Free trade on G20 agenda

Sydney – Wedged in between the Brexit vote and the US presidential election, leaders of the world’s major economies meet this weekend in China needing to mount a realistic defence of the free trade and globalisation they have long championed.

At stake is the post-World War ll concord on globalisation that proponents say has helped lift so much of the world out of poverty.

China, the host of the Group of 20 meeting, has itself been one of the biggest winners from free trade, becoming the world’s leading exporter.

But Britain’s shock vote in June to leave the EU and the rise of protectionist Donald Trump in the United States has shaken that accord ahead of the G20 summit in Hangzhou that starts tomorrow.

“This meeting – the first since Brexit and the US presidential primaries – should send a clear message that world leaders have heard people’s concerns about globalisation and are taking steps to better understand and address them,” said associate professor Mark Melatos at the University of Sydney.

“The risk is that nothing much will be achieved,” he warned. “More platitudes about the benefits of global trade and investment will ring hollow.”

While there have been recent concessions that not everyone wins out of globalisation – US Treasury Secretary Jack Lew this week spoke of anxious and angry people who felt left behind – the White House has also signalled a renewed push on the controversial Trans-Pacific Partnership trade deal as President Barack Obama’s term winds down.

The G20 earned its spurs with a concerted reaction to the 2008 global financial crisis, but recently opposition to free trade seems to have gained purchase and a coherent defence has been sadly lacking.

Among the biggest sticking points is overcapacity in the global steel industry, a sore point for China as the world’s largest producer of the metal.

Other concerns include barriers to foreign investment and the risk of currency devaluations to protect export markets.

International Monetary Fund managing director Christine Lagarde said this week that G20 leaders needed to do far more to spur demand, bolster the case for trade and globalisation and fight inequality. – Reuters