Labib Murshed writes for DOT : The 2018 G20 Summit of the 20 largest economic powers of the world (19 counties and the European Union) put its denouement on Saturday, December 1, 2018 in Argentina. Due to the onging tensed international incidents all the eyes were in this summit – from the US-China trade war and reforming of the global trade system to the recent Ukraine-Russia naval clash, protests in France over the heightening of petrol price and visit of the Saudi Prince Mohammed Bin Salman in the summit amidst protests in Argentina for his alleged murder of journalist Jamal Khashoggi. However, this summit of world’s 20 largest economies which consist two-thirds of the world population committed themselves to yield an agreement that will reform the global trade system which is now almost at the verge of collapse due to the ongoing trade war between the United States and China. In one hand, the US administration had imposed tariffs on $250 billion Chinese goods which also included steel and aluminum imports and thus hurting several G20 partners of the US, but the US’s notion of “protectionism” bars them to criticize it. On the other hand, China rejects the inclusion of “fair trade practices” that includes dumping, industrial subsidies, abuse of intellectual property rights, technology transfers etc. which the United States, Europe and Japan highly criticize. As a result, on the attempt to reform the global trade system, the other states had to bow down to the US and Chinese demands separately because these states are highly dependent on both of them in terms of economic relations. How cautious are the countries in this trade war between the US and China is well reflected in the reaction of the host country, Argentina. China is one of the top trading partners of Argentina, the main importer of Argentina’s agricultural raw materials which is the backbone of its economy. But when White House Press Secretary Sarah Huckabee Sanders said that Argentina is with the United States in the trade war against China, denoting US President Donald Trump and Argentine President Mauricio Macri’s annunciation of shared commitment to face challenges including the aggressive Chinese economic ventures in a meeting at the sidelines of the summit, a senior Argentine official tamped down the remark saying that the “adjective used by Sanders is too strong and doesn’t reflect” Argentina’s relationship with Beijing.”
According to the US, the root problem began when WTO failed to hold China accountable for not opening up its economy which was envisioned when China joined it in 2001. This made the US increasingly unhappy with China. As a result the current Trump government started the trade war which in turn started to affect the other G20 countries due to, as already mentioned early, all these states are highly dependent on both China and the US in trade and economic relations. And this caused the already dysfunctional multilateral global trade system to fell into a greater predicament. However, even they had to bow down to the US and Chinese demands, lot of other countries took the attempt to get the United States and also China to commit to a certain position with the spirit of the multilateral system as part of the reform. The European Union officials also reverberated the necessity of China and other major emerging economic powers to commit to the same language, thus expressing the necessity of others in the dialogue. One European official said, “After APEC, we knew it would be important for the Chinese to feel there was no ganging up on them”, which exhibits their positive gestures toward China. With these, another pragmatic breakthrough in this summit was the signing of an updated free trade agreement among USA, Canada and Mexico which is aimed to replace NAFTA.
And in the end, what we can see is all these efforts in this Summit didn’t end in futility. In the final communiqué of the group, they confirmed their commitment toward the necessary reforms of the WTO to improve its functioning that will further strengthen the global financial safety net. And this effort is bolstered by the cessation of trade war between the US and China for 90 days ending on January 1, 2019, by agreeing to halt the boosting of tariffs on each other, and rather engaging in new trade negotiations with the aim of reaching an agreement within the given time. And the optimism was found in the words of one delegate who was closely involved in drafting the communiqué, “For the first time China and the United States agreed to engage on the WTO.” However, this summit couldn’t tackle one of the thorniest issues i.e. climate change and other economic issues like sanctions on Iran and Russia, and also no details were given for the proposed reforms, but the demonstration of good faith toward each other still conveys the message of hope for the upcoming uncertain situations.
The writer is a research assistant (BILIA).
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