The G20 in 2017: Born in a Financial Crisis—Lost in a Global Crisis?

Abstract

This introduction to the Special Issue, what we have named “The G20 in 2017: Born in a Financial Crisis—Lost in a Global Crisis?,” provides an overview of the achievements of the German G20 presidency (from December 2016 to November 2017) and puts it in the context of an increasingly contested global environment. It includes an assessment of the areas in which the German presidency has successfully carried through its initial priorities and the extent to which the G20 in 2017 has contributed to improved multilateral cooperation. This assessment is based on the contributions to the Special Issue and includes an overview of their main results in key policy areas, such as: climate, taxation, trade, sustainable development, and cooperation with Africa.

Why Analyse the German G20 Presidency?

The G20 at the level of heads of state and government was founded in 2008 to encourage cooperation among the economically significant countries to deal with the worst financial crisis since the Great Depression in the 1930s. Many scholars hold the view that the immediate crisis response of the G20, which included coordinated national stimulus programs, increased financing extended by the International Monetary Fund (IMF), stricter regulation of financial markets and banks, and a mechanism to avoid waves of protectionism, worked reasonably well (Cooper and Thakur 2013; Drezner 2014; Luckhurst 2016). In contrast to the 2008 financial crisis, the challenges faced by the G20 in 2017 were driven by political turbulence. The situation in 2017 was not only caused by the election of a U.S. president skeptical of rule-based trading, global climate policies, and multilateral cooperation as such, but also by a British referendum vote to exit the European Union and a wave of nationalism and populism in many of the G20 countries (Hurrell 2018, 94–7). Faced by extraordinary challenges, the German presidency, which began in December 2016 and ended in November 2017, had to rethink its approach to pursuing an ambitious and comprehensive agenda for the G20 process.

How did the German G20 presidency react to those new global circumstances and how did it address already existing and emerging challenges? In this Special Issue of Global Summitry, the priorities and achievements of the German G20 presidency in 2017 are reviewed with regard to four important policy issues: the 2030 Agenda for sustainable development, trade, climate, and tax; and two outreach processes—G20–Africa cooperation and cooperation with think tanks, or the Think 20 (T20) engagement group. Emphasis was particularly placed on whether, and how G20 decisions have contributed to efforts aimed at stabilizing, developing further, or shaping global sustainable development and multilateral cooperation. To assess the outcome of the G20 process in 2017, we argue that it is important to apply in the following three criteria:

1. Agenda-setting: Typically, the agenda of the G20 is driven by the political interests of each hosting presidency, pressing issues and concrete challenges pertaining to the global agenda, and path dependencies from previous G20 decisions (Crump and Downie 2018). Beyond those policy dimensions, the German presidency faced, in 2017, the challenge of new actor constellations as a result of changing political priorities in key Member States, in particular with regard to the value of international cooperation and the future of multilateralism. The agenda was also influenced by increasingly vocal civil society demands for more effective accountability of global forums, such as the G20, which, in essence, questioned the legitimacy of such forums. Accordingly, it is important to assess whether, and how the German G20 presidency was able to respond to those changing international circumstances not foreseen at the time the initial agenda was drafted. With regard to the agenda of the German G20 presidency, we therefore assess if the German G20 agenda was driven by new ambitions or continuity inwhich contextual dynamics at the national and global levels influenced the agenda setting of the German G20 presidency.

2. Policy formulation and norm setting: A second criteria relates to the question whether the G20 presidency was successful in executing its predetermined agenda. The G20 has become one of the main settings for the creation of global agendas and the establishment of policy goals in specific areas, especially in global economic governance (Kirton 2013). In doing so, G20 processes, it is hoped, also contribute to the development of global norms and of global governance reforms. With regard to policy formulation and norm setting, the articles of this Special Issue focus on the achievements of the German presidency in areas that have been priorities of the presidency generally. We examine whether the German G20 presidency launched new initiatives in relevant policy fields that are conducive to tackling global challenges related to, for example, sustainable development, trade and taxes, or climate change mitigation. Another important yardstick to assess a G20 presidency is whether it contributed to the continuity of decisions and initiatives of prior G20 presidencies.

3. Policy implementation: While it focuses heavily on policy formulation, the G20 as an informal club has no implementing agencies to facilitate implementation of policy decisions (Cooper and Pouliot 2015). G20 decisions are implemented either domestically in the G20 countries, or internationally by international organizations, such as the World Bank, the International Monetary Fund (IMF), or the World Trade Organization (WTO). If decisions are to be implemented successfully without undermining other global institutions, it is important to identify actors and institutions that are responsible for policy implementation at the outset of G20 decisions. Crucially, the G20’s agenda and norm setting roles and the implementation of its policies and decisions need to be linked to already institutionalized processes related to global governance to ensure that the initiatives of the G20 can strengthen multilateral institutions, global accountability mechanisms, and the legitimacy of global policy-making.

What follows is an analysis of the global environment of the German G20 presidency from its beginnings to the G20 Hamburg Summit, which took place on July 7 and 8, 2017. Additionally, there is an assessment of the German G20 presidency’s reaction to the substantially changing global environment. In the immediate following section, policy formulation and policy results, which came out of the summit are examined. This section is mainly based on the findings of the individual contributions to the Special Issue. The final section contains a discussion on how the different policies should be implemented and whether they are likely to strengthen multilateral institutions.

Global Ambitions of the German G20 Presidency: Dealing with Political Crisis

After delivering on its commitment to tame the global financial crisis, the G20 at the leaders’ level has been broadening its agenda, mainly through the initiative of emerging countries, taking on board issues that extend well beyond the core issues of financial stability and economic growth (Golub 2013). One of the first steps in that direction was the incorporation of development issues at the 2010 G20 Seoul Summit (Cherry and Dobson 2012). The expansion of the G20’s agenda culminated in 2016 under Chinese leadership. At the Hangzhou Summit, the group, in addition to focusing on structural reform, innovation-driven growth and international trade, also focused heavily on green finance, climate change, and sustainable development (Xiao 2017). One of the key outcomes of the Hangzhou Summit was the adoption of the “G20 Action Plan on the 2030 Agenda for Sustainable Development”, which called for aligning the G20’s work with the 2030 Agenda for Sustainable Development (G20 2016).

The initial goal of the German presidency was to continue this process and put global sustainability at the core of its agenda. In the priorities document of the German presidency, published on December 1, 2016, there is a statement indicating this high ambition (G20 Germany 2016). The German government framed its G20 agenda around three building blocks: building resilience, improving sustainability, and assuming responsibility. The traditional economic issues are included under the first building block, building resilience. For this block, the German G20 presidency focused on: structural reforms, reform of the international financial architecture, the development of financial markets, trade and investment, fair and reliable taxation, and employment. Many of those issues have been on the G20 agenda for years and the German G20 presidency included them to ensure continuity. The remaining two building blocks are dedicated to broader issues of global sustainable development. Under the headline improving sustainability, the German G20 presidency emphasized such issues as climate change mitigation, the implementation of the 2030 Agenda for Sustainable Development, digitalization, health, and women’s empowerment. Those perspectives combine stability and growth (the classical G20 agenda) with inclusive development within planetary boundaries (the 2030 Agenda). The third building block, assuming responsibility, included initiatives in the areas of forced migration, cooperation with Africa, fighting corruption and food security. It focused on the importance of collective action of the G20 in key areas of global interdependencies and global commons. It is mainly under the two latter building blocks that the German G20 presidency sought to go beyond the already existing G20 commitments by proposing new perspectives and initiatives.

The German G20 presidency also concentrated on outreach activities. It aimed to reach out to country groups not represented in the G20, in particular through the Compact with Africa (CWA), but also through greater engagement and dialogue with societal groups, the so-called engagement groups, representing businesses, civil society, labor groups, science-related “premier forum for international economic cooperation”, as declared in G20 communique from the Pittsburgh Summit, which took place in September, 2009 (G20 2009). The G20 has evolved into a club willing to address a comprehensive range of economic and noneconomic issues of global relevance.

This shift to an even broader agenda has been driven, as mentioned above, mainly by emerging countries and Germany followed in this wake (Cooper and Takur 2013). Partly, this development was also a reaction to the increasing number of socioeconomic challenges that many G20 leaders had to deal with at home. While economic inequality across countries is declining as a result of the economic growth in many developing countries, social and economic inequalities within countries, in particular, but not only in industrialized ones, is on the rise (Rodrik 2017). As a result of that development, dissatisfaction with globalization is growing among the populations of many industrialized countries and the “emerging powers” (Harms and Schwab 2015; Hurrell 2018). Security and developmental crisis have led to the highest forced displacement of people in decades. The burden of those forced displacement flows is being borne predominantly by developing countries within the region where the displacements are occurring, but the impacts of those flows are also being felt and intensively debated in industrialized countries (Dick and Schraven 2018). Furthermore, G20 leaders now must deal with increasing calls to address multiple environmental and climate crises, including air pollution, soil degradation, and rising sea water levels (WBGU 2016).

The German G20 presidency was willing to follow the tracks of previous presidencies and shift the focus of the G20 beyond international financial and growth toward broader socioeconomic challenges. Furthermore, the German government had proposed new topics that had not yet been discussed within the G20 process, but were covered at other fora, such as global health, which was covered by the G7 (Jorgensen 2017). The initial German G20 agenda can thus be seen as a continuation of the German G7 presidency in 2015, which focused heavily on such issues as climate change mitigation, global health, and sustainability (Genderen 2015). Before that, Germany’s G8 presidency in 2007 had played an important role in preparing the establishment of the G20 and for a broader basis for global development (Fues and Leininger 2008). The German Heiligendamm Process of 2007 and 2008 provided an organized outreach process, which facilitated exchange with emerging economies from the Global South and which contributed to broaden the agenda of G8 and later on G20 (Leininger 2009). Other important points of reference for the German G20 presidency were the two key multilateral treaties that were adopted in 2015: the 2030 Agenda for Sustainable Development and the Paris Climate Agreement. Both treaties have been hailed as successful examples of multilateral cooperation.

The election of Donald Trump as the forty-fifth president of the U.S. in November 2016 was a key disruptive factor, calling into question the successful execution of a G20 presidency’s focus on global sustainability issues and multilateral cooperation. Of course, other disruptive factors, such as the threat to the European Union after the British referendum vote for Brexit, the increasing tensions between Europe and Turkey, and the political crisis in Brazil and South Africa, to name but a few, also needed to be taken into account. Dealing with political crises is part of the standard course of action for G20 presidencies. However, the year 2017 is often perceived as a game changer for the global order and, thus, the G20. In particular, if the president of the country that is the leading power of the liberal (economic) global order questions the very foundations of the system, including a rules-based multilateral trade, financial regulations, climate change mitigation, and multilateral cooperation in general, it is very likely that serious challenges to the key G20 commitments will follow. Risks that may ensue include the potential of the U.S. president to win over other country leaders dissatisfied with the status quo but yet unwilling or incapable of challenging it on their own (Messner and Snower in this Special Issue).

Given the divergent positions with which Donald Trump won the presidency and the fact that after his accession to office in January 2017, a number of positions in his administration still needed to be filled, it was unclear for some time what might be achievable at the 2017 G20 Hamburg Summit. The first important milestone to “test the waters” of what could be accomplished during the German-led G20 process was the meeting of foreign ministers from G20 countries on February 16–17, 2017 in Bonn, Germany. However, instead of giving the first indication on the Trump administration’s position on such issues as the implementation of the 2030 Agenda for Sustainable Development, and the Paris Climate Agreement, the U.S. delegation led by the then newly appointed U.S. Secretary of State, Rex Tillerson, remained largely passive during discussions (Berger 2017). The next opportunity to get a sense of the positioning of the new U.S. administration was at the meeting of finance ministers and central bank governors in Baden-Baden, Germany on March 17–18, 2017. While the meeting proceeded as planned with regard to the finance track issues, including financial sector regulation and international tax policy, newly appointed U.S. Treasury Secretary Steven Mnuchin was not willing to endorse previous commitments on anti-protectionism or climate finance (Koranyi and Heller 2017).

A third important pre-meeting for the Hamburg Summit took place outside of the G20. The G7 Summit that was held in Taormina, Italy on May 26–27, 2017, six weeks ahead of the G20 Summit, provided the stage for the first encounter between President Trump and the other G7 leaders. The discussions at the G7 Summit were tense: President Trump, while willing to accept a compromise on trade policy, voiced his disagreement on such issues as climate change and migration (Irish and Balmer 2017). As it turned out, the key outcomes of the Taormina G7 Summit, a compromise on trade and the decision of six G7 countries to support strong actions against climate change despite opposition from the U.S., were carried over, as it turns out, to the G20. They defined the path to compromise at the G20 2017 Hamburg Summit, making it possible to reach important decisions in other areas—tax, sustainable development, and cooperation with Africa.

Achievements of the 2017 G20 Hamburg Summit

This Special Issue offers a qualitative and focused assessment of the 2017 G20 Hamburg Summit based on the three criteria outlined in the first section. Accordingly, this assessment complements the more comprehensive and quantitative analyses of G20 summits concerning accountability, which have been provided by the G20 Research Group at the University of Toronto since the establishment of the G20. We first cover the achievements of the traditional policy fields (trade and taxation) addressed by the G20 prior to presenting the results of more recent G20 dealings directed toward sustainable development and climate. Finally, we discuss the findings on two outreach processes (Africa and T20).

What did the German G20 presidency achieve under the above-mentioned global circumstances? The authors of this Special Issue have examined the German G20 presidency’s achievements, as noted earlier, in four policy areas and two outreach processes (see Table 1). Two traditional policy areas, trade and tax governance, are covered in this Special Issue. They have been at the core of G20 activities since the establishment of the group) and were intensively debated during the German G20 presidency. Two policy areas, where important multilateral treaties have been adopted in 2015, are also covered in this issue and reflect the broadening of G20 agenda-setting: climate policy and sustainable development. Outreach processes are also included in the Special Issue’s analyses because they mirror the shifting patterns of global governance and alliances within the G20. The more frequent and regular the activities of the “Club of 20 Economies” have become, the more it has opened to other relevant country groupings and non-state formations. This is highlighted by the emphasis of the German G20 presidency on its “dialogue with civil society” through engagement groups including business (B20), civil society (C20), labor (L20), science (S20), think tanks (T20), women (W20), and youth (Y20).¹ This Special Issue focuses on two outreach processes that mark innovations in the G20 process: outreach to Africa and outreach to think tanks for evidence-based policy-making. The outreach with Africa is a government-to-government process, which implies political decisions from state actors and gives more weight to the follow-up of summit decisions. In contrast, the outreach with think tanks is less formal and concentrates on the preparation process in order to feed policy recommendations into agenda-setting and decision-making of the G20 and its participating states.

Table 1

Overview: policy areas and main achievements of the 2017 G20 Hamburg Summit

Policy area	Agenda-setting: continuity and change	Policy formulation: achievement
Trade	Initial focus of the German presidency was on support of the multilateral trading system, digital trade and investment facilitation. Trade became a strategic issue because of diverging views on the virtues of free trade and a rules-based multilateral trading system.	Successful accommodation of the anti-trade stance of the U.S., but the calibrated outcome related to the anti-protectionism stance will only slightly affect actual government behavior, agreement on institutionalization of excess capacity dispute.
Tax governance	Mainly following up on previous commitments such as on the base erosion and profit shifting (BEPS) initiative, but also focus on cooperation with Africa and tax certainty.	Opened debate on international tax cooperation by including new actors, most notably African governments; continuity of the BEPS process and automatic exchange of information; progress in fighting tax avoidance by multinational corporations and exchanging information among tax authorities; insufficient changes for developing countries.
Sustainable development (2030 Agenda for Sustainable Development)	Follow up of commitments achieved during the 2016 Chinese G20 process.	No breakthrough for enhanced sustainable development; the G20 renewed commitment to the 2030 Agenda for Sustainable Development; cautious steps taken to integrate the 2030 Agenda in accountability reporting; agreement on additional steps to foster implementation of 2030 Agenda; negotiations in a constructive atmosphere, which were guided by interest in finding a common ground
Climate	High on the agenda of the German G20 presidency. Support for the implementation of the Paris Climate Agreement, energy conservation and efficiency and sustainable infrastructure	Two course changes: positive change: G19 (without U.S.) consensus expressed in the Hamburg Climate and Energy Action Plan for Growth; negative change: absence of ongoing mandate for the Financial Stability Board (FSB) to address the impact of climate change on the global financial system is cause for grave concern.
Outreach to Africa	On the G20 agenda since the 2009 G20 London Summit, reinforced during the 2016 G20 Summit and prioritized during the German G20 presidency; for the first-time part of the G20 finance track	“Compact with Africa,” major initiative to cooperate with Africa on economic development; focus on private investment with limited acknowledgement of sustainability and human development; competition between Africa initiatives of major G20 countries.
Outreach to research	A more structured interaction between the G20 and a broad range of think tanks as part of the Think20 process.	Increased number of think tanks of the Global South are part of the T20; increase in output of policy recommendations; improved interaction with the G20 to ensure impact.

Notes: Own compilation based on the contributions to this Special Issue and on compliance reports of the G20 Research Group (http://www.g20.utoronto.ca/analysis/index.html).

Global trade policy became contentious in 2017. Under the administration of its newly elected president, the U.S. is questioning the paradigm of liberal economic governance particularly trade multilateralism. Berger and Evenett in this Special Issue assess the success of the German G20 presidency in managing this “Trump-induced stress test” on trade policy. The commitment to not raise protectionist barriers to trade has been a core element of the G20 since its inception at the leaders’ level in 2008. In 2016, the G20 established the Trade and Investment Working Group and adopted guiding principles for global investment policy by setting a strategy for global trade growth. In contrast to the Chinese presidency in 2016, the German presidency in 2017 intended not to have a strategic focus on trade policy. In the view of the anti-trade rhetoric during the U.S. election campaign and the decision by Trump early in his administration to withdraw from the Trans-Pacific Partnership, the German G20 presidency had to rethink this decision. As a result, a great amount of attention was directed toward trade issues. Berger and Evenett have taken the view that the negotiations on trade during the German G20 presidency serve as an interesting test case for assessing the effectiveness of the G20 as a non-binding, consensus-driven approach to international cooperation. The authors argue that the G20, on the one hand, provided a flexible-enough forum to accommodate the concerns of the U.S., while not alienating other major trading powers, such as China. The U.S. concerns about “fair trade,” the legitimacy of trade defense instruments and excess capacity could be taken on board while maintaining the commitments to a rules-based international trading system and to fight protectionism. Berger and Evenett, on the other hand, question whether this diplomatic success, building on the compromise reached at the Taormina G7 Summit, was sufficient to alter government behavior. Drawing on comprehensive data on G20 trade remedy measures implemented since the global financial crisis in 2008, the authors argue that the G20 has done little to curb rising protectionism. The softening of the G20’s stance against protectionism at the 2017 G20 Hamburg Summit will most likely not encourage stricter adherence to the principle of non-discrimination by the U.S. and other G20 countries.

In the field of global tax cooperation, the German G20 presidency mostly limited itself to following up on previous initiatives, rather than presenting new ones concerning the international tax governance structure. However, von Haldenwang and Schwab in this Special Issue argue that Germany’s emphasis on including Africa in the policy process of the global tax agenda can be considered an innovative element of its G20 presidency. The inclusion of cooperation with Africa opened the debate on international tax cooperation to include new actors, most notably African governments. The main projects related to the international tax agenda, the BEPS initiative, and the automatic exchange of information have moved forward during the G20 process along the lines agreed on at earlier summits, but no new major projects have been launched. The authors argue that this apparent lack of ambition might have been caused by a realistic view on the limitations of reform resulting from political changes and differences in perspectives among core G20 Member States. By putting the topic of tax certainty on the agenda and discussing the implications of digitalization for taxation, the German presidency has rather discreetly prepared the ground for these issues to evolve further. Nevertheless, progress has been achieved with regard to fighting tax avoidance by multinational corporations and exchanging information among tax authorities. However, those changes are insufficient to address spillovers arising from mismatches between public finance and public service delivery. Developing countries, in particular, are finding it difficult to manage such spillovers under the current international tax system.

Sustainable development and promoting the implementation of the 2030 Agenda for Sustainable Development and its seventeen Sustainable Development Goals was a major objective of the German G20 presidency. Scholz and Brandi in this Special Issue argue that implementing the 2030 Agenda is crucial to address the collective challenges faced by the global community. Without the participation of G20 countries, those challenges cannot be tackled effectively. Germany’s agenda-setting followed up on the success of the Chinese G20 presidency in getting the G20 Action Plan on the 2030 Agenda for Sustainable Development adopted. Scholz and Brandi assess whether the German G20 presidency was successful in leveraging the implementation of 2030 Agenda. With regard to the G20 process, the authors note that the negotiations pertaining to the 2030 Agenda for Sustainable Development were carried forward in the G20 Development Working Group, took place in a constructive atmosphere, and were guided by interest in finding common ground. Overall, the assessment of the German G20 presidency shows that the outcome of the 2017 G20 Hamburg Summit can hardly be considered as a great breakthrough for sustainable development. Nevertheless, it provides several entry points for tangible advancement: the G20 renewed its commitment to the 2030 Agenda in the official summit communiqué, and managed to agree on additional steps to foster the implementation of it. This result is rather remarkable in the light of President Trump’s opposition to multilateralism. Furthermore, the G20 leaders approved updates made to the Hangzhou Action Plan. The outcome at Hamburg offers opportunities for real progress to promote the implementation of the 2030 Agenda if further action is taken by Member States and there is follow-up by G20 presidencies on these commitments.

Climate policy featured high on the agenda at the beginning of the German G20 presidency. Similar to the 2030 Agenda for Sustainable Development, the German G20 presidency followed up on a breakthrough made at the 2015 G20 Turkey Summit, and also on significant progress on climate change under China’s G20 presidency. Céline Bak argues that a qualitative shift occurred in 2015 regarding the integration of climate change matters into economic policy. G20 finance ministers and central bankers, at a meeting held on September 5, 2015, requested the FSB to consider the risks posed to the financial system by climate change. They emphasized the need to connect economic policy to climate policy by: aligning financial flows with climate commitments; setting criteria for infrastructure investment that address both environmental and economic goals; and developing natural gas markets and infrastructure to provide greater access to fossil fuels that are less carbon-intensive than coal. However, following the U.S. decision to leave the Paris Climate Change Agreement, climate change became a point of contention under the German G20 presidency. Against that background, Bak analyses the G20 commitments of the 2017 G20 Hamburg Summit. She concludes that the fracturing of the G20 consensus on climate change resulted in two course changes—one positive and one negative. A “near-consensus” was expressed in the Hamburg Climate and Energy Action Plan for Growth. Under the plan, the G19 (G20 members except for the U.S.) maintains climate commitments, including recognition of the role of sustainable infrastructure for inclusive less carbon growth and the alignment of financial flows with the 2°C emissions target outlined in the Paris Agreement. On the negative side of the ledger, the absence of an ongoing mandate for the FSB to address the impact of climate change on the global financial system is a cause for concern. To guard against a further fracturing of the consensus needed for structural reforms, such as carbon pricing, G19 leaders and finance ministers seemingly need to engage citizens, particularly young citizens, on how best to integrate economic, social, and climate policy.

Cooperation with Africa has been on the G20 agenda since 2009. It received more attention during the Chinese presidency in 2016, but it became a priority only during the German G20 presidency. Africa has very limited representation in global club governance; the G20 is a key example as South Africa is the only African country to be “part of the club”. Pan-African organizations are only invited as observers, unlike the European Union which is a formal G20 member. At the same time, developments in Africa are substantially influenced by decisions at the G20 level, such as those relating to trade, taxes, macroeconomic stability, or climate. In her contribution, Leininger analyses the reasons for prioritizing cooperation with Africa and assesses the commitments made by 2017 G20 Hamburg Summit. She concludes that the African continent has gained attention in German policy circles and the public because it is perceived as the source of the “next generation” of migrants heading to Europe. Addressing economic development in Africa is intended to prevent more migration to Europe through improving the well-being of societies in African countries. The CWA is the main achievement of the summit with regard to future cooperation with Africa. It focuses on directing private capital to Africa, which is decisive for development. However, the CWA hardly deals with the major problems associated with private investment in Africa. For instance, inclusive governance is a prerequisite for turning economic growth into sustainable development for human beings. Although the CWA acknowledges the need for good governance, specific reforms or support to improve good governance are not proposed in it. G20 members endorsed the German proposition for the CWA, but the majority did not proactively support the initiative. In contrast, initiatives on cooperation with Africa by G20 states have increased and created competition in that regard, especially between China and India.

Since the Mexican G20 presidency in 2012, think tanks have been accompanying the G20 process. In 2016 and 2017, the T20 underwent a major reconfiguration by broadening the range of think tanks that participated in the process, particularly think tanks from emerging countries and non-G20 developing countries. In addition, an improved working structure was established by introducing issue-specific task forces with the aim to formulate policy recommendations for the G20 and its work streams. As a result of the emerging crisis of multilateralism in 2016–2017 and the tensions within the G20 club, the German presidency supported the engagement of the transnational T20 network and intensified the interaction between the T20 network, its task forces, and different G20 work streams.

In their article, Messner and Snower, as co-chairs of the T20 process in 2016 and 2017, stress that human needs cannot be met by improving material prosperity alone. Drawing on a variety of policy briefs produced by the T20 task forces, they argue that the main task of the G20 today should be to align its work with growing environmental and social problems. Furthermore, Messner and Snower highlight the implicit shift of the G20’s modus operandi away from a consensus-based to a more flexible approach that reduces the veto power of G20 members on strategically important issues, such as climate change. Last but not least, they argue that the G20 process in 2017 has been more successful than publicly accepted, owing to the agreement on a number of detailed issues. In particular, tangible results were achieved in the areas of digitalization, climate change, food security, migration, and cooperation with Africa.

Holding the Line on Multilateral Cooperation

Whether the achievements of the 2017 G20 Hamburg Summit will live up to the German G20 presidency’s promise to make a difference in “shaping an interconnected world” is a matter of perspective. The German G20 chair, as a committed multilateralist, had aimed to shift the focus of the G20 toward global sustainability. This is evident in the attempts to strengthen the role of the G20 in supporting the Paris Agreement and the 2030 Agenda for Sustainable Development. In addition, it had put forward a number of specific initiatives aimed at supporting global sustainable development, covering such topics as health, food security, and cooperation with Africa. This high ambition was challenged by a G20 that included key members not willing to support efforts to advance further and, in fact, sought to retreat from previous G20 commitments. Those important contextual factors should influence how the German G20 presidency’s contribution to multilateral cooperation is judged. Furthermore, past decisions and the monitoring of them should remain on the agenda of the different working groups of the G20, which meet frequently to ensure the implementation of them (Cooper and Takur 2013, 80). The assessment then focuses on delegation and multilateral cooperation in the six areas of interest to this Special Issue.

Against the background of an increasingly contested global environment, the 2017 G20 Hamburg Summit prevented backsliding of multilateral orders in the areas of trade and climate. The German Summit also achieved small steps in the effort to consolidate cooperation in implementing the 2030 Agenda for Sustainable Development. While avoiding an erosion of entrenched multilateral principles is surely one of the key achievements of the 2017 G20 Hamburg Summit, it remains to be seen whether the broad range of policy initiatives will have a practical impact. G20 decisions are not legally binding and the “club” has no implementing bodies. The success of G20 commitments, in addition to the willingness of the member countries to align domestic policies, crucially depends on the level of effective delegation to global institutions and the alignment of them with ongoing multilateral policy processes. This delegation also requires the prioritization of multilateral cooperation by individual G20 states (Cooper and Takur 2013, 133, 144). Based on the fact that in most policy areas, the delegation of authority to implement and monitor G20 decisions remains low (Hilbrich and Schwab 2018), the effects of many of the commitments adopted at the 2017 G20 Hamburg Summit are likely to be weak. A case in point is the role of the G20 with respect to the multilateral trading system. Even though the G20 has mandated international organizations to monitor G20 trade policies, the mechanism set up to do that has not been sufficient to keep G20 governments from implementing new protectionist measures. It remains to be seen whether the explicit delegation for implementing the CWA, which was pushed strongly by the German presidency, to key international and regional organizations (the African Development Bank, the IMF, and the World Bank) is sufficient to achieve the long-term success of the initiative.

The main outcomes of the 2017 G20 Hamburg Summit reinforce the commitment to keep already existing global agendas, such as the BEPS initiative and the climate agreement, going. It also includes the commitment to multilateral cooperation through constant interaction of policy-makers from different levels of hierarchy—from the working-level delegate in a G20 working group to ministers—with each other and with societal groups in the process to prepare the 2017 G20 Leaders’ Summit. Those processes were effective when there was a tangible, multiyear work agenda, which were implemented in cooperation with international organizations. One example is cooperation with the Organization for Economic Co-operation and Development in the area of international tax policy. The processes reach their limit when substantial reforms of global governance are needed, for example, to achieve sustainable development and to limit dangerous climate change, or when there are principled disagreements, such as on the benefits of free trade. However, during times of global turmoil, fostering commitments to multilateral cooperation can be viewed as an important outcome of the German presidency.

Footnotes

1

See https://www.g20germany.de/Webs/G20/EN/G20/Civil_society/civil_society_node.html;jsessionid=35D7209E8C697FD88D21E18DE4687633.s6t1.