Subplots of the G20 Hamburg Summit
German Chancellor Angela Merkel, the rotating President of the G20, is hosting the next meeting in the city of Hamburg, on the mouth of the Elbe River near the North Sea Coast.The Group of Twenty — known as G20 — is an unaccountable and powerful organisation that is the closest thing on earth to a true world government.
G20 refers to its twenty member countries.
They are a mixture of what were once the world’s seven largest economies, known as the G7, consisting of the United States, Canada, France, Germany, the UK, Italy and Japan, and some fast-growing, newly emerging economies such as Brazil, China, South Korea, Mexico, India and Indonesia.
In includes other countries such as Russia and Saudi Arabia because of their natural resources or for geopolitical reasons.
The G20 operates at many levels.
Several times each year their finance ministers and central bank heads meet to discuss technical issues and try to reach consensus on specific goals.
The most important meetings, however, are the leaders’ summits. They are attended by presidents, prime ministers and kings, which meet to discuss global financial issues.
It is at these leaders’ summits, both in the formal sessions and informally on the sidelines, that the actual deals shaping the global financial system are made.
In recent years, G20 summits have focused less on financial crises and more on the one world agenda of the global elite.
This elite agenda includes world taxation, climate change, terrorism, anti-money laundering and other aspects of globalised governance.
Today, financial risk is once again coming to the fore as global growth continues to slow. Nationalist leaders such as Donald Trump, Vladimir Putin, and Theresa May have emerged to challenge the globalist agenda.
This puts more stress on the cohesiveness of the G20 process.
Financial risk, anti-globalism, immigration, and threats from terrorism will be on full display at this next G20 leaders’ summit.
There will also be three key sub-plots happening off the main stage to watch closely.
I shall discuss the first two today, and the third tomorrow.
The most important of these private meetings involve Trump and Putin, Macron and Merkel, and the BRICS.
Key meeting #1: The United States
By far, the most important encounter at the Hamburg G20 Summit will be the first face-to-face meeting between Donald Trump and Vladimir Putin.
Despite the avalanche of allegations of ‘collusion’ between Trump and Putin to rig the 2016 US presidential election (an allegation for which there is zero evidence)…and the presumed sympathies between the two leaders on policies involving ISIS and terrorism…they have never met and have had only limited telephonic contact.
The bilateral agenda of the two leaders could not be more urgent.
Trump wants to build bridges with Russia in order to prepare for a coming confrontation with China.
Russia, China and the US are the only three superpowers in the world.
Classic balance-of-power politics dictates that if you are going to confront one power in a three-power game, it is essential to have an alliance with the other power, or at least keep it neutral.
The US needs a neutral or friendly Russia before it confronts China on trade, currency manipulation, North Korea and the South China Sea.
Unfortunately, Trump’s efforts at opening dialogue with Russia were handled in an amateurish way by Kushner and Flynn.
Both lied about their contacts with the Russians, which fed the collusion narrative. This led to investigations, and Trump’s clumsy efforts to head off those investigations have now led to allegations of obstruction of justice.
Despite the dysfunction in the Trump White House and the media circus in Washington DC, the reasons for normalising relations with Russia are no less urgent than when they were first pursued by Trump.
The G20 summit will be a chance for Trump to reinvigorate the US-Russia dialogue outside the context of the Beltway feeding frenzy. Putin understands this and he will be an eager interlocutor.
Trump’s defence, diplomatic and national security team of James Mattis, Rex Tillerson, and H. R. McMaster are far more capable than Kushner and Flynn, and will assist in Trump’s preparation for the Putin dialogue.
The Trump-Putin dialogue in Hamburg will be the most important diplomatic event of 2017.
Watch closely for both public statements and leaks about the substance of the dialogue.
This information will contain important clues about the prospects for war with North Korea, relief from economic sanctions in Europe, and the endgame for ISIS.
Key meeting #2: The BRICS
Another important highlight of recent G20 summits is the informal meeting of the BRICS on the sidelines. Hamburg will continue this tradition.
BRICS is an acronym for its member nations: Brazil, Russia, India, China, and South Africa.
These nations include the four largest emerging markets economies, the two most populous nations on earth (China and India), and four of the six largest nations by landmass (Russia, China, Brazil, and India). The BRICS are the main counterpoint to the G7 inside the G20.
The BRICS have their own summit meetings and institutions, including a well-funded development bank.
Yet, the G20 summit is a convenient time for the BRICS leaders to meet in person given the difficult logistics of coordinating so many leaders’ schedules.
The BRICS agenda will be lighter at this G20 summit than in years past.
This is partly because the currency wars are temporarily quiet, and the BRICS development agenda has been eclipsed to some extent by China’s ‘One Belt, One Road’ multi-trillion dollar infrastructure initiative in central and south Asia.
Still, the BRICS as a group continue to be interested in ways to bypass the US dollar in global payments systems.
By strengthening and expanding non-dollar payments systems, the BRICS make themselves less vulnerable to US economic sanctions, which mainly operate through bank channels and dollar accounts.
Gold is also an important topic among the BRICS.
Russia, China and South Africa are three of the world’s largest gold producers, while Russia, China, and India are among the world’s largest consumers of gold.
Watching the BRICS ‘sideline summit’ at G20 for can provide information about gold, non-dollar payments, and broader efforts to diminish the international role of the US dollar.
for The Daily Reckoning Australia