G20 takeways for business
Against all expectations, the Indonesian G20 Presidency was able to secure a communique from this weeks' leaders' summit. No small feat in itself given the prevailing geopolitical context.
Here are three key takeaways from a business perspective:
- A strong signal on environmental cooperation
G20 leaders succeeded where their environmental ministers had failed just days earlier in agreeing to the common goal of limiting global temperature increases to 1.5 degrees Celsius. This commitment sent a strong signal to the ongoing COP27 negotiations — which had previously seen several governments (including three members of the G20) advocating for weaker language on climate targets given prevailing economic conditions.
The communique also makes clear the G20’s intent to secure “ambitious” targets on nature preservation at the upcoming “COP15” summit under the Convention on Biological Diversity.
- Warm words for the WTO system
The communique arguably contains the strongest language on the G20’s support for the multilateral trading system since 2016. A big step forward in tone, coupled with a clear commitment — mirroring an early pledge from the G7 — to reform the WTO system by the time of its next ministerial conference (expected end-2023). It’s now very much incumbent on us to ensure that this positive political message translates into real momentum in WTO committee rooms in Geneva.
- Continued complacency on emerging markets
Despite leaders recognising the severe debt and fiscal strains threatening emerging markets, the Bali summit failed to deliver any new mechanisms to support developing world in the context of the multifaceted crisis sparked by the war in Ukraine.
ICC will continue to push for fresh thinking on this agenda with the incoming Indian Presidency — not least given the very clear downsides to trade and global value chains of the G20’s complacency regarding the precarious fiscal position of a growing number of emerging markets.