Japan’s G20 Osaka Summit: Plans, Prospects, Possibilities
Dr. John Kirton, director, G20 Research Group
Paper prepared for presentation as the keynote address at a joint workshop on “The G20-UN Relationship: Working Together for a Secure, Sustainable World,” sponsored by Kwansei Gakuin University’s Integrated Center for UN and Foreign Affairs and the G20 Research Group, University of Toronto, with the support of the Bill Graham Centre for Contemporary International History and the Jackman Foundation, held at Kwansei Gakuin University, Nishinomiya, Japan, on June 23, 2019. Version of June 17. Check against delivery.
The 14th G20 summit, taking place in Osaka, Japan, on June 28–29, 2019, is a very important event. It launches the second decade of G20 summitry, since the first began in Washington DC in 2008. It is the first G20 summit hosted by Japan, the world’s third most economically powerful country. It brings the G20 back to an Asia emerging as the centre of the global economy, following the successful summits there in China in 2016, Australia in 2014 and South Korea in 2010. It takes place only seven months after the G20 summit in Argentina in late 2018.
Japan’s G20 summit has a larger significance for the UN system and global governance as a whole. For it is the first of three summits in a three month sequence, starting at Osaka in June, followed by the G7 Summit in Biarritz, France on August 24-26 and culminating at the UN in New York in the third week in September, where four UN summits will be held. They are on climate change, Universal Health Coverage (UHC) on September 23, financing for development, and the 2030 Agenda’s Sustainable Development Goals (SDGs). All are priorities at the Osaka Summit, where the three month momentum starts.
The Osaka Summit confronts the critical challenges of escalating trade, technology and security disputes, above all between a powerful United States and China, the climate crisis, rapid digitalisation, ageing populations, harms to human health, slowing and unbalanced economic growth, financial fragilities and geopolitical tensions in Asia and elsewhere. It comes with profound concerns about the ability of the major UN multilateral organizations and order from the 1940’s to cope, without the help of the systemically significant, intensely interconnected countries now assembled in the G20.
At Osaka, leaders will focus on Japan’s theme of promoting a free, open, inclusive and sustainable ‘human-centred future society’. Their priorities are free trade and innovation as engines for shared growth that reduces disparities, global standards for “data free flow with trust”, development through quality infrastructure and the (SDGs), international health, climate change, ocean marine litter, institutions for the digital economy, and an ageing society that impacts financial and social policies and inclusion. Other issues are safeguards for shared growth such as debt sustainability and transparency in low-income countries, global imbalances and market fragmentation in financial regulation and supervision. Technological innovation embraces international tax, financial innovation (including crypto-assets) and development implications. The standard issues of money laundering and terrorist and proliferation finance also appear. It is a broad agenda that covers all of the UN’s Agenda 2030 SDGs.
At Osaka, G20 leaders will produce a summit of broad, substantial success. The Osaka Summit will be at least as successful as the average of the 13 before (See Appendix A).
As Osaka G20 leaders will launch Prime Minister Abe’s signature “Osaka Track” to guide trade into the digital age, contain trade tensions and affirm that trade boosts growth and prosperity and should be rules-based. Climate change control and marine litter cleanup will be important achievements, with different members committing to their preferred approach on climate, to offset the escalating environmental shocks that display the vulnerability of all.
Leaders will also launch the G20’s innovative agenda on aging populations, advance human health and the broader SDG’s, by supporting UHC as a long term development ideal, boosting healthy nutrition, ongoing work on anti-microbial resistance, malaria, tuberculosis and polio and perhaps the International Health Regulations (IHR) and the World Health Organization (WHO) at the core. Also in store are advances in gender equality in the workplace, entrepreneurship and business leadership.
The G20’s strong success on tax will strengthen, extending into digital taxation. Ambitious principles for quality infrastructure and initiatives on anti-corruption will appear. Serious action against terrorism could again arise, in response to the growing attacks in Asia from global networks kill ever more citizens of G20 countries and beyond.
Propellers of Performance
The Experienced, Democratic Multilateralist Leaders
The first spur to Osaka’s success is the significant experience the G20 leaders bring (See Appendix B). The experienced leaders are led by its host and other veterans who believe in open trade, environmental protection, health, adjusting to aging populations and above all supporting the multilateral order based on the ideals and institutions of the UN.
Host Prime minister Shinzo Abe is a veteran of six G20 summits and hosted the G7’s successful Ise-Shima Summit in 2016. Germany’s Angela Merkel has been to all the 13 G20 summits since the start. Also experienced are India’s Narendra Modi who has been to five, and Canada’s Justin Trudeau to four. Jean-Claude Juncker, president of the European Commission, and Donald Tusk, president of the European Council are veterans too. Turkey’s Recip Tayyip Erdogan, Russia’s Vladimir Putin, China’s Xi Jinping with six summits and Saudi Arabia’s Crown Prince Mohammad Bin Salman are the only veterans whose commitment to democracy, openness and multilateralism is in doubt.
The newer leaders, dominated by democratic multilateralists, are Korea’s Moon Jae-in, the United Kingdom’s Theresa May, France’s Emmanuel Macron, South Africa’s Cyril Ramaphosa, Indonesia’s Joko Widodo, America’s Donald Trump, Italy’s Prime Minister Giuseppe Conte and Australia’s Scott Morrison. The invited newcomers are Brazil’s Jair Bolsonaro and Mexico’s Andrés Manuel López Obrador, who has declined to attend.
The Intense, Innovative Ministerial Meetings
These leaders will mobilise the work of the G20’s meetings of ministers responsible for agriculture on May 11–12; finance and central bank governors on June 8–9; trade and the digital economy on June 8–9; energy transitions and the global environment for sustainable growth on June 15–16 and finance and health together on the sidelines of the Osaka Summit itself.
They will guide those for labour and employment on September 1–2; health on October 19–20; foreign affairs on November 22–23; and tourism too.
These ministerial meeting have already produced a firm foundation for the Osaka leaders’ success.
The first meeting was for agriculture ministers in Niigata on May 11-12, 2019. It produced 15 commitments, including two referencing health, one climate change, and two gender. The 15 commitments were below the 29 produced by agriculture ministers in 2017, the 47 in 2016, the 16 in 2015, and the 29 in 2011.
The second ministerial was for finance ministers and central bank governors, held in Fukuoka on June 8-9, 2019. It produced 30 commitments across 10 subjects. This was a slightly higher total across a broader set of subjects than any of its pre-summit predecessors in the recent past. Fukuoka’s commitments shifted the focus to crime and corruption, debt transparency and sustainability, while continuing with tax. Digitalization appeared in several commitments.
This focus suggested that Osaka would be a security success, especially with the commitment: “We welcome the United Nations Security Council Resolution 2462, which stresses the essential role of the FATF in setting global standards for preventing and combating money laundering, terrorist financing and proliferation financing. We reiterate our strong commitments to step up efforts to fight these threats.” Another advance came on health, with the commitment “to the G20 Shared Understanding on the Importance of UHC Financing in Developing Countries.”
The highlight of the meeting was the agreement by all members including the US, to accept the new G20-OECD principles on digital taxation and advance them to produce a detailed regime with rules by 2020. As this agreement was widely expected to be endorsed by G20 leader at Osaka, its first serious success appeared.
The third ministerial was for trade ministers, in Tsubuka on June 8-9. It was uniquely combined with ministers for the digital economy. It produced 15 commitments, the highest the trade ministerial ever had (See Appendix C). The first commitment was: “We strive to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, to keep our markets open.” The second was: “We agree that action is necessary to improve the functioning of the WTO,” In all, three commitments dealt with the WTO and its reform.
The fourth ministerial was for energy transitions and the global environment, taking place in Karuizawa on June 15-16. It was the first time that G20 environment ministers met.
The institutional innovation reflected Japan’s approach to advance on climate change control by treating is as an issue of clean energy, which technology can produce. This emphasis on clean energy technology aligned well with the position of Donald Trump’s US and other big hydrocarbon producers such as Russia and Saudi Arabia.
On Tuesday, June 11, Japan adopted a long term strategy to reduce its greenhouse gas emissions to present at the ministerial, the UN and the Osaka Summit. Cast as part of Japan’s economic growth strategy, it emphasized decarbonisation, reducing coal and nuclear power, and developing technologies to recycle CO2 into fuel and building materials, store it under the ground and oceans and create CO2-free hydrogen energy. It would also develop and information disclosure system for the public to assess how much firms were controlling GGEs.
Marine litter was also a focus. Six Asian countries are the biggest polluters. They produce 60% of the world’s marine waste, led by China, Indonesia, the Philippines and Vietnam which generate half the plastics in the oceans. By country, China leads, with 1.32 to 3.53 million tons, followed by Indonesia, the Philippines and Vietnam. Japan at 20-60,000 tons is a vulnerable front line state, with its big cities all on the coastline geographically bearing the brunt of the marine litter its Asian neighbours emit.
At the ministerial, Japan proposed the creation of the world’s first international framework to compile data on plastic waste. It included the amount flowing into the oceans, and the way it is generated, flows from rivers into the ocean and circulates once there. Japan urged its G20 partners to annually report the amount of plastic waste they generate, and how much of it they recycle and incinerate. Japan will urge Southeast Asian and other countries to join.
Japan also considered proposing establishing an international organization to do this, having the UN create rules on marine litter, offering technical assistance to ASEAN countries for waste disposal, and creating a monitoring post for plastic garbage in the Pacific Ocean.
The first step of data gathering, on which all G20 countries agree, would be an important step. The only data currently available comes from estimates by university researchers, lacks details, and has estimates that range from 4.78 million to 12.75 million tons a year.
At the end of the ministerial, the US declined to pledge to reduce its greenhouse gas emissions in accordance with its Paris Agreement commitments.
Yet G20 ministers did agree to create the first international framework for members to voluntarily reduce their plastic pollution in the ocean. The ministers communique stated: “Marine litter, especially marine plastic litter and microplastics, is a matter requiring urgent action given its adverse impacts on marine ecosystems, livelihoods, and industries including fisheries, tourism, and shipping, and potentially on human health.”
Under the new framework, members would report their data, share solutions, adopt a life-cycle approach and start implementation. However US resistance prevailed over EU support for targets or concrete measures to phase out single use plastics. Still, Japan announced on the meeting’s first day that it would require its business to charge for disposable shopping bags by April 2020.
Energy ministers also discussed the recent attacks on oil tankers in the Gulf of Oman and their implications for energy security and the price of oil. Their communique referred to the attacks two days before on two tankers near the Strait of Hormuz, an incident that reignited concern over tensions in the Middle East and sent global oil prices jumping. It noted “recent developments highlighting concern about energy security,” and emphasized the importance of preventing energy supply disruptions and easing stable markets.
The fifth pre-summit ministerial is for finance and health, to be held on the margins of the summit itself. This unique combination seeks to have finance ministers understand the costs that poor health already and will impose and how cost-effective investments should be made and can be financed. A key component will be financing the extension of publicly- supported universal health coverage in developing countries over the longer term.
At Osaka itself, summit success will begin on its most difficult issues of “digital free flow with trust”, trade, and climate change, oceans and the environment and continue across a broad range of subjects (See Appendix D).
Data Free Flow with Trust
The first achievement will be a consensus on a work program, and perhaps principles and guidelines, on Abe’s signature initiative for launching an “Osaka Track” for “digital free flow with trust.” It will focus on business data. Given the General Data Protection Rule in Europe and cybersecurity threats including Russian hacks and spying, Japan and its G20 partners feel a need for rules to facilitate cross-border data flow for big data and AI.
The OECD ministerial has produced a set of principles and guidelines on the use of AI. At Osaka, China, Saudi Arabia, and Russia will adapt them and agree to the result, rather than have their host and their summit so visibly fail.
Trade and Investment
On trade and investment the U.S. approach will confront the other G20 members’ belief in international institutions and rules. Yet many members wish to respond to China’s subtle protectionism in many ways.
All declare their adherence to the rules but claim others are cheating. On state owned enterprises, steel subsidies, hacking, and the theft of intellectual property, the US claims that China is breaking the rules.
Japan has begun its bilateral negotiations with U.S. on autos, and on other matters of economic significance to Japan’s economy. When visiting Abe in Tokyo in late May, Trump agreed to defer his threatened protectionist trade actions against Japan until after the Japanese upper House of Councillors elections in July and thus after the Osaka Summit at the end of June.
All in the G20 system recalled that at Buenos Aires, the two high profile side events both produced trade liberalizing deals. These were the Trump-Trudeau meeting to sign the new NAFTA and the Trump-Xi dinner that produced a trade truce and new round of talks.
Just before Osaka, Trump produced a mini-repeat, by removing US tariffs on Canadian exports of aluminum and steel to help get the new NAFTA ratified. He then quickly backed off his threat to impose a 5% tariff on Mexico over its immigration policy.
Osaka could thus produce a repeat of Buenos Aires in modified or even enhanced form. It could contain a US trade truce with China and spur US trade liberalization with Japan.
Climate and Environment
On the third major subject, the “Global Commons” of climate, oceans and the environment, substantial practical advances will come.
On climate change, there will an agreement among all members but the United States to support the Paris Agreement, proceed to complete its implementing rulebook at the UNFCCC COP in Chile in December and improve the national determined voluntary contributions committed at the scheduled time at the COP in December 2020.
The US will repeated its declared intention to withdraw from the Paris Agreement in November 2020, while reaffirming its recognition of the need for a cleaner natural environment.
Climate finance will be advanced in a limited way. Korea seeks early down payments on replenishing the Green Fund. Others want the money to be devoted to global health.
The US will again stress clean energy as the key instrument. It will be supported by Japan, which is strongly motivated not to offend the US and has long highlighted the many clean technologies Japan has.
On the oceans and marine waste, leaders will endorse their G20 ministers agreement to create a voluntary international framework for members to reduce their ocean plastic pollution. Under it members would report their data and share solutions. Leaders might add some further steps.
Biodiversity will be addressed. China is hosting the next COP. But the U.S. is not a signatory to the UN Convention of Biodiversity so progress will be slight.
On resilience against natural disasters, G20 leaders will reinforce the risk insurance facilities that support small island development states and vulnerable African ones.
Beyond these modest advances on the three biggest issues, the Osaka Summit will make progress on a broad range of other subjects.
Tax will be a prominent one. The G20 will continue its successful work on base erosion and profit shifting (BEPS) and the automatic exchange of information (AEOI) by inducing more countries to adhere to the expanding OECD-G20 regime.
On digital taxation, a very controversial issue, leaders will produce a consensus on the principles for creating a revolutionary new regime by 2020. It would share the profits from digital firms among the countries where the value was created, by the proportion of the customers or users in them. It would represent a compromise between a reluctant India and South Africa, supported by Indonesia and Saudi Arabia, that wished to directly tax data export for the revenue required for development, and the more advanced economies in the G20. It would help forestall more of the the unilateral measures already taken by many members, including India, France, and the UK.
Health will see important progress too. Leaders will produce a vision of UHC, cast in development terms and as a long term goal. The US will not agree to instituting publicly funded UHC in the US.
Action against anti-microbial resistance AMR will be advanced. Work will continue on diseases affecting development world in particularly — malaria, TB and polio. The value of adhering to the IHRs could be endorsed, as could nutrition for early childhood development and disadvantaged rural communities. Japan will succeed in having the value of robotics for healthcare noted. There will be action against the spread of Ebola, in response to the spread of the deadly epidemic in the Congo into neighbouring Uganda in mid June.
On ageing, Osaka will set and agenda for future work. G20 leaders will affirm that ageing is a common problem with important impacts on productivity, fiscal policy, monetary policy, employment, health and health care costs and nutrition. It will note that some G20 members, led by Saudi Arabia, have a youth bulge and thus adopt a lifelong approach starting with early childhood nutrition.
Quality Infrastructure for Development
On quality infrastructure for development G20 leaders will set a common set of principles that will guide the practices of the multilateral development banks that they control. It will aim at smarter spending that does not aggravate the debt burden of developing countries, crowds in the private sector in a sensible way and supports several other SDG’s including those on climate change, the environment, health and trade.
Debt Sustainability and Transparency
On the related issue of debt sustainability and transparency of Low-Income Countries (LICs), leaders will agree on guidelines that will govern the work of the multilateral development banks (MDB’s), including the BRICS New Development Bank and the Asian Infrastructure Investment Bank.
On gender equality, G20 leaders will focus on women in the workplace, reaffirm their 2014 Brisbane commitment to close the gender gap by 25% by 2025 and emphasize women’s entrepreneurship and leadership. They will note the importance of the social context of child health and an infrastructure ecosystem to help women in the workforce be treated with respect and equality. Getting more women educated in science, technology, engineering and mathematics will be endorsed.
On anticorruption, leaders will press the remaining G20 members to join the anti-bribery convention. There will be no consensus on Canada’s desire to have the convention cover employees of state owned enterprises, and little on India’s desire for new extradition treaties for broader economic crimes such as under or over invoicing on customs declarations.
A broad range of security subjects will be addressed. These include terrorism, in response to the rising attacks in Asia and elsewhere. Nuclear proliferation will appear in private discussions about nearby North Korea and distant Iran. There could even be a discussion about democracy and human rights, as President Trump has said he would raise this issue in his discussion with president Xi.
Economics and Finance
Less real progress, if any, will come on the G20’s traditionally core economic and finance issues – global economic risks; global imbalances; and fiscal, monetary and exchange rate policy, reform of international financial instituions and financial regulation and supervision.
In all, the G20 Osaka Summit will seek to and succeed in making advances across most of the UN’s 2030 Agenda SDG’s.
Appendix A: G20 Summit Performance, 2008–2018
|Grade||Domestic political management||Deliberation||Direction setting||Decision making||Delivery||Development of global governance|
|Attendance||# compliments||% members complimented||# days||# documents||# words||Stability||Inclusion||Democracy||Liberty||# commitments||Compliance||# Assessed||# references||Spread||# references||Spread|
a London; b Pittsburgh; c Toronto; d Seoul.
N/A = not applicable. Only documents issued at a summit in the leaders’ name are included.
Grade is based on a scoring scheme created by John Kirton, as follows: A+ Extremely Strong, A Very Strong, A-Strong, B+ Significant, B Substantial, B- Solid, C Small, D Very Small, F Failure (including made things worse). available at http://www.g20.utoronto.ca/analysis/scoring.html.
Domestic political management: participation by G20 members and at least one representative from the European Union and excludes invited countries; compliments are references to full members in summit documents.
Deliberation: duration of the summit and the documents collectively released in the leaders’ name at the summit.
Direction setting: number of statements of fact, causation and rectitude relating directly to open democracy and individual liberty.
Decision making: number of commitments as identified by the G20 Research Group.
Delivery: scores are measured on a scale from −1 (no compliance) to +1 (full compliance, or fulfilment of goal set out in commitment). Figures are cumulative scores based on compliance reports. * = 2017 is an interim score and is excluded from the cumulative average.
Development of global governance: internal are references to G20 institutions in summit documents; external are references to institutions outside the G20; engagement groups are references to engagement groups. Spread indicates the number of different institutions mentioned. Brittaney Warren compiled 2018, 190123
Appendix B: Participating G20 Leaders’ Experience
Member Leader Previous Hosting
Japan Shinzo Abe 6 G20 2019
Germany Angela Merkel 13 G20 2017
China Xi Jinping 6 G20 2016
Canada Justin Trudeau 4 G20 2010
India Narendra Modi 5 G20 2022
Turkey Recip Tayyip Erdogan 12 G20 2015
Argentina Mauricio Macri 3 G20 2018
Saudi Arabia Mohammad Bin Salman 2 G20 2020
EU Commission Jean-Claude Junker 5
EU Council Donald Tusk 4
Korea Moon Jae-in 2 G20 2010
United Kingdom Theresa May 3 G20 2009
France Emmanuel Macron 2 G20 2011
South Africa Cyril Ramaphosa 1
Italy Giuseppe Conte 1
Australia Scott Morrison 1 G20 2014
Indonesia Jusuf Kalla 1
Brazil Jair Bolsonaro 0
Mexico Andrés Manuel López Obrador 0 G20 2012
Russia Vladimir Putin G20 2013
United States Donald Trump 2 G20 2008/9
IMF Christine Lagarde 7
World Bank David Malpass 0
Appendix C: G20 Trade Ministers’ Commitments, 2014–19
|Date||Total||Standstill Rollback||Services||Growth||Multilateral WTO||G20 Institutions||Governance||Development|
Tasnia Khan, G20 Research Group, September 15, 2018, Brittaney Warren, June 10, 2019
Appendix D: G20 Osaka Summit Agenda and Achievements
Data Free Flow with Trust
Launch “Osaka Track” of negotiations, under umbrella of WTO
Set US-China truce
Endorse need for trade-for growth, WTO reform
No anti-protectionist pledge or rollback
Initiate clean energy technology projects,
G19 promise to support & strengthen Paris commitments, complete rule book by 2020
Agree voluntary international regime for data gathering on oceans plastic
Implement marine litter clean-up projects
Endorse OECD-G20 new user-customer nexus principles, agree to set rules by 2020
BEPS & AEIO regime extended to more countries
A vision & strengthened financing for developing countries to achieve UHC by 2030
Advance work on AMR, malaria, TB polio
Nutrition for early childhood development
Broad agenda begun
25×25 commitment endorsed
Quality infrastructure for development
Debt Sustainability & Transparency
Align with tough new FATP rules on crypto exchanges, data transfer “travel rule”