News analysis: G20 summit in Osaka faces crucial issues

Source: Xinhua| 2019-06-27 22:20:45|Editor: Liangyu
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by Alessandra Cardone

ROME, June 26 (Xinhua) -- More than any other occasion in recent years, the Group of 20 (G20) summit set to kick off in the Japanese city of Osaka later this week would face crucial issues amid rising global tensions, Italian experts said, expecting no comprehensive solution to these issues.

"In terms of priority issues, international taxation is expected to rank high in the summit agenda," said Antonio Villafranca, co-head of Europe and Global Governance Center at the Italian Institute for International Political Studies, an independent think tank on international issues.

"The finance ministers of the G20 have already partially addressed it in their meeting earlier this month, and it seems some steps forward were made," the expert told Xinhua.

International taxation on multinational companies was indeed among the official priorities of the G20 finance track this year.

According to the final communique issued by the G20 finance ministers and central bank governors in Fukuoka on June 8-9, the group aims to "develop a consensus solution to tax challenges arising from the digitalization of economy."

Possible developments on this point would especially concern global tech giants, which are accused of exploiting loopholes in current corporate tax systems by choosing low-tax countries as bases of their business, although they provide services to global customers and benefit from it.

Trade was expected to be the other big priority of the summit. Yet, analysts here placed no high expectations on this.

Global economy was indeed the top theme in the agenda set by the Japanese government, the host of the G20 this year. And global trade was listed as No. 2.

"The current developments surrounding international trade are negatively affecting the prospects of global economy and trade," Japan said ahead of the summit in Osaka.

"The G20 members, covering more than 80 percent of global GDP (gross domestic product), have responsibility for resolving this situation," said the host country.

However, the ongoing tariff tensions between United States and China -- the two biggest economies in the world -- would cast a shadow on the talks, according to experts.

"On free trade, it is hard to imagine crucial steps forward can be made at the summit ... And, if some progresses will be achieved, they would indeed result from a possible face-to-face between the two countries' leaders," said Villafranca.

Chinese and U.S. leaders were poised to meet on the sidelines of the summit to discuss the related issues, and the news of their meeting has aroused hopes in a possibly return to a more consensual approach to global trade.

In this perspective, China has repeatedly reiterated its position in favor of multilateralism, appealing for the G20 Osaka summit to send a strong signal against unilateralism.

"In my opinion, a full solution to the tariff war is not to be expected at this G20 summit, although it will be the central topic," Lucio Poma, chief analyst of Bologna-based Nomisma think tank, told Xinhua.

The G20 alone would not be able to provide a comprehensive solution to these issues, although it might prove a useful chance for the various players to achieve a better understanding.

Both experts hoped that the G20 in Osaka was expected to discuss climate change although they said it would not be an easy task as well, considering the existing rift between the U.S. administration on the one side, and European countries, China, and Japan on the other, after Washington stepped back from the Paris Climate Agreement.

"Especially on climate change, I think the G20 Japanese Presidency's primary goal is to have the United States 'on board', meaning that they will try hard to avoid a 19-plus-1 final declaration," Villafranca noted.

In order to reach a consensus declaration, however, leaders would have to compromise.

"Among analysts focused on G20s, there are therefore indications that the Osaka final communique might avoid to address climate change in deep, and would not include any direct reference to the Paris Agreement," he said.

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