Ahead of the Group of 20 (G20) summit in Japan, the international community is calling for joint efforts by major economies to help maintain global growth amid rising uncertainties.
THREATS TO GLOBAL GROWTH
The bloc of major economies will soon be in the Japanese city of Osaka as the global economy is increasingly threatened by protectionism.
In the name of protecting domestic industries, Washington has slapped steep tariffs on billions of U.S. dollars' worth of products from its partners, heightening trade tensions worldwide and rocking the foundation of the multilateral trading system.
"Today uncertainty is not so much about integration but about disintegration. Multilateralism and free trade have come under pressure, for example, with international trade conflicts," said Burkhard Balz, a member of the executive board of Deutsche Bundesbank.
Moving towards isolationism and unilateralism damages the G20 spirit significantly, said Lee Hee-ok, a professor of political science at Sungkyunkwan University in Seoul.
Finance ministers from the G20 economies on June 9 issued a joint statement, saying global growth "remains low and risks remain tilted to the downside" and listing trade tensions as the key factor.
The latest World Trade Outlook Indicator reading of 96.3 remains at the weakest level since 2010, signalling continued falling trade growth in the first half of 2019, said the World Trade Organization (WTO).
According to a key UN report released earlier in June, global foreign direct investment (FDI) slid to 1.3 trillion dollars in 2018, in its third straight annual decline.
Factors such as escalating trade tensions "risk continuing to weigh on FDI in 2019 and beyond," said Mukhisa Kituyi, secretary-general of the UN Conference on Trade and Development.
"Economic prospects are now weaker in nearly all G20 countries than previously anticipated," said the Organization for Economic Cooperation and Development (OECD) in its recent interim economic outlook.
Besides, there are other major risks such as geopolitical tensions and climate crises.
Kituyi said the main drag on FDI in Europe is the "negative pull of Brexit in Britain," which has created considerable uncertainty.
In its latest monthly report, the U.S. Energy Information Administration cut its 2019 world oil demand growth forecast by 0.2 million barrels per day (bpd) to 1.2 million bpd, amid escalating tensions in the Middle East.
"According to the World Bank, air pollution costs societies more than 5 trillion dollars every year," said Joyce Msuya, deputy executive director of UN Environment.
"This meeting is coming at a time which is seeing perhaps the most significant shift in the global environment since the Cold War," said Australian Treasurer Josh Frydenberg.
NEED FOR CONSENSUS
What concerns the international community the most is whether G20 economies can show solidarity at the upcoming summit in tackling the risks of global economic downturn.
Although many G20 economies have repeatedly called for coordination of economic policies over the past few years, the bloc is still divided on certain thorny issues, such as rising protectionism and climate change.
For example, the G20 ministerial meeting earlier in June failed to include the part of opposing trade protectionism in the joint statement due to objections from the U.S. side.
"The United States ... lost interest in cooperating in a multilateral format and actually stalled the process of reforming the system of global governance," said Professor Yana Leksyutina of St. Petersburg State University.
Besides, the UN climate change conference held last year in Poland also witnessed some countries voicing opposition to including the draft text in the final outcome document.
Participating countries of the G20 summit should act positively to reach some agreement "which would be beneficial to people across the world," Qian Meijun, professor of the College of Business and Economics in the Australian National University, told Xinhua.
OECD Chief Economist Laurence Boone suggested "governments should coordinate policy actions to avoid a further downturn."
In an interview with Xinhua, Atsushi Sunami, vice president at the National Graduate Institute for Policy Studies in Tokyo, called on all to understand the real impact of trade tensions, and end the trade frictions as soon as possible.
There will not be any winner, Takakage Fujita, a political analyst, told Xinhua.
He said the economic and trade friction provoked by the United States hurts not only China, but also U.S. farmers as well as U.S. industries, which have already issued warnings against such reckless acts of the U.S. government.
Economy has no borders, Tadashi Yanai, founder of the famous Japanese clothing brand Uniqlo, told Xinhua, adding he hopes all could understand that the world is closely linked, and people of all countries look forward to a peaceful and stable life.
CALL FOR IMMEDIATE ACTIONS
Many hope that G20 economies can take concrete actions such as returning to the negotiating table to alleviate trade tensions.
Fujita suggested major economies like the United States should, from the perspective of being conducive to world peace and development, return to talks, and solve issues through rational negotiation and consultation.
Talks are the only right choice, he said.
In his telephone conversation with U.S. President Donald Trump on June 18, Chinese President Xi Jinping said that both countries gain from cooperation and lose from confrontation, adding that the two sides should, in accordance with the consensus he has reached with Trump, push forward the China-U.S. relationship featuring coordination, cooperation and stability on the basis of mutual respect and mutual benefit.
As the world's two biggest economies, China and the United States should jointly play a leading role in pushing for positive outcomes at the G20 Osaka summit, so as to inject confidence and vitality into the global market, added Xi.
Meanwhile, the international community also urged G20 economies to develop open and fair platforms like the China-proposed Belt and Road Initiative (BRI) and promote the reforms of international organizations, to better defend the multilateral trading order.
The BRI really supports the growth of the global economy, said Sunami.
It is a more open and multilateral idea that goes against unilateralism and isolationism, said Lee.
Developing countries should take part in the effort to strengthen the role of the UN in world affairs and reform backbone institutions such as the International Monetary Fund, the World Bank and the WTO, said Leksyutina.
During the G20 summit in Argentina last year, many leaders called for a WTO reform. And so did the joint statement issued after the foregoing G20 ministerial meeting.
It is important for G20 leaders to come up with more transparent rules, especially concerning trade tensions and the digital economy, said Sunami.
They need to talk about the WTO and other world organizations, and whether the WTO can play a more active role in creating a fair environment for everybody to agree on, he said.
"Leaders must do something more than repeat the call. It is imperative that we see action," Director-General of the WTO Roberto Azevedo said.
He particularly called on joint efforts to reform the WTO's dispute settlement system to avert an acute Appellate Body crisis.
Chen Yulu, deputy governor of the People's Bank of China, also suggested carrying out an IMF quota reform to objectively reflect the relative positions of member countries in the global economy, and strengthen the voice of emerging market economies.
"How the major central banks should react to the most recent developments on the market and the world economy, including interest rates, quantitative easing as well as currencies, is another issue," said Dawie Roodt, chief economist at African financial services company Efficient Group.
Experts also expect the upcoming summit to help find solutions to climate change.
According to Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research, G20 leaders should consider carbon pricing and the development of new low-carbon technologies to cut emissions, and integrating their carbon markets to push forward ongoing international negotiations.
(Xinhua reporters Yoo Seungki in Seoul, Ye Shan, Guo Wei, Liu Chunyan, Ma Caoran and Peng Chun in Tokyo, Zodidi Mhlana in Johannesburg and Shi Hao in Moscow also contributed to the story.)
