- US President Donald Trump avoided an escalation of the tariff war with China, and even said he would relax restrictions on US companies selling to telecoms giant Huawei.
- Europe and China hit back against Trump's attempts to further undermine the Paris climate agreement, and ensure that the US is the only country opting out in the final communiqué.
- The EU paraded its biggest trade deal, struck with South America on Friday night.
DISASTER AVERTED IN OSAKA: Phew, the hurricane missed our little, global village at the G20 this time, but it doesn't feel like it'll be too long before the storm clouds gather again. We avoided a worsening of the US -China trade war, and US President Donald Trump failed in an attempt to further undermine the Paris agreement on climate change, after push-back from the EU and China. But these are small victories.
While leaders averted a meltdown, they failed to move forward. On climate change, the G20 stuck to promises made two years ago and failed to advance concrete carbon reduction targets. On WTO reform, leaders failed to agree meaningful proposals to tackle subsidies or save the all-important arbitration body in Geneva that seems set to collapse at the end of the year, with Washington blocking the appointment of judges.
Catching up with Kim: Before jetting off to the Korean peninsula, Trump issued a surreal Twitter invitation to North Korean leader Kim Jong Un that they should meet up for an impromptu summit on the Demilitarized Zone to shake hands and say "hello." It's only a matter of time before these two start playing golf together. Still, Trump will have to hope Kim Jr. isn't as good as his father, who (according to ever-reliable North Korean state media) scored 11 holes-in-one the first time he picked up a club.
Sayonara: That, alas, is it from your team from the South China Morning Post, POLITICO Europe, POLITICO. We've certainly enjoyed it. See you again soon. | | | PEACE, FOR NOW: Negotiations aimed at resolving a damaging trade war between the world's two largest economies are "right back on track," Trump declared Saturday after a meeting with Chinese President Xi Jinping. The talks had been on hold for nearly two months after Trump accused the Chinese of changing their mind about some things they had previously committed to do.
Trump told reporters that a 25 percent tariff on $250 billion worth of Chinese goods would stay in place. But he agreed in the meeting with Xi that he would not impose a 25 percent duty on another $300 billion worth of Chinese goods, as he previously intended to do. For its part, China agreed to step up purchases of US farm goods and other products. Trump didn't mention any specific volume of purchases, but said the US side would give China a list of goods to buy.
Leeway for Huawei: In one potentially controversial area, Trump said he wanted to loosen a trade ban that was recently imposed on Chinese telecommunications giant Huawei because of national security concerns.
Trump indicated he thought the ban was too restrictive because Huawei is a major customer for many US technology firms. "We send and we sell to Huawei a tremendous amount of product that goes into the various things they make," Trump said. In another area, Trump indicated he wanted to reform immigration policy to make it easier for Chinese students to work and stay in the United States after they complete their education.
Xi sounded happy. In an official sounding way: He cited the "ping-pong diplomacy" that began at the 1971 world table tennis games in Nagoya, Japan, and eventually led to a normalization of relations between Washington and Beijing. "China and the United States both benefit from cooperation and lose in a confrontation. Cooperation is better than friction, and dialogue is better than confrontation," Xi said.
TRUMP CALLS PELOSI ON USMCA: Trump had other world leaders to talk to over the past several days. But he took time out of his schedule Friday night in Osaka to make a phone call to the person who holds the fate of the US -Mexico-Canada Agreement in her hands: House Speaker Nancy Pelosi. "I said view this as a bipartisan deal because a lot of the Democrats want it," Trump said at his press conference.
Trump did not indicate whether he plans to formally submit implementing legislation for USMCA in coming days. Democrats have said that would be premature because of concerns they have about labor, environment, pharmaceutical and enforcement provisions of the pact. Trump did express confidence Congress would pass the agreement. "I think you'll get a great vote" in both the House and the Senate, he said. | | | TRUDEAU RAISES ISSUE OF DETAINED CANADIANS WITH XI: Canadian Prime Minister Justin Trudeau gets an A for effort but it doesn't appear he made any headway with Xi in securing the release of two Canadians imprisoned in Canada. Interactions between the two leaders during the G20 could politely be called "cold."
The contact between the two was the first since diplomatic and trade relations turned sour last December when Canadian police arrested Chinese telecom giant Huawei's Chief Financial Officer Sabrina Meng Wanzhou on a US extradition warrant and Chinese authorities arrested two Canadians on "national security" charges.
Kill the chicken, scare the monkey: China has charged Michael Kovrig and Michael Spavor with spying, a move widely seen by those outside China as retaliation for Meng's arrest.
Beijing could not afford to hit back against the real target, US President Donald Trump, so it struck against a proxy.
"You can rest assured that the case of Canadians detained in China is something we will continue seriously," Trudeau said in a press briefing after the G20 summit concluded.
Lost in translation: Despite Trudeau's claim to have had "constructive conversations" with Xi, video footage of the G20 summit appeared to show frosty interactions between the two. During the Leaders Working Lunch on Friday, Trudeau and Xi did not shake hands or look at each other, even though the two sat next to each other thanks to alphabetical seating.
Canadian reports said there was no interaction because Xi's translator was not with him. In the evening, just before the culture performance was about to start, Trudeau and Xi were seen talking briefly with each other.
BRASSED-OFF BRAZILIANS: Bloomberg reports that things went even worse with Brazilian President Jair Bolsonaro, who called off a meeting on Saturday in Japan with Chinese counterpart Xi Jinping after his delegation was left waiting.
| | THE CLIMATE LEVEES HOLD: It went down to the wire, but Europe and China fought off a big push by Trump to water down global climate ambitions. The US had wanted Brazil, Australia, Turkey and Saudi Arabia to join Washington in rowing back on the Paris climate accord. In the end the G20 was reduced, yet again, to the 19+1 format, in which the US kept a special carve-out. Two senior EU negotiators said they had fought with the United States over the climate chapter until 4 a.m. on Saturday, when they decided to pause talks as they saw no way out of the deadlock. Around 11 a.m., things started moving again as sherpas handed over the baton to heads of state, who agreed to back the '19+1′ format.
French fury: French President Emmanuel Macron was far from happy about Trump's attempts at sabotage. "We [the G20] are increasingly disconnected from the rest of the world … Our scientists every day remind us of our duty in matters of climate change and biodiversity, our youth every week in France and many countries remind us of our duty, while we at the G20 continue having debates on whether we can still cite the Paris agreement."
Macron also questioned the value of G20 meetings, considering the "carbon footprint" that comes along with sending thousands of people across the world and said that alternative forums such as the U.N. and regional alliances might be better suited to circumvent a US blockade.
Green allies: Europe's tussle against the US was helped by the fact that the Chinese, for whom pollution is a hugely sensitive political issue, rallied to the climate call. China's Foreign Minister Wang Yi, and his French counterpart Jean-Yves Le Drian said they "agreed on the importance for all countries to fully fulfil their commitments in the UNFCCC and the Paris Agreement to the letter," in a statement. Both countries promised to increase their emission reduction targets and said they would "publish their long-term mid-century low greenhouse gas emissions development strategies by 2020." | | MEGA TRADE DEAL: The Europeans in Japan were keen to parade their newly minted trade deal — their biggest — with the Mercosur bloc of Brazil, Argentina, Paraguay and Uruguay. The "Mercosaurus" finally hatched on Friday night in Brussels, after 20 years of start-stop talks. Here's a video of the big moment.
Liberals glowing and gloating: The deal certainly gave the EU bragging rights in Osaka, allowing the proponents of multilateralism to shout "in your face" to Trump and his tariffs as well as to Russian President Vladimir Putin's warnings about the end of liberalism. A press conference initially billed as a joint appearance by European Commission President Jean-Claude Juncker and Argentine President Mauricio Macri, instead turned into a victory party with all the EU leaders arrayed on stage, even U.K. Prime Minister Theresa May.
A historic moment: "I like to use words a bit carefully, but this is a truly historic moment — this agreement has been two decades in the making," Juncker declared. "This deal is a real message in support of open, fair, sustainable and rules-based trade, because trade creates good jobs for all concerned," he continued. "It shows that in these turbulent moments agreements can be reached. Mutually beneficial compromises can be found."
Blockbuster, by the numbers: Juncker relished running through the numbers. "This is a landmark agreement for a number of reasons," he said. "Firstly, it's sheer size. The agreement reached today will create a free trade area covering 760 million people ... The immediate benefits will be significant. The agreement will save European companies up to €4 billion in duties at the border. This four times more than our agreement with Japan. It opens up new markets, for instance in public procurement and breaks down non-tariff barriers."
Something for South America too: "Mercosur in turn will have access to the biggest market in the world" Juncker added. "Its companies will be able to serve 500 million consumers virtually tariff free."
But questions on climate remain: the deal will tarnish the EU's climate credentials. At heart, it's a cars-for-cows deal, neither being famously green technologies. In short, this isn't over yet and you can expect Europe's farmers and Greens to try to marshall opposition to ratification. There could still be years to run, or maybe years and years to run. | | | FRIENDS LIKE THESE: After exchanging light-hearted banter about election-rigging with Vladimir Putin, Trump upped the ante by lavishing praise upon Saudi Crown Prince Mohammed Bin Salman, while ignoring questions about the grisly murder of Washington Post journalist Jamal Khashoggi. Trump has largely ignored a conclusion by the Central Intelligence Agency that Prince Mohammed ordered the killing. Instead he praised Prince Mohammed for opening up his country and improving women's rights. "I want to just thank you on behalf of a lot of people, and I want to congratulate you. You've done, really, a spectacular job," Trump told the prince. OK. You've got to be polite. He is the next G20 host in Riyadh, after all. Not sure the press will be quite so keen on that summit. | | G20 DECLARATION TONES DOWN CALL FOR WTO REFORM: G20 leaders agreed on the need for WTO reform, but the final declaration seems less alarmed about the current world situation than an earlier draft seen by POLITICO. That version said the rules-based multilateral trading system was at "a critical juncture, facing unprecedented challenges." It also called for "a sense of urgency" in pursuing reform in the lead-up to the 12th WTO Ministerial Conference in Kazakhstan next year. The final version drops that language in favor of a more measured tone.
Don't mention protectionism: Another section calling on countries to "fight protectionist practices that impede fair competition" was also expunged, apparently at the insistence of the United States. Instead, the leaders made a commitment to "strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment" as well as "to keep our markets open."
Dispute settlement system: One sentence that did survive concerned the ongoing crisis over the WTO's dispute settlement system as a result of the US block the appointment of new Appellate Body judges. The final language seems to reflect US concern that the Appellate Body has exceeded it mandate by making new international law. Reflecting that, the G20 leaders agreed "that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by the WTO members." | | | From lifestyle to business and breaking news to daily digests, never miss a story. Browse our newsletters. | | | | | | | |
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