supply, and so the Saudis increased their production. The U.S. at the last minute made deals with eight countries to allow them to continue to import a limited amount of Iranian oil, and oil prices have slid about 15 percent or so.
There remains a deep Saudi concern that oil prices will become too volatile. And that the Saudi desire is partly about price but a lot about volatility out of concern that what happens is that when the price goes down, then people underinvest, and then the price shoots up, and then people start looking at alternative fuels and alternative technologies and all those kinds of things. And they think that they are losers with long-term volatility in the market.
How much that’s going to come up at this meeting I tend to doubt. I think everybody has bigger fish to fry. I don’t know who the crown prince is going to meet with. That certainly is always the calling card. The Saudis want to be the swing producer in global markets for oil. The reality is that U.S. unconventional production is becoming much more important to global oil markets and the Saudis have less influence than they’ve had in the past. But to the extent that the Saudis are able to play an active role at the meeting, I expect that they will principally be talking about oil prices, and secondarily talking about both attracting investment to Saudi Arabia and outward investment from Saudi Arabia into the rest of the world. That’s the sweetener. And the remaining fly in the ointment is differing levels of discomfort, and in some cases extraordinarily deep discomfort, with the presence of the crown prince.
MR. SCHWARTZ: Great. With that, we’re going to wrap up the briefing today. And we will have a transcript out within the next couple hours.
Thank all of you for calling in. Thanks to all of you who have been here in the room. You can find the transcript at CSIS.org. We’ll also be mailing it out to you. And follow us on Twitter @CSIS.org also to look for the transcript. Thanks very much.