G-20 Summit in Argentina: Results and Prospects

In the Argentine capital, Buenos Aires, the beginning of December was marked by one of the main events on a global scale in the past year. From November 30 to December 1, the thirteenth forum of the world’s largest economies, the G-20, was held. The state leaders discussed a wide range of issues: climate change, energy, infrastructure and food security. This year, this summit was expected to be either a big shock or a complete “calm”, apart from a number of scheduled bilateral meetings. As a result, according to a number of international political observers, the only important achievement of the G-20 was the conclusion of a new treaty to replace NAFTA between the United States, Mexico and Canada. How is this economic forum still workable and what awaits it in the near future? What specific measures were proposed in its final declaration? What prospects for further development were outlined for the next year?

As a number of reputable international media emphasizes, the overall impression after the recently concluded G-20 Summit in Argentina is quite twofold. The main item on its agenda – the fight against threats of economic crises – on the one hand, was resolved and agreed, and on the other, as if it had faded into the background. According to many political analysts, this time the summit’s final declaration has become a very unbalanced document. The usual first item of the final declaration, which touches upon the main agenda of the summit, for which the forum was created in 2008, is only the 23rd in order. It is worth noting that the key issues of the G-20 were reflected only in 8 points: from the 23rd to the 30th. These provisions deal with the preservation of the stability of international finance, the rejection of competitive currency devaluations and the use of tax havens, as well as taxation of capital movements (Tobin tax) and others.

In recent years, representatives of the G-20 governments have noted that there are now fewer of such challenges and dangers. Over the 10 years of the summit’s existence, their threat to the world economy has been reduced or in some cases completely eliminated. For this reason, this year more ideological and rhetorical questions were posed to the beginning of the final declaration, more suitable for plenary sessions of international economic forums, where influential scientists and politicians are thinking about the future, the consequences of the fourth industrial revolution or, for example, the threat of taxation in individual countries. Such introductory provisions are hardly relevant to the real agenda of international relations.

Over the past three years, a general tendency for world politics and economics has become a state of uncertainty. Many political consultants associate these sentiments with the arrival of the Donald Trump Administration in the White House and with such consequences from the new government of Washington as the threat of protectionism, the widespread use of economic sanctions, the increasing volatility of the global financial system and commodity markets. In this regard, the holistic and real content of the final G-20 declarations in these last three years remains quite abstract, as the leaders of the leading powers are returning to discuss a number of issues, as it seemed earlier, successfully resolved in 2008-2010. However, as a number of well-known economists point out, the level of transparency and sustainability of the global financial system is now higher than ever before after the 2008 international financial crisis. Thus, the last three G-20 summits were rather a repetition of the lessons that were passed, but still poorly learned.

This year, for the first time, the long-awaited summit of the three countries – Russia, India and China (RIC) – was held in the Argentine capital for the first time, which was one of the most significant events of the forum. The new tripartite format laid the foundations for the new bipolar system of the world economy: the first block consists of the United States and its numerous satellite partners, on the other hand – the RIC together with its partners in the BRICS and the SCO.

One of the important results of the G-20 summit was the conclusion of the USMCA (United States-Mexico-Canada Agreement) between the United States, Canada and Mexico, which replaced the former NAFTA (North American Free Trade Agreement). However, experts believe that the differences between them are not too weighty. The United States succeeded in raising duties on car imports, protecting individual segments of its national market from foreign competition, and achieved greater access for its companies to the markets of Mexico and Canada. In cases where goods and services from the United States faced high customs barriers, they were lowered by their partners (Canada and Mexico); and if we were talking about quantitative restrictions on the supply of goods from the United States to these countries, the import quotas, on the contrary, were increased.

However, the key difference lies in a completely different one. The NAFTA agreement was initiated in 1993, adopted in 1994. The conclusion of this Agreement took place in the period of the beginning of globalization and the world fascination with integration processes. At that time, the US president, the Democrat Bill Clinton, had a sincere intention to create a free trade zone throughout the North American continent. However, without a real integration process, that is, voluntary, fair and equitable integration, the creation of a free trade zone seemed impossible. In fact, the United States neither under Clinton, nor later under the Republican administration of George W. Bush, were going to form equal-right integration associations with other states. As a result, the real effect of the NAFTA trade agreement turned out to be completely different for Washington as planned. As a result of the NAFTA, hundreds of companies left the US economy and thousands of enterprises in industries such as automotive, electronics and home appliances, and the textile industry were transferred. Historically, these industries have created millions of decently paid jobs, which gradually significantly increased the percentage of unemployment.

The modern version of the Trade Agreement has a new name, although the main content has not changed so much. The new treaty (USMCA) has moved the discussion of free trade in North America to another plane: between individual sectors of the economy and mainly through bilateral negotiations, during which the United States will find it easier to seek concessions from partners.

This time, within the framework of the G-20 summit, various global themes of the world political and economic system were discussed. However, as a result, they all seemed to go back to the micro level. Thus, today there is no more rhetoric about integration, but there is a series of bilateral or trilateral negotiations and agreements, according to which tariffs and quantitative restrictions on trade are not completely eliminated, but become more attractive for large business of a single country.

Despite such a low level of effectiveness of the summit, this meeting again became a platform for many bilateral agreements (for example, Russia concluded a trade agreement with Argentina, and Vladimir Putin reached an important agreement with Recep Tayyip Erdoğan on Idlib). Despite a lot of skepticism regarding the future of the G-20, it is very doubtful that in the near future someone will want to abandon the use of the site, convenient for everyone. Even for Donald Trump, whose ideology seems to be completely at odds with the original purpose of this association.