At G20 summit, all eyes on Trump-Xi. Sign of a new world order?

When world leaders came together for the first Group of 20 summit of the world’s industrialized economies in 2008, the task at hand was to unite in addressing the global economic crisis hitting large and small countries alike.

The G20 summit, with a tip of the cap to the growing importance of emerging economies, joined the constellation of multilateral forums and institutions set up to allow world leaders to come together to hash out responses to global economic challenges.

But that was so 2008.  

The G20 summit that kicks off in Buenos Aires Friday – to be held along a stretch of the Argentine capital fronting Río de la Plata and to include a glittering evening of Argentine culture in the city’s famed Teatro Colón – seems certain to underscore that while multilateralism may not be dead, it is in retreat.

With nationalist Donald Trump at the helm of the superpower that built and nurtured the post-World War II international system, the kind of multilateralism that gave birth to the G20 has been increasingly supplanted by bilateral relations and big-power encounters.

One result of that trend is that at this weekend’s summit, all eyes will be on the one-on-ones President Trump will hold with China’s Xi Jinping and a handful of other leaders, including a “pull-aside” (not a formal sit-down meeting) with South Korean President Moon Jae-in (topic: North Korea) and a meeting with German Chancellor Angela Merkel (topic: Russia’s latest provocative action toward Ukraine).

Indeed, Trump had been set to sit down with Russian President Vladimir Putin on the summit sidelines, but Trump called off the meeting Thursday, citing US rejection of Russia’s seizure over the weekend of Ukrainian vessels and crew members in the Azov Sea off Crimea. Russia annexed the Crimean Peninsula from Ukraine in 2014, prompting US sanctions on Russia.

Still, for many international economists and geopolitical analysts, it is the Trump-Xi meeting that will dominate everything else. With the future of the US-China trade war on the line, some are billing the Trump-Xi encounter as the most consequential in years between the leaders of the two economic behemoths.

The inability to reach at least a cease-fire if not the outlines of a resolution for the trade war would put a damper on the entire summit, trade analysts say.

Problem with the prince

A last-minute challenge to the summit’s multilateral pretenses came with the surprise decision of embattled Saudi Crown Prince Mohammed bin Salman to attend the gathering – thus confronting growing global outrage over his handling of the war in Yemen and the Saudi government murder of Saudi dissident and journalist Jamal Khashoggi.

Suddenly a big question hovering over the leaders’ gathering is who will accept to stand aside the prince in the traditional family photo? Will Trump double down on his all-in approach to US-Saudi relations by shaking hands with the crown prince?

In any case, Trump appeared to rule out meeting with the prince in Buenos Aires, telling reporters Thursday before departing the White House for the summit that “I would have met with him, but ... we just didn’t have time.”

With such bilateral matters taking center stage, any summit-wide consensus or final statement will be lucky to get also-ran billing. Such a relegation of attention, analysts say, will further demonstrate the current shift away from global accords and cooperation.

“If we get through this weekend with a series of bilaterals with no real agreement on the [summit] communique or a watered down communique, it will show that multilateralism is dormant at the moment but not necessarily dead,” says Thomas Wright, a senior fellow in the Project on International Order and Strategy at the Brookings Institution in Washington.

Adds Brookings colleague David Dollar, a leading expert in China’s economy and economic globalization, “I don’t think we should write the obituary of the multilateral system just yet, but it is reasonable to ask whether or not the system can survive very long without active US participation.”

That question lies behind the keen interest in what transpires at Saturday’s dinner tête-à-tête between Trump and Mr. Xi.

The immediate issue will be the US-China trade war, and whether or not the two leaders can reach some sort of deal – something White House economic adviser Larry Kudlow said Tuesday is a “good possibility.” One possibility is that the US could agree to hold off on a new round of tariffs on Chinese goods in exchange for a Chinese commitment to buy more products “Made in USA.”

Discomfort over ‘us or them’

But the broader question world leaders and experts alike will be asking – one that certainly won’t be answered this weekend, but about which the Trump-Xi dinner may provide some hints – is where the intensifying competition is headed between a rising global power and a superpower seen by many to be in retreat.

“There is certainly a new, more considered effort by the Trump administration to signal a tougher and more comprehensive pushback against China,” says Matthew Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies in Washington.

But he says much of the world, and specifically the Asian-Pacific region most effected, is “uncomfortable” with the stark “us or them” choice the Trump administration is increasingly presenting on economic cooperation, investment, and security issues.

Across Asia in particular, “they are expecting the US to play a constructive role across all those fronts,” Mr. Goodman says, “but not to do that in a way that forces a kind of stark choice between ... supporting the US and supporting China.”

Goodman notes that both the resistance to the Trump administration’s “pick a partner” approach to relations with China and the accelerated weakening of multilateral institutions could be seen in the APEC (Asian-Pacific Economic Cooperation) summit attended not by Trump but by Vice President Mike Pence in Papua New Guinea earlier this month.

Argentina paying the price

Mr. Pence laid out a confrontational approach to China and warned countries of the dangers of choosing a “one-way” (meaning self-interested) China, and in the end a dispute over trade language left the summit to conclude with “no APEC communique for the first time in 25 years,” Goodman says.

The flagging of multilateralism and the weekend’s focus on big-power bilateral relations is not good news for summit host Argentina.

President Mauricio Macri, confronting an economic crisis at home, is relying on international financial support and investment to help turn Argentina’s economy around. And he envisioned hosting the G20 summit – which gathers countries representing 85 percent of global economic output – as a way to showcase a traditionally protectionist Argentina’s opening-up to a globalizing world.

But Mr. Macri’s summit, organized around such global themes as “the future of work” and the impact of technology in the workplace, public-private infrastructure investment strategies, and securing a sustainable food future, seems out of step with geopolitical trends.

“Macri wanted this summit to be about multilateralism, because he needs the world’s financial cooperation and Argentina trading with the world if his plan to turn the economy around is going to work,” says Juan Luis Bour, chief economist at FIEL, the Foundation for Latin American Economic Studies, in Buenos Aires. 

But Macri seems to have hopped aboard the multilateralism train just as some high-powered passengers were getting off, Mr. Bour adds, so “this summit will not be about multilateralism, and Macri will have to adjust his objectives and wait for another meeting with better conditions.”

Filling the void

Indeed, Bour joins others, like Mr. Wright, the senior Brookings fellow, in concluding that while multilateralism may be down, it is not out.

The US under Trump may be backing away from its leadership of the multilateral system, Mr. Dollar says, but others are coming forward to fill the void.

“As the US has withdrawn from some of these multilateral efforts, other countries have stepped up,” Dollar says. He notes Japan’s “leading role” in keeping the Trans-Pacific Partnership alive after Trump pulled the US out of it in 2017, and how China is pushing forward with its trade agreement among APEC countries and sticking to the Paris climate accords.

The European Union is pursuing a trade accord with South America’s Mercosur countries, which include Argentina. French President Emmanuel Macron was expected to have negotiations of that pact at the top of his agenda when he met with Macri Thursday.

Even the US – perhaps anxious not to appear totally divorced from its traditional role as leader of multilateral institutions and efforts – was expected to use the Buenos Aires summit to join Canada and Mexico in a signing of the updated NAFTA, renamed the United States-Mexico-Canada Agreement.

But it remained unclear if the signing would be done by the three countries’ leaders, or if they would delegate the task to senior officials. After all, Trump has made it amply clear that while he prizes his bilateral relations with Xi, and Mr. Putin, and even with North Korea’s Kim Jong-un, he does not include Canadian Prime Minister Justin Trudeau among his favorites.