[SCMP Column] Frustration in Hamburg

July 10, 2017

If you thought the British Lions vs All Blacks final rugby test on Saturday was brutal, punishing and either side’s victory up into the closing seconds, then you were only limbering up for the G20 Summit in riot-torn Hamburg.

You needed to be a master of three dimensional chess to stay on top of what was happening – whether out on the burning streets of one of Germany’s leading port cities, or in the G20 meetings themselves: Trump with Putin: Xi Jinping with Trump: May with Trump: Enrique Pena Nieto with Trump: Macron with Modi; Modi with Xi: Merkel with everyone: Abe with Xi: Erdogan with anyone willing to spare the time. And what a banquet of challenges: North Korea, trade and protectionism; climate change; Qatar; Syria; migration; food aid. Even from 7,000 miles away the blood and the sweat were palpable.

Torn between no deals or empty deals and agreements to disagree – with Trump’s “American First” mantra predictably resulting in “America Alone” – ringmaster Angela Merkel cemented her hard-earned reputation as head-and-shoulders the world’s most accomplished diplomat by opting to celebrate empty deals. It felt a bit like Shakespeare’s Macbeth at the end of the epic two days of activity: “A tale told by an idiot, full of sound and fury, signifying nothing.”

While it is difficult not to despair of Trump, who so obviously loves the theatre, and being treated like a very important person by so many very important people, it is at the same time hard to understate the value of him taking part. He must at some point surely recognize that the world is a complicated and interconnected place that cannot simply be organized around the principle of “America First”. And it is hard not to be charmed by the novel use of his wife and daughter to break ice, and contradict the normally stodgy world of diplomacy.

Rather as Mrs May and Brexit have concentrated the minds of the European Union’s other 27 states, and forged a sense of unity rarely seen in the past two decades, so Trump has concentrated the minds of the other 19 in the G20. In spite of his insistence on America’s right to protect its market, the other 19 have converged unanimously around a commitment to fight protectionism. In spite of his reaffirmation that he will not sign up to the Paris Climate Accord, the other 19 have reaffirmed their commitment to press ahead regardless towards CO2 emission reductions.

It is easy to be cynical when he emerges from more than two hours one-on-one with Putin to tell the world that “we have had some very, very good talks”, but there can be little doubting the value of a presumably meaty discussion. Silence on Ukraine and Crimea will disappoint many, and defusing military action in southern Syria might not add up to much, but after recent standoffs, even small cooperative gestures are significant.

His celebration with the UK’s Mrs May over plans for a bilateral trade deal once the UK is out of the embrace of the EU was surreal – the more so for boasting that it will be “a very big deal, a very powerful deal, good for both of our countries”. Coming the day after the 27-member European Union had agreed in principle a massive trade deal with Japan, the US-UK deal looks neither big nor powerful, nor very good for either country – but perhaps provides each of them with theatrical comfort as they begin long, lonely and hopefully futile journeys to rebuild world trade around bilateral deals. One can only hope they do not take too long to discover how harmfully counterproductive such a strategy is for their businesses, their economies, and the wallets of their consumers.

Xi Jinping’s diplomacy was less high-profile, but no less significant. He continues to commit China to trade liberalization, but will still take a long time to convince other G20 members that he can fill the shoes of the US as a true champion of free and open trade. Not just the US, but also many EU members remain anxious about the growing international clout of China’s many state-owned enterprises. From a trade point of view, there was a sense in Hamburg of calm before the storm, with a number of moves imminently expected from the US against Chinese and European steel and aluminium exports, and against Chinese investment in the US technology sector.

Xi is understood to have had informal discussions with India’s Modi about the dangerous little conflict that has flared between Indian and Chinese troops in the Donglong valley way up in the Himalayas pincered between Sikkim and Bhutan. But there are still hopes that this surreal skirmish will subside of its own accord.

Perhaps most important for Xi Jinping, there was also no clear progress on the dangerously unstable escalation of the military standoff with North Korea, though there were some intensive discussions on the margins of the G20 between all of the key protagonists – South Korea, the US, China and Japan. One has an ominous sense that conflict is going to boil over badly and soon, with only messy outcomes.

As if the three-dimensional chess within the G20 meeting rooms were not enough to reckon with, the appalling 48 hours of violence that wrecked the streets of Hamburg were an important reminder of the grim public mood in Europe after a decade of recession and austerity, in particular among the young.

While many were predictably protesting against globalization and US withdrawal from the Paris Climate Accord, the militancy was perhaps more forcefully fuelled by anger at widening inequality across the world’s economies over the past decade. That should carry a powerful message to China, which is today one of the world’s most unequal economies, and to Hong Kong which among the world’s cities is second only to New York in terms of the extremity of the divide between rich and poor.

From this vantage point, the G20 meeting and Hamburg’s shocking street violence perhaps provide a slightly different insight from Shakespeare’s Macbeth – the streets were full of sound and fury, but it was definitely signifying something. Trade and other more dangerous conflicts may still be looming on the horizon, but the odds on managing them effectively will surely have been improved by so many of the world’s leaders spending meaningful, civilized time together.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view. Opinions expressed are entirely his own. 
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