Multilateralism: In search of beautiful harmony

Jean-Claude Juncker, President, European Commission

This year’s G20 summit in Osaka will be the first ever held in Japan. And there could not be a more fitting time and place for the leaders of the world’s largest economies to meet.

I say that because Osaka, as a merchant city, is a hub for trade and industry and a gateway to Japan and the rest of Asia. Over the centuries, it has constantly reinvented itself to adapt to economic transitions and the modern world, providing livelihoods for people locally and around the world.

The meeting also comes just weeks after Japan entered the new imperial era of Reiwa, loosely translated as ‘beautiful harmony’. Admittedly, this would not be the first expression I would choose to describe recent G20 summits, but it is a reminder of why the group was formed and what it should focus on. The need for the world’s major powers to work together for the good of all is more important than ever.

This need has become more pronounced. We share many of the same challenges and we are undergoing many of the same transitions. Climate change, sustainable development, migration, terrorism, trade, digital taxation, cybersecurity and global economic growth – these issues cut across boundaries, societies and economies. They require a concerted, comprehensive response within the multilateral rules-based system.

But just as the need becomes more acute, so do the challenges to this system. Some of our oldest partners are going down new paths on their own. New powers are emerging. Advocates for protectionist, nationalist policies have gained traction across the world, including in some G20 members.

The European Union will withstand these. Multilateralism is in Europe’s DNA. It is the very foundation of our union. By being united and working together, we make ourselves individually and collectively stronger. Our voice in the world carries further and we are able to do more than we would alone. This is why the European Union will always fight to preserve the multilateral system, with the United Nations at its core. This is the message I will deliver to leaders in Osaka.

We believe in an open, fair economy because it delivers jobs and prosperity. Across Europe 36 million jobs are supported by exports, two-thirds more than in 2000. EU exports support almost 20 million jobs outside the European Union. New trade agreements have been concluded with 15 new partners under the Commission that I have had the honour of presiding over since 2014 – and there are more to come, with Mexico, Mercosur, Australia, New Zealand, Chile and Tunisia.

I will be particularly proud to be in Osaka in June because I will be able to see first-hand the impact of the new EU-Japan Economic Partnership Agreement. The agreement, which came into force this year, has created the largest open trade area in the world, accounting for a third of global gross domestic product. It will cut €1 billion worth of tariffs for European companies while upholding our shared values and ensuring the highest environmental and social standards. This shows the power of global economic cooperation and why we will always fight for the rules-based system.

But we also know that we must update that system. This will form the major part of our discussions in Osaka. We are working closely with the United States, Japan and others on reforming the World Trade Organization. This is about creating a level-playing field for all, ensuring that the rules of the game are fit for the modern, digital economy. We want to tackle unfair industrial subsidies and the forced transfer of technology. These are issues that all G20 members want to  address but they can only be done together.

The same goes for fairness in the digital world. On average, digital businesses face an effective tax rate of 9.5%, compared to 23.2% for traditional business models. Here again, we have to update the global approach. We have put forward our proposals in Europe. We want to work, through the G20 and the Organisation for Economic Co-operation and

Development, to find global solutions. On climate change, Europe is showing ambition and leadership, delivering on the goals we set ourselves in the Paris Agreement and supporting others to do the same.

We can do more when we work together. As a group, the G20 may still be searching for its beautiful harmony but there remains plenty it can do together to tackle issues of common interest.

Yes, there are legitimate concerns by those most affected by the changes in our societies and economies. And there is clearly a need to update the rules we all abide by. It is our duty to address those in Osaka and beyond.

But we should not forget how far we have come or how much we have achieved. Let us not undo the progress we have made. Multilateralism has underpinned global growth for decades, and lifted millions out of poverty. Globalisation has fundamentally changed how the world economy works. We live in one of the most peaceful periods of world history. We Europeans know the value of this more than most. And we will continue fighting for it.