Where We Stand On G20 Implementation

Mercoledì, 5 Luglio, 2017

John Kirton, Brittaney Warren

As the Group of 20 (G20) leaders assemble in Hamburg for their 12th summit on July 7-8, 2017, many wonder whether G20 summitry is worth the time and trouble, especially amidst the high profile divisions between German chancellor Angela Merkel’s open, cooperative Europe and President Donald Trump’s protectionist United States. Even if at Hamburg G20 leaders manage to make clear commitments, many doubt that they will actually deliver them once they leave their sunny global summit peak and return to the dark, distracting valleys of domestic politics back home.

Yet, the evidence shows that G20 summitry does deliver. Indeed, since the G20’s creation at the leaders’ level in 2008 it has made 1,863 politically-binding commitments across 18 distinct issue areas. Of these commitments, the G20 Research Group at the University of Toronto has assessed 198 priority ones. Average compliance with these is 71%.

Moreover, since 2008 overall compliance has remained solid, even in the few months after Trump’s inauguration. In the first half of the G20’s life, compliance fluctuated. It was at a high at Washington in 2008 with 75%, and at a low the next year at London in 2009 with 59%. However, since the 2011 Cannes Summit compliance rose again and has not since fallen below 68%.

Most recently, compliance was 72% with the priority commitments assessed six months after the 2016 Hangzhou Summit on September 4-5. This then rose to an all-time high of 79% by the end of the 2016-17 compliance cycle, on the eve of the Hamburg Summit.

 

The Firm Historic Foundation, 2008-2015

This solid and rising compliance performance provides a firm foundation for progress on the agenda chosen by Germany this year. Under Germany’s first thematic pillar of “Building Resilience,” are issues related to the G20’s first foundational mission of ensuring global financial stability. Here the G20’s overall compliance from 2008 to 2015 on macroeconomic policy is 80%. Also in this bucket is labour and employment at 78% (but with a declining trend) and international taxation, also at 78%. Compliance on financial regulation is 75%, international financial institutional reform is below average at 68%. As is trade at just 63%.  

Under Hamburg’s second pillar of “Improving Sustainability,” are global health commitments which average 77%. Compliance on energy is 73% (also with a declining trend). On the lower end of compliance in this bucket are the issue areas of development and climate change each at 66%, gender at 61%, and digitalization or ICT at 55%.

Under the third pillar of “Assuming Responsibility,” average compliance on terrorism is 87%. On migration it is 80%, and on food and agriculture it is 70%. It is significantly lower on anti-corruption at 57% and on Africa at just 53%.

 

The Hangzhou to Hamburg Surge

Since Hangzhou compliance has risen overall, at 79% for period between Hangzhou and Hamburg, with improvements in a couple of issue areas showing their growing salience. Jumping out is digitalization, a central focus of the Chinese presidency. With this priority commitment — to share knowledge in the field of technology and innovation — compliance was a perfect 100%. It was also high with the commitments related to the private sector: on corporate governance compliance was 100%, while on creating a conducive environment for investment it was 95%. Building tax capacity in developing countries was also given priority. It had 95% compliance. Macroeconomic policy followed closely with 88%. Tackling terrorism through financial regulations had 85%, managing migration flows had 73% and compliance on gender stayed close to the overall average across all issue areas at 63%.

Not showing much sign of improvement however were the first big divisive issues for Hamburg — climate change and energy. On climate change compliance was 73%, a bit higher than the overall average over all years. However, on energy, specifically the commitment to phase out inefficient fossil fuel subsidies, compliance dropped, continuing a steadily declining year-to-year trend. From the 2015 Antalya Summit compliance was 33%. From Hangzhou it was at an all-time low of 10%. Improving energy efficiency, however, was better at 78% compliance.

On the second most divisive issue at Hamburg — trade — there is more hope for momentum for Hamburg. While compliance was a relatively lower 65% on anti-protectionism from the Hangzhou Summit, it was a high 90% on lowering trade costs and 80% on promoting e-commerce.

 

The Trump Effect

The ability of the G20 club to withstand the unilateral, protectionist instincts of Donald Trump is seen in the compliance by its member countries. From 2008 to 2015, U.S. compliance was 77%, sitting in seventh place. Six months after Hangzhou, U.S. compliance slid slightly to 76%. Then by the Hamburg Summit’s eve, under Trump, taking office on January 20, 2017, compliance fell a little further to 74% for 13th place. Thus far U.S. withdrawal from G20 leadership has not dragged down the G20’s compliance, which rose from 71% six months after Hangzhou to 79% just ahead of Hamburg.

The U.S. decline may well have spurred other members to take its place. Hamburg’s host, Germany, traditionally at 84% for second spot, first dropped after Hangzhou to 79% for fourth but then spiked to 87% in fourth as Hamburg arrived. The EU, traditionally at 82% in fourth, first dropped like Germany to 79% in fourth but then soared even more to 92% in first. Similarly, the United States next door neighbour, Canada, traditionally at 81% in sixth, soared after Hangzhou to 89% for first and then to 92% in first.

The surge in G20 leadership is most notable from China (Kirton 2015). Historically, its compliance averaged only 68% for 10th place, Then after hosting at Hangzhou it first spiked to 82% for third place and finally 87% for fourth place. This shows that the G20 is still the global governance club that creates the ties that bind its members, even the most powerful ones in the world.

 

References

Kirton, John (2013), G20 Governance for a Globalized World (Abingdon: Routledge)

Kirton, John (2015), China’s G20 Leadership (Abingdon: Routledge).

 

John Kirton, Co-director, G20 Research Group

Brittaney Warren, Chief Compliance Researcher, G20 Research Group

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