G20 drafts unanimous communique

Show of unity despite deep divisions with US on trade and climate change

by: Stefan Wagstyl and Demetri Sevastopulo in Hamburg

The G20 nations are set to conclude their Hamburg summit with a unanimous declaration in a face-saving show of unity achieved despite the deep divisions on trade and climate change created by Donald Trump’s America First approach.

“The outcome is good . . . We have a G20 communique not a G19 communique,” said an EU official on Saturday. The agreement follows days of continuous effort trying to reconcile disputes between the US and other nations while also taking account of the German Chancellor’s pledge to make clear important differences.

The result will allow Angela Merkel, who is standing for re-election in parliamentary polls in September, to claim a success even though the meeting has been overshadowed by violent anti-G20 demonstrations in Hamburg.

Berlin is also highlighting the opportunities given for bilateral meetings among world leaders, including the first face-to-face encounter between Mr Trump and Russian president Vladimir Putin, which the two men described as “constructive”.

Mr Trump congratulated Ms Merkel on her stewardship of the summit, saying: “You have been amazing and you have done a fantastic job.”

As well as agreements over trade, climate change and migration, the communique includes commitments to address global overcapacity in steel, which could help defuse growing tension in the sector: the US has been considering sanctions against rival producers and the EU is preparing to retaliate, raising risks of a trade war.

The communique comes after weeks of fears that Ms Merkel, this year’s G20 president, might fail to achieve an agreement in the face of the disputes generated by Mr Trump by his criticisms of free trade and international co-operation and, especially, his decision to pull out of the Paris climate change accord, which the other 19 G20 states support.

But following days of late-night discussions among officials, the G20 has agreed on almost everything. On climate, 19 subscribers to Paris are set to restate their commitment to fully implementing the agreement and push to expand renewable energy at the expense of fossil fuels. But they are also “taking note” of the US decision to pull out.

EU officials said that of Saturday morning in Hamburg, one point of contention remained — a US demand for a reference to American efforts to develop “fossil fuels more cleanly and efficiently”, collaborating with partners. This is widely seen as a reference to boosting US gas exports.

On trade, EU officials said the communique would follow closely the G7 statement at its recent gathering in Taormina, with commitments to free and fair trade and investment balanced by recognition of countries’ rights to take “legitimate” action in trade disputes. The communique speaks of “reciprocal and mutually advantageous trade and investment”, EU officials said.

“This is Taormina plus,” said one, suggesting the pledge to keeping open markets were stronger than at the G7, despite Mr Trump’s continuing calls for cuts in the US trade deficit, which he repeated in meetings in Hamburg.

The draft text reads: “We will keep markets open noting the importance of reciprocal and mutually advantageous trade and investment frameworks and the principle of non-discrimination, and continue to fight protectionism including all unfair trade practices and recognise the role of legitimate trade defence instruments in this regard.”

On steel, EU officials said the G20 was committed to accelerating the development of the Global Forum on Steel Excess Capacity established at last year’s G20 summit in China. The members agreed to produce action plans by November and report back to next year’s G20 summit.

The joint plan does not prevent the US from continuing to consider unilateral sanctions. But European diplomats said that the joint commitment signalled an improvement in the political atmosphere surrounding the sector.

A Japanese official said: This decision sends a good message form the G20 about dealing with problems together.”

On migration, the EU officials expressed disappointment that there was no agreement on a Brussels-led push for United Nations sanctions on people smugglers, including bank account freezes and travel bans. The move was opposed by Russia and China which said such actions were beyond the G20’s remit.

Meanwhile, the G20, together with the World Bank, on Saturday announced a $325m fund for supporting female entrepreneurship in developing countries. Mr Trump said the initiative would help the world economy to grow and “millions of people will be lifted out of poverty”. Ivanka Trump, his daughter, has backed the plan.

At one point on Saturday, Ms Trump briefly replaced her father at the main table while the US president was holding a bilateral with another leader. While Ivanka Trump also serves as a top White House official, the image of her sitting between Chinese president Xi Jinping and British prime minister Theresa May underscored the powerful role that Ms Trump and some other inexperienced officials play in the Trump administration.

The White House dismissed suggestions that her appearance was irregular. One official told the Financial Times that she briefly sat at the table when Jim Yong Kim, the World Bank president, was speaking about African development, partly because the US committed $50m to the World Bank facility to help women.The White House official downplayed the significance of the situation, saying that some other G20 leaders were replaced by members of their delegations when they stepped out of the main event. But Daniel Price, a former top White House official in the Bush administration who served as US sherpa for international summits, said it was very unusual for a relative of the president to sit in his place.

“I’m unaware of a relative ever having replaced a leader. In the past, and on rare occasions, a minister will sit in for a leader for part of a session,” said Mr Price, who is now managing director at Rockcreek Global Advisers.

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