G20 leaders, many embattled and questioned at home, struggle to manage globalization or explain its rewards.
By Chris Miller*
The G20 meeting of world leaders in Hangzhou, China displayed more signs of discord than cooperation. In theory, the annual meeting of those leading 20 of the world’s largest economies is designed to explore political and economic collaboration. In practice, this meeting highlighted disagreement and reticence to tackle immediate crises.
Two broad themes stand out. First, competition among the world’s great powers is, if anything, increasing. Second, the economic underpinnings of the current order are under threat not from global leaders’ disagreements but because of a widespread popular sense that governments do not know how to manage globalization. This second trend is more disruptive because it is more unpredictable.
Surely, one might think, it is hard to get more unpredictable than Kim Jong Un, the North Korean dictator who recognized the G20 summit to which he was not invited by shooting three medium-range ballistic missiles into Japan’s air defense identification zone.
But the Korean risks seem manageable. More worrisome is the chance of a direct clash among the great powers, for example, over the disputed rocks and islands in the South and East China seas. This year’s G20 summit comes on the heels of a July ruling from an international tribunal that declared China’s expansive claims in the South China Sea illegal. For several years, Beijing has transformed a variety of rocks, one aptly named “Mischief Reef”, into large airstrips. The ruling was silently cheered by China’s neighbors in Southeast Asia, from Vietnam to Malaysia to the Philippines, but under pressure from China they have kept quiet. US President Barack Obama admonished China to respect the tribunal’s ruling, but Beijing marked the G20 meeting by gathering naval forces near the Scarborough Shoal, a contested reef that China occupies.
Where the South China Sea holds risks, the inability of the great powers to come to an agreement in Syria is proving destructive every day. Russia, the United States, and more importantly other regional powers are backing different sides in the country’s disastrous civil war. Russia along with Iran supports Bashar Assad’s forces, while Turkey and several Arab states fund a rebel alliance, part of which is supported by the United States. Meanwhile, the United States and its allies are waging an air campaign against Daesh, the terrorist group also known as the Islamic State.
In advance of the G20 summit, US Secretary of State John Kerry sounded optimistic about the prospects of enhanced cooperation between Washington and Moscow, whereby the two countries would work together against Daesh and other militant groups. But like the previous year of negotiations, these talks proved fruitless. Even had a deal between Russia and the United States been signed, it would have at best slightly reduced the fighting and allowed aid delivered to cities under siege. But after a “blunt and businesslike” meeting between Russia’s Vladimir Putin and Obama on the sidelines of the G20, now even modest goals in Syria look unattainable, with Obama citing “gaps of trust” that harmed the talks. And the Syrian war, which has lasted half a decade, killed several hundred thousand people, and displaced millions more, looks as far from resolution as ever.
Amid such disastrous wars and dangerous political conflicts, it’s hard to imagine global leaders who assembled in Hangzhou agreeing on much of anything. But on the second broad category of threats to the current order – unhappiness with globalization – the main conflict is not among countries but rather between leaders and disaffected portions of their population.
In many countries, influential groups are speaking out, and voting against, what they see as elites who are unable to manage globalization. Signs of this are everywhere. Britain is struggling to resolve a contradiction created by June’s vote for Brexit. Voters appeared to signal that international integration, both in terms of economics and migration, had gone farther than they were comfortable with. Now the government is struggling to devise a means of setting tighter limits on migration in particular without threatening the trade links on which the economy depends.
The rest of Europe, too, is facing similar trends. Calls are growing for Europe’s leaders to scrap a new trade deal with the United States, called Transatlantic Trade and Investment Partnership, on the grounds that it threatens Europe’s ability to autonomously regulate its economy. Traditional protectionism, of the sort that comes from producers who would be hurt from more efficient foreign competition, also plays a role. French leader François Hollande alluded to these sentiments in Hangzhou, declaring that “our country refuses a globalization without rules, where social models are pit against each other and dragged downward, where inequalities grow.”
Yet it would be wrong to interpret the backlash against globalization solely, or even primarily, in terms of the inequality cited by Hollande. German Chancellor Angela Merkel, for example, discovered after an election in the state of Mecklenburg-Vorpommern, which happened to coincide with the G20. Her Christian Democratic Union party came in third, overtaken by the Alternative for Germany, an anti-immigrant party that was founded only three years ago.
The backlash against Merkel, long seen as one of Europe’s most successful politicians, is due primarily to her policies on migration. Similar sentiments are drive much of the popularity of Donald Trump, the Republican presidential candidate in the United States, who has attracted fans with his promise to build a wall on the US border with Mexico.
What links these events is a belief that globalization has gone out of control. Some of this fear is not grounded in fact, such as concerns about Mexican immigration to the United States, which has slowed. Behind the fear lies a legitimate concern about how globalization can be reconciled with democracy. Trade deals with foreign countries by definition give up sovereignty over tariffs and regulations. That is their point: By standardizing rules in different countries, doing business is easier and products become cheaper.
The dilemma, as the British are now learning, is that with more control comes less integration. Many in the United Kingdom voted to leave the European Union, hoping for free access to European markets and control over migration. The reality, they are discovering, is that they now must choose. Coinciding with the G20, Japan issued a stark warning to Britain about the risks it faces if it cuts economic ties with Europe. Japanese companies, Tokyo warned, may opt to move if Brexit turns out badly.
The British have control, it turns out, but only over a limited set of options. That is true of nearly all of the conflicts about globalization today. Many people feel like globalization is beyond their control, but they value the wealth and opportunities that trade has created. There is no easy way to have complete sovereignty along with the benefits of global trade. With luck and skill, the leaders who assembled at the G20 can manage the political conflicts that divide them. Even longstanding problems such as climate change were addressed at the summit in Hangzhou. But the dilemmas posed by globalization seem set to persist.
*Chris Miller is associate director of the Grand Strategy Program at Yale and a fellow at the Foreign Policy Research Institute. He is currently finishing a book manuscript on Russian-Chinese relations.