The G20 Communiqué can be summarized and evaluated as follows:
Trade and investment: The paragraphs on trade and investment remain brief and general. It is encouraging that Heads of State and Government agreed on the need to open markets for trade and investment, have reliable framework conditions and a level playing field, and, in particular, on the necessity to reform of the World Trade Organization (WTO) and conclude WTO-compliant free trade agreements. However, these points do not provide any new impetus, concrete measures, or goals that would practically help to solve trade conflicts or to facilitate negotiations. Unfortunately, the former standstill and roll back agreement on trade and investment restrictions is not renewed either.
Steel excess capacities: B20 Germany welcomes the timeline set by the Heads of State and Government regarding the Global Forum on Steel Excess Capacity. The G20 agreed to reach consensus until autumn 2019 on the question how to the further procedure of proceed with the Forum. However, political leaders must now ensure sufficient political will to find a compromise in this field.
Digitalization: The G20 agreed to strengthen free data flows. At the same time, the G20 address the associated challenges, such as data protection, intellectual property protection, and security issues. B20 Germany welcomes this fundamental agreement on the principle of free flow of data but regrets that the G20 did not decide on concrete steps how to reach these goals. Equally welcomed is the G20’s approach to promote human-centered artificial intelligence (AI). The G20’s AI principles must now be interconnected with other initiatives, such as the ethic guidelines developed by EU’s High-Level Expert Group on AI. While the Summit results regarding data and AI are steps in the right direction, B20 Germany misses an agreement on cyber-resilience in which the G20 promote the encryption of sensitive data.
Climate and energy: The G20 only agreed on general aspects regarding climate policy. They broadly commit to the Paris Agreement, except for the United States who reaffirms its rejection and the 19+1 formulation. The need for emission reductions is mentioned too briefly, while the adaption to climate change is clearly highlighted. B20 Germany believes that emissions worldwide must be significantly reduced. In terms of climate policy, the Communiqué is therefore a step backwards. Regarding energy issues, the G20 agreed on more specific paragraphs. B20 Germany welcomes the open technology-driven discussion on the storage and use of carbon dioxide and the emphasis on the opportunities of synthetic energy sources. Both can lead to significant emission savings worldwide and create new markets.
Environment and resources: The G20 explicitly call for more environmental and resource protection in this year’s Communiqué, underlining the need for more resource efficiency and improved framework conditions for a circular economy. The G20 are committed to inclusive and sustainable growth, and explicitly refer to the United Nations Sustainable Development Goals (SDGs). The “Roadmap of the G20 Resource Efficiency Dialogue“, announced by the Japanese Presidency, is also expressly supported. B20 Germany welcomes this approach, particularly that the G20 agreed to proceed against the increasing level of plastic waste in the oceans.
Infrastructure financing: B20 Germany appreciates that the G20 again focused on growth. It requires a common and comprehensive understanding of economic openness in order to trigger additional investment impulses that are imperative for future growth. The G20 Communiqué, however, can only be the first step. Without concrete action it will remain ineffective. Above all, confidence-building measures in multilateral rules are needed.
Public procurement: The G20 Communiqué unfortunately fails to address the topic of public procurement. Public procurement is one of the largest public expenditures and has great importance for the industry, infrastructure and innovation. The G20 should give more attention to this topic. As the G7 recently rightly stated, it is necessary to expand the membership of the Government Procurement Agreement of the WTO. The agreement contains minimum guarantees for transparency in the procurement of public contracts. It also outlines effective legal protection against procurement errors and corruption.
Sustainable development and Africa: B20 Germany appreciates that the G20 recognize the need to involve the private sector in order to achieve the SDGs. However, the role of businesses is not adequately substantiated. Additionally, a clear push to promote regional economic integration in Africa is missing in the Communiqué. This is a prerequisite for more external investments, which is also the aim of the G20 Compact with Africa (CwA). B20 Germany supports the commitment of the G20 to further implement the CwA. However, there is no explicit indication of whether and how further G20 states will actively contribute to the CwA process in an effective way. Development cooperation and foreign trade promotion should also be more closely linked, aiming to promote exports to regions with a development policy focus. In this context, the G20’s proposal to expand blended finance is going in the right direction.
OECD consensus on export credit guarantees: The promotion and safeguarding of exports remain essential for the financing of growth. The OECD consensus on export credit guarantees from 1978 regulates public insurance. However, the consensus has to be urgently reformed, as international competitiveness is increasingly restricted, especially for strategic projects. The G20 Communiqué does not address the need for reform, nor the competition in financial terms outside the consensus regulations. Therefore, an important momentum was missed to support current efforts by the European Commission and to send a strong signal to non-OECD countries.
Digital tax: B20 Germany supports the efforts of the G20 Leaders to develop a global consensual on the issue of a digital tax. Only this way, double taxation and administrative burdens for companies can be avoided through the envisaged redistribution of taxation rights and the introduction of minimum worldwide taxation. Additionally, the G20 Leaders called for more transparency, mutual tax assistance and the increased exchange of information between states. B20 Germany supports this demand but points out that the security of sensitive corporate data should always be prioritized in international cooperation between tax authorities.
Health: The G20 confirmed their commitment for deepened cooperation between health and financial authorities. This is essential for the sustainable financing of efficient health systems and needs to be strengthened, e.g. with support of insurances. The G20 reaffirm the important role of multilateral actors, like the World Health Organization and the Global Action Plan to achieve Health and Wellbeing (SDG3). They commit to provide fast support to the African countries currently suffering from the Ebola outbreak. They also commit to strengthen national, regional and stronger multi-sectoral collaboration. They further commit to strengthen the One Health approach to manage antimicrobial resistance as well as the achievement of a Universal Health Coverage. Funding of public and private innovations should contribute to it. B20 Germany welcomes these approaches. However, a stronger emphasis on the need to consider all SDGs interconnectedly and thus to regard health in all policies in terms of a “health in all policies” approach would have been desirable. B20 Germany would also appreciate a better involvement of the private sector in the development and establishment of innovations, especially in the field of digital health solutions.
B20 Germany strongly welcomes that the G20 Leaders achieved to agree on a joint declaration, even if the Communiqué reflects rather a minimal consensus. From the point of view of B20 Germany, the most important topics for the international business community have been covered. However, the Communiqué should have specified clearer approaches and measures to solve global challenges. Only forward-directed multilateral approaches can pave the way for sustainable, future-oriented and inclusive economic growth, which benefits all. It is the G20’s responsibility to ensure the appropriate framework conditions for this growth – they have to take this responsibility seriously again!
Next year, Saudi Arabia will assume the G20 and thus the B20 Presidency. B20 Germany will also be involved in the B20 process under the Saudi Presidency.
To G20 Japan Communiqué: https://www.g20.org/pdf/documents/FINAL_G20_Osaka_Leaders_Declaration.pdf
To B20 Japan Communiqué: http://www.b20tokyo.org/documents/pdf/Joint_Recommendations_eng.pdf
Disclaimer: B20 Germany is a joint project by the Federation of German Industries (BDI), the Confederation of German Employers’ Associations (BDA) and the Association of German Chambers of Commerce and Industry (DIHK). Therefore, the individual members of B20 Germany do not espouse all of the above statements if they are not within the realm of their statutory or legal responsibility.