World 5.9.2016 03:01 pm

G20 treads lightly on ‘globalisation’ taboo

This photo taken on March 29, 2015 shows the top of a tower looming out of heavy fog in Qingdao, east China's Shandong province. Falls in Chinese housing prices decelerated in March from the previous month, a survey showed on March 31, after authorities loosened mortgage and tax policies as growth in the world's second-largest economy slows. AFP PHOTO

This photo taken on March 29, 2015 shows the top of a tower looming out of heavy fog in Qingdao, east China's Shandong province. Falls in Chinese housing prices decelerated in March from the previous month, a survey showed on March 31, after authorities loosened mortgage and tax policies as growth in the world's second-largest economy slows. AFP PHOTO

Facing populist ire at home, leaders at the G20 summit have tried to walk a fine line: acknowledge anti-globalisation anger while arguing that ever more liberal trade is the cure for sluggish economies.

“The feeling of the G20 is that if we do not address the question of fairness, it will endanger global governance as we know it,” a senior European diplomat told AFP at the sprawling venue in the Chinese city of Hangzhou.

Leaders from the Group of 20 economies sought to put a gentler face on global trade, touting its benefits in lifting millions out of poverty, while acknowledging that too many had been left behind.

It was a striking tone for the Group of 20, which represents 85 percent of world GDP and two-thirds of its population.

But the declaration of inclusion and equality struck an incongruous note in a city largely deserted of ordinary people. Authorities have detained potential troublemakers and ushered away millions of citizens to make way for delegations that swept in along empty highways.

Germany’s Angela Merkel best illustrated the delicate approach, calling for the system to be made fairer but also speaking out against the temptation to look inwards, with “protectionist measures that put the brakes on growth”.

“The fight against inequality is an important theme, to firmly connect growth and social justice,” said Merkel, whose own approval ratings have sagged after she welcomed huge numbers of refugees into Germany.

French President Francois Hollande said: “France is for globalisation but on condition that it is regulated, that there are principles, standards, particularly for the environment, for society.”

– Backsliding on trade –

China’s leader Xi Jinping in his opening speech warned against protectionism and backsliding on trade amid a backdrop of sluggish global growth.

But there have been mixed messages from the group’s members.

US President Obama came to the summit to advocate his two signature trade deals for the European Union and Asia-Pacific. But at home his party’s nominee Hillary Clinton has disowned the policies, which stand to lose her votes.

For opponents of free trade, there is no bigger target than the Transatlantic Trade and Investment Partnership (TTIP) which Washington wants to finalise before Obama steps down in January.

Activists have criticised it since negotiations began in 2013, believing it will give big business unfair benefits and allow multinationals to escape regulation through the backdoor.

Obama admitted before the G20 there was a “reaction” to globalisation and that people were “absolutely right” to worry about inequality, but insisted: “The answer is not to pull up the drawbridge.”

With a note of regret echoed by other leaders at the summit, he said governments should provide better benefits and protections for workers, as “unfortunately we haven’t done enough of that”.

– Building walls –

China took every measure to ensure that the anti-globalisation fury on display in protests surrounding international summits over the years was absent from Hangzhou, which was put under the tightest security lockdown.

But despite the calm, the talks took place amid a perception that the global economic order exemplified by the G20 is not working for ordinary people.

Many working class citizens in developed countries believe the benefits from globalisation have flowed disproportionately to the wealthy, educated and mobile, while their own incomes have stagnated.

Canadian Prime Minister Justin Trudeau set the pace as he arrived in Hangzhou, saying leaders must push back against a tide of protectionism and nationalism.

Trudeau did not explicitly reference Donald Trump’s populist campaign for the US presidency, but alluded to the Republican nominee’s platform as he argued for the benefits of free trade.

“We know that building walls…does not create opportunity, growth, or benefits for the middle class.”

Britain’s vote to leave the European Union — so far the most striking manifestation of the global mood — has left it with the task of renegotiating access to the markets of the rest of the world.

New leader Theresa May sought to get a head start in Hangzhou but faced a Japanese warning over the fallout from Brexit and a lack of interest from the US — illustrating the perils of opting out of the world’s biggest economic structures.

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