G20-Germany-Hamburg-2017

Building resilience
Since 2008 G20 leaders have sought a
moratorium on protectionist measures
The G20 and Germany and the EU
need to set a positive trade agenda
Steve Mnuchin arrives
at Trump Tower in
Manhattan, New York, December 2016
Claudia
Schmucker
This was considered a breakthrough
for a successful G20 Hamburg declaration.
However, two weeks later, at the
Organisation for Economic Co-operation
and Development’s ministerial meeting
in Paris in June, US Trade Representative
Robert Lighthizer could not agree to common
language so the chair issued a statement
that included areas of “near consensus”.
These referred to particular trade aspects
such as strengthening the importance of the
World Trade Organization in the multilateral
trading system and resisting all forms of
protectionism. The United States then issued
a separate statement on trade enforcement
with no reference to protectionism.
What does this mean for Hamburg?
The outcome on trade remains unpredictable.
The best hope is a reiteration of the Taormina
declaration. The commitment to free trade
and an open rules-based trading system
has always been at the core of the G20. As a
group with no input legitimacy (in terms of
universal participation), it must achieve such
legitimacy through its effectiveness (output
legitimacy). Eliminating this text from the
final declaration would weaken the impact of
this informal group.
The German presidency must therefore
maintain a constructive dialogue with
the US administration and its more
moderate voices, and count on old and
new allies including Japan, China, Mexico
and Argentina to send a strong signal at
Hamburg in favour of free trade and the
multilateral trading system. In the current
climate of uncertainty and low growth,
a clear and concerted signal by all G20
leaders is badly needed. Otherwise, the G20
will have failed.
The G20 and Germany and the EU
also need to set a positive trade agenda to
show that progress is possible. This relates
to multilateral and plurilateral trade
negotiations, and also encompasses support
for an effective European trade policy that
must include the full ratification of CETA as
well as the conclusion of agreements with
Japan, MERCOSUR and Mexico, possibly
this year. The outcome of the Transatlantic
Trade and Investment Partnership remains
unclear, given developments in the United
States and Europe. Deep and ambitious free
trade agreements that shape globalisation
without lowering standards constitute
an effective tool against growing
protectionist tendencies. G20
DPA PICTURE ALLIANCE / ALAMY
Head of the
Globalization and World
Economy Program
German Council on
Foreign Relations
Claudia Schmucker has been Head
of the Globalization and World
Economy Program at the German
Council on Foreign Relations
since 2002. Before joining the
research institute, she was a
project manager at the Centre for
International Cooperation in Bonn.
She has written widely on the
global financial crisis and the role
of the G20 and the International
Monetary Fund as well as on the
World Trade Organization and the
world trading system.
@dgapev
www.dgap.org
G7G20.com July 2017 • G20 Germany: The Hamburg Summit 59