‘G2’ SUMMIT

While Xi and Trump hog limelight at G20, Ramaphosa declares it a success for SA

By Peter Fabricius 1 July 2019
Caption
President Cyril Ramaphosa taking part in G20 talks in Osaka, Japan, on 29 June 2019. (Photo: GCIS)

President Cyril Ramaphosa would surely have been pleased by Donald Trump’s decision, announced at the summit, to ease restrictions on US companies doing business with the Chinese mobile tech giant, Huawei. The restrictions had knock-on effects on third-party countries like South Africa.

President Cyril Ramaphosa has hailed his visit to Japan for the G20 summit a success, though on some issues of major concern to South Africa, such as keeping global trade open and free, the summit leaders have been criticised for failing to take a firm enough stand.

Some analysts have dubbed the summit the “G2” because of all the media focus on the talks between US President Donald Trump and Chinese President Xi Jinping on ending their trade war.

Their agreement not to slap further trade tariffs on each other and to resume trade negotiations has been hailed by some analysts as a success of the summit, but it was obviously not a summit decision.

Trump continued to hog the limelight by meeting North Korean leader Kim Jong Un in the demilitarised zone between South and North Korea immediately after the G20 summit in Osaka, Japan.

Though he did not mention it in his statement, Ramaphosa would surely have been pleased by Trump’s decision announced at the summit, to ease restrictions on US companies doing business with the Chinese mobile tech giant Huawei.

According to the Sunday Times, SA’s four big telecommunications companies, MTN, Vodacom, Cell C and Telkom had urged Ramaphosa to intervene at the summit as Trump’s prior decision to blacklist Huawei would have had devastating repercussions on them because they rely on the company for rolling out 5G infrastructure. Trump’s sanctions would have hit third-party countries dealing with Huawei.

The paper reported that Ramaphosa had raised the Huawei issue in his meeting with Xi, but it’s not clear how that could have influenced Trump or how his decision to ease US sanctions on Huawei would affect the SA mobile service providers.

Ramaphosa welcomed the decisions by the G20 leaders of the world’s major economies to advance African development by reaffirming the commitment to the timely implementation of the global 2030 Agenda for Sustainable Development, and the Addis Ababa Action Agenda which sets out how achieving the Sustainable Development Goals will be financed.

Ramaphosa also appreciated the G20 summit’s allocation of enhanced roles for the World Bank, African Development Bank and International Monetary Fund in implementing the G20’s Compact with Africa.

The compact, agreed by the G20 at its summit in Germany two years ago, provides for individual African countries to be able to enter into compacts with G20 countries to help make the countries more attractive for foreign investment. Twelve African countries have signed compacts. South Africa is not one of them.

Nonetheless, Ramaphosa said the compact would contribute to the realisation of the African Union’s Agenda 2063, an ambitious development plan.

Ramaphosa also noted the Osaka summit’s announcement that future G20 summits would take stock of the G20’s progress in curbing illicit financial flows. It has been estimated that Africa loses at least $50-billion a year from such flows, mainly by multinational corporations registering themselves in offshore tax havens and so avoiding tax on the continent.

Ramaphosa was diplomatic about the G20’s lukewarm commitment to a free and open global trading system:

On trade and investment, the summit committed to work towards a free, fair, non-discriminatory, transparent, predictable, stable and open market environment.”

Before the summit Ramaphosa and his ministers and officials of trade and international relations had all stressed the importance of the G20 leaders affirming the centrality of the World Trade Organisation-centred, rules-based global trading system.

Ramaphosa had said at a summit of Brics leaders on the margins of the G20 summit that:

The G20 needs to show leadership. In the light of the current climate of global trade tensions, rising protectionism and unilateral action, it should reaffirm the centrality of the rules-based transparent, non-discriminatory, open and inclusive, multilateral trading system as embodied in the WTO which promotes a predictable trade environment and recognises the importance of the development dimension.”

International Relations and Cooperation Minister Naledi Pandor had said “the unilateral superimposition of tariffs” by some countries would hurt developing countries hardest, especially in Africa which was beginning to achieve economic growth, to open up its economies and to be productive. A trade war would take the continent backwards.

Trade and Industry Minister Ebrahim Patel said a trade war could potentially be very damaging to SA’s growth and jobs:

About a third of our GDP is made up of exports. Thousands and thousands if not millions of South African jobs are tied up with the export of goods and services.”

Anil Sooklal, deputy director for the Middle East and Far East in the department of international relations and cooperation, told journalists before the summit that the trade war between the US and China, in particular, increased US tariffs on steel and aluminium imports – which the Trump administration also slapped on SA and other countries – had already cost South Africa between 8,000 and 10,000 jobs.

After the summit Pandor, like Ramaphosa, was positive, telling Daily Maverick that while there had been a serious atmosphere and seeming tension at times on the “omnipresent” US-China trade impasse, “all leaders spoke with some firmness on a rules-based fair and equitable trade regime and a world that respects multilateralism”.

Analysts differed on this point. John Kirton, head of the University of Toronto’s G20 Research Group welcomed this commitment by the G20 leaders to “trade liberation and the rules-based multilateral system and bilateral and plurilateral economic partnership agreement at its core.

G20 leaders affirmed their belief that open international trade is a source of economic growth, that it should be rules-based and that the WTO should be urgently reformed.”

Kirton said this affirmation was backed by Xi’s promise to all his G20 colleagues that he would open the Chinese economy, take in more imports and provide foreign direct investors with a level playing field with the domestic Chinese ones.

The “icing on the free trade cake” for Kirton was Trump and Xi’s declaration of a truce in their escalating trade war.

Kirton was not bothered that “the G20’s traditional anti-protectionist pledge was not reproduced verbatim” because similar sentiments had clearly been expressed in other words.

Other analysts were less indulgent. Richard Haas, president of the Council on Foreign Relations in the US, noting that the G20 leaders had sidestepped trade protectionism in their communiqué, complained that “the G20 is becoming like Davos; the formal gathering counts for little and what matters are side meetings.

This is a real loss, as the G20 was meant to provide a mechanism to manage globalisation in ways the UN Security Council and the G7/G8 could not.”

Ramaphosa, meanwhile, welcomed the decision by the G20 leaders on digitilisation, where they agreed that to harness the full potential of data, there needed to be data flow with trust, to be enabled through international policy discussions on the sharing of good practices and regulatory frameworks.

Additionally, the G20 will implement the anti-corruption action plan for 2019-2021, which strengthens synergies among related international instruments. There is also a strong will among the majority of the member countries to pursue the 2015 Paris Climate Agreement’s goals of dealing with climate change.”

The major exception to this commitment to the Paris Climate agreement was the US, as the G20 communique noted.

On the sidelines of the summit, Ramaphosa convened the standing trilateral meeting with the African Union chair, President Abdel Fattah el-Sisi of Egypt, and the Nepad chair, President Macky Sall of Senegal, to consolidate Africa’s position around the summit’s agenda.

Ramaphosa also participated in the China-Africa leaders’ meeting with Xi, El-Sisi, Sall and the UN secretary-general, Antonio Guterres, as well as in the standing informal Brics leaders’ meeting with Xi, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Brazilian President Jair Bolsonaro.

Ramaphosa also had one-on-one meetings with Putin, Xi, Japanese Prime Minister Shinzo Abe, Saudi Crown Prince Mohammed bin Salman and the president of the World Bank, David Malpass.

The Sunday Times quoted Ramaphosa’s spokeswoman Khusela Diko as saying Putin had reiterated that Russia was ready to help SA with its nuclear programme and that Ramaphosa had replied that SA would roll out nuclear power as part of its overall power mix at a pace and scale it could afford.

Ramaphosa ended his Japanese tour by punting hard for investment at a round-table for Japanese and South African business leaders. DM

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