The results of the G20 forum are positive, but limited

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The meeting of the 20 largest economies in the world in the city of Osaka ended with optimism, but with few tangible agreements between the parties

Gathered in Osaka, Japan, the 20 largest economies in the world, responsible for 85% of world GDP, used the weekend to deliberate about the main economic and political problems of today. From the outset, the trade war between the United States and China seemed to be key, since the changes it has forced in world trade concern the main industrial powers.

Leer en español: Los resultados del G20 son positivos, pero limitados

Even though sustainable development was on the agenda as the main theme of the summit, a new meeting between Donald Trump and Xi Jinping – after the negotiations to end the trade war ended in May – turned out to monopolize the headlines.

Who participated?

The members of the G20, 19 of the largest national economies in the world and the European Union, as well as several countries and invited international organizations, were cited at the International Exhibition Center in the city of Osaka.

From Latin America attended the Argentine President Mauricio Macri, the Brazilian Jair Bolsonaro, the Secretary of Foreign Affairs of Mexico Marcelo Ebrard and, as special guest, the President of Chile, Sebastián Piñera, who is also currently leading APEC (Asia -Pacific Economic Cooperation).

From Europe not only Donald Tusk and Jean-Claude Juncker on behalf of the European Union participated, but also the presidents of the largest economies in the region: Emmanuel Macron of France, Angela Merkel of Germany, Theresa May of the United Kingdom and Vladimir Putin of Russia, being perhaps the most important.

Also, the newly inaugurated South African President Cyril Ramaphosa was there, as well as the Saudi crown prince, Mohammad bin Salman. The meeting, which lasted from June 28 to 29, was hosted by the Prime Minister of Japan, Shinzo Abe.

The trade war, a shared concern

Many countries were concerned about the effects that the trade war between China and the United States could bring them. For the hosts, the war represents a problem, since it has weakened its industrial production, bringing it to its lowest point in the last three months.

South Korea echoed Japan's concerns, because its industry has slowed down to the highest rate in four months.

Read also: Can commercial war lead to a new global recession?

In his speech, Chilean President Sebastián Piñera also took the opportunity to draw attention to the damage that the trade war does to international trade. "Growing protectionism weakens the world economy, trade, investments, and hurts all countries," said Piñera.

A truce that brings optimism

With so much emphasis on the issue, Donald Trump and Xi Jinping were given the task of discussing the development of the trade war, agreeing a truce and a resumption of trade negotiations between their two countries.

The truce, proposed by Trump, includes the guarantee that no new tariffs will be introduced on products from China, as well as a relaxation of the sanctions and trade restrictions imposed on the Huawei Chinese technology company. According to Trump, China would also have agreed to an unspecified purchase of US agricultural products as part of the deal.

The international markets reacted well to the news of the commercial truce. The Shanghai Composite Index, which tries to measure the joint performance of major Chinese companies in the Shanghai stock exchange, rose 1.88% after the news, and the similar but lower Shenzen Index rose 2.93%.

On the US stock markets, the S & P 500 index, which measures the combined performance of the 500 largest companies in the New York Stock Exchange, rose 1% to a new historical peak. Other indices such as the DOW and the Nasdaq also rose by 0.9% and 1.7% respectively.

However, the optimism is conditioned, since the current tariffs continue in operation and there are no guarantees for the successful development of the new negotiations between China and the United States.

Unasur celebrates an achievement in the G20

Since at the G20 summit there were Macri from Argentina and Bolsonaro from Brazil, the opportunity could be used to deepen the external relations of regional organizations such as Mercosur.

In the framework of the summit, Macri and Boslonaro signed a commercial agreement signed between the European Union and Mercosur.

"This is the most important agreement we have signed in our history. It took 20 years, but we managed to reach a point in time in which we found many leaders with good will to transform this into a reality," announced Macri as president pro tempore of Mercosur.

LatinAmerican Post | Pedro Bernal
Translated from "Los resultados del G20 son positivos, pero limitados"