Syria peace talks intrude as G20 tackles global economy

Hangzhou / AFP

G20 leaders met on Monday under pressure to reboot the world economy, but a stumbling push for a Syria ceasefire and Asia’s heated territorial disputes intruded on the summit in Hangzhou.
There had been hopes of a breakthrough in stemming the Syria conflict after the US said it was close to a deal with Russia. But frantic diplomacy failed to bear fruit, with Moscow accused of backtracking.
A US official said “differences remain” despite two rounds of talks between Secretary of State John Kerry and his counterpart Sergei Lavrov, but that they would meet again in coming days. Presidents Barack Obama and Vladimir Putin also met on Monday, but it was far from clear that they could find agreement on the intractable five-year crisis, in which the two support different sides.
The Group of 20 developed and emerging economies—this year gathering in a scenic eastern Chinese city which is largely deserted under a sweeping security operation—represents 85 percent of the world’s GDP and two-thirds of its population.
China’s President Xi Jinping has urged the leaders to avoid “empty talk” and confront rising protectionism that threatens globalisation and free trade.
There were fears the gathering will be short on substance, with no acute crisis pushing leaders to defy rising populist sentiment and to take difficult steps such as liberalising trade.
But an EU diplomat said that in their communique the leaders would make a strong stand on refugee flows, agreeing that they were a global issue and the burden had to be shared. The document, to be released later, “explicitly mentions the need for increasing financial assistance as well as strengthening the contributions of the global community”, the diplomat said.
The G20 will also set up a global forum to monitor efforts to combat world industrial oversupply, he said.
Excess capacity has suppressed prices and imperilled manufacturing, and the diplomat added that the final communique will criticise subsidies as “a root cause of market distortions”. China sees the summit as a showcase for its global leadership credentials, and Asian giant’s geopolitical issues swirled around the gathering.
North Korea reportedly fired three ballistic missiles off its east coast on Monday in its latest show of force, some two weeks after it test-fired a submarine-launched ballistic missile.
China is North Korea’s main patron and protector but has been either unwilling or unable to rein in its nuclear and missile ambitions that have sent tensions soaring across East Asia and beyond.
Xi told South Korea’s President Park Geun-Hye that Beijing opposed the US deployment of the THAAD anti-missile system in her country. The Chinese leader was also to meet Japan’s nationalist Prime Minister Shinzo Abe on Monday, their first encounter in more than a year with their nations divided by territorial disputes and recriminations over history.
“There are difficult issues between Japan and China, and because of that, it is important that the leaders exchange honest opinions and make improvements,” said Tokyo’s chief cabinet secretary Yoshihide Suga.
Beijing and Tokyo have a longstanding dispute over islands in the East China Sea controlled by Japan, which knows them as Senkaku, and claimed by China, which calls them Diaoyu. A new flashpoint is emerging his week, with the Philippines asking Beijing to explain the presence of Chinese vessels near the disputed Scarborough Shoal.
Chinese dredging in the area—just over 200 kilometres from the Philippines’ main island of Luzon, where US forces have a regular presence under a military pact—would represent a major escalation.
Beijing’s foreign ministry said Monday its only vessels in the area were coast guard and fishing boats.

Populism swirls
China is intent on keeping the G20 on script. In an opening speech Sunday Xi delivered a stern warning over sluggish global growth, financial market turbulence and receding global trade and investment.
But the talks take place amid a perception that the global economic order exemplified by the G20 is not working for ordinary people.
“Globalisation is not only positive, it can also engender inequalities between different groups, different populations,” Germany’s Angela Merkel told reporters on her arrival in Hangzhou.
She warned against the temptation for countries to look inwards, with “protectionist measures that put the brakes on growth”, but added: “The fight against inequalities is an important theme to firmly connect growth and social justice.”
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.” Britain’s vote to leave the European Union—so far the most striking manifestation of the global mood—leaves it with the task of renegotiating access to the markets of the rest of the world.

Japan issues warning over Brexit during summit talks

Hangzhou / AFP

Tokyo has issued its boldest warning yet over the potential fallout from Brexit, saying Japanese firms may shift key operations from Britain to Europe if they lose free access to the single market.
With a G20 summit under way in China, a Japanese government taskforce told Britain and the EU to minimise the “harmful effects” of Brexit on firms that treat the UK as a gateway to Europe.
Some of Japan’s best-known companies, including Toyota, Hitachi and investment bank Nomura, are re-assessing their UK investments after Britain voted in June to quit the 28-member EU, according to a report issued by Tokyo. “Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to Continental Europe if EU laws cease to be applicable in the UK after its withdrawal,” said the 15-page document, published late Friday.
The topic is almost certain to come up if Japanese Prime Minister Shinzo Abe and British leader Theresa May hold a meeting on the sidelines of the G20 talks in Hangzhou.
US President Barack Obama said at a joint briefing on Sunday with May that they had discussed trade and both countries aim to “ensure that we don’t see adverse effects” in their commercial ties.
Japan has warned that some of its firms were lured to Britain by its sales pitch as a launching pad for tapping the much-larger European market—adding that London has a duty to hammer out a Post-Brexit deal that protects Japanese companies.
“We strongly request that the UK will consider this fact seriously and respond in a responsible manner to minimise any harmful effects on these businesses,” the report said.
More than 1,000 Japanese companies do business in Britain, employing some 140,000 local people, and Japan’s direct investment in the country has topped 10 trillion yen ($96 billion) to date.
The report also urged Britain and the EU to make the Brexit negotiation process transparent to avoid “unpleasant surprises.”

G20 to agree refugees a global issue: EU diplomat

Hangzhou / AFP

The G20 group will agree at their summit in China that refugees are a global issue and the burden must be shared, a senior European Union diplomat said on Monday.
“The communique reaffirms that it is a global issue, and requires burden-sharing among the countries,” the diplomat said, shortly before the declaration was due to be released at the end of the summit.
“It explicitly mentions the need for increasing financial assistance as well as strengthening the contributions of the global community.”
The diplomat said G20 was making a strong stand, and had overcome initial reluctance from Argentina and Brazil on including the issue in the communique, but noted it was not a binding commitment. “There is a difference between commitment and enforcement… at least, it’s here,” he said.
“Of course we have to take into account the fact that it is a sovereignty issue… it is not an obligation, but the burden-sharing is there.”