Argentina’s G20 Summit: What Can Impact Latin America’s Economy
*Article originally published in Portuguese. To read the original version click here.
US-China Trade War Pause, climate changes, international trade, economic growth, and gender equality were some of the topics addressed in the meeting that reunited the world’s greatest powers in Buenos Aires.
On November 30 and December 1, the G20 meetings took place in Buenos Aires, Argentina, reuniting finance ministers, heads of central banks and leaders of the 19 largest economies in the world plus the European Union.
Formed in 1999, the G20 studies, analyze and foments the discussion between rich and emergent countries about political matters related to the promotion of international financial stability. This was the first time that the Summit was held in Latin America.
The main names of the international political and economic scene took part in the event, such as Donald Trump, Xi Jinping, Vladimir Putin, Emmanuel Macron, Angela Merkel and Michel Temer.
Here are the main points related to Latin America, or that have a direct impact on the region, that were discussed by the leaders at the event, with selected excerpts from the final text of the G20 summit.
USA x China trade war pause
One of the most addressed matters, the USA and China trade war brought up the discussion on the rising tariffs on steel, Chinese retaliation, and criticism of multilateralism. In general, the debates deepened the polarization between protectionism and globalization.
US President Donald Trump said he had an “incredible relationship” with Chinese President Xi Jinping, who stated that only with cooperation the two countries could contribute for world peace. Argentina, which is experiencing an economic crisis, has been in a crossfire between the two countries since it seeks investments from both.
In an apparent truce, Donald Trump pledged not to raise the import duty from 10% to 25% over $200 billion of Chinese products in January, while Chinese President Xi Jinping said he would increase the purchase of goods from the USA.
Far from being protagonist
In his last participation at the G20 summit, President Michel Temer has kept away the status of an international protagonist – unlike in recent years. According to the event’s agenda, Temer held bilateral meetings with only two representatives: Australia’s Prime Minister Scott Morrison and Singapore’s Lee Hsien Loong.
Brazil to keep supporting Paris Climate Accord
Despite president-elect Jair Bolsonaro’s criticisms to the climate agreement, current Brazil’s leader Michel Temer said that he believes in the country’s permanence in the treaty, as there is no concrete data that makes him think otherwise.
Prior to the G20, Temer also expressed support for the Paris accord at an informal BRIC meeting, the bloc of emerging countries formed by Brazil, China, Russia, India, and South Africa.
Macri attempts to attract investors
Argentinian President Mauricio Macri enjoyed relatively high popularity back when Buenos Aires was set to host the G20. Today, at an inverted situation, Macri now has to dodge several bilateral deals, doing everything possible to attract investors, close deals with the group’s leaders and heal the economic crisis that plagues the country.
In time: the crisis forced Macri to lend $ 56 billion from the International Monetary Fund (IMF) and Argentina’s inflation is expected to close the year between 45% and 50%.
Reform of theWorld Trade Organization (WTO)
Concerning global relations, countries recognize that “international trade and investment are important engines of growth, productivity, innovation, job creation, and development” but the G20 says the current multilateral system is “falling short of its objectives”.
The group says it supports the reform of the World Trade Organization (WTO) “to improve its functioning”. Discussions on which changes should take place, however, were left for the next summit meeting, although the group reaffirmed its promise to “use all policy tools to achieve strong, sustainable, balanced and inclusive growth”.
Argentina wants to open up to foreign trade
Macri told reporters that both Argentina and Brazil wanted to open up to international trade and seek more agreements through Mercosur. After the closing of the G20, he said he realized that Argentina and Brazil were wrong and that the countries that have opened up their economies in the last 20 years are the ones that have grown the most.
Macri also said he hopes Mercosur’s ongoing negotiations, which include possible bilateral agreements with the European Union, Canada, Singapore, and Japan, will advance.
Despite the statements of the Argentine president, the positioning of Brazil after 2019 is still fraught with uncertainties. President-elect Jair Bolsonaro has already stated that Mercosur will not be forgotten, but that it will not be in the forefront of priorities. As for how this scenario will be drawn in practice, only the beginning of the new government will tell us.
Refugees and gender equality
Issues such as migration and gender equality were briefly addressed, yet the group said that “large movements of refugees are a global concern with humanitarian, political, social and economic consequences” reinforcing the need for “shared actions to address the root causes of displacement and to respond to growing humanitarian needs”.
As for gender equality, the text defined it as “crucial for economic growth and fair and sustainable development.” While no practical ways were discussed, the G20 reaffirmed its commitment to “reduce the gender gap in the workforce to participation rates of up to 25 percent by 2025.”
Final announcements’ overview
It seems to be a new wave of peace among the great powers, at least at this moment. G20 leaders recognized the current problems of world trade. However, they have refrained from condemning protectionism and the long-awaited outcome of the first chapter of the US-China trade dispute has taken place.
With calmer spirits, the promise of a truce is positive for the Latin American economies that receive large investments from China and maintain a close relationship with the United States at the same time.
There has been recognition that multilateral trade has failed in its objectives and that it is needed to reform the World Trade Organization (WTO). The final text states that world growth remains strong, although it is becoming more unequal across countries.
The leaders acknowledged that there are trade issues affecting the world economy, but they have not spoken of increasing tension. They also reaffirmed their intention to use all possible instruments to achieve strong, sustainable and balanced growth, working to contain risks of worsening activity.
The text also highlights the need for countries to invest in infrastructure, and the attraction of private sector resources is fundamental. Everyone recognizes that there is room for improvement.
Argentina’s President Mauricio Macri closed the G20 during a ceremony that broadcasted the group’s rotating presidency to Japan, which will host the meetings in 2019. The meetings will be hosted in Osaka. The main one is the summit, which is scheduled for 28 and 29 June.