Turbulent Times for the World Economy – B20 Needed Now More Than Ever

Stormy-Annika Mildner © BDI

Argentina has taken over the G20 chair at a difficult time. The consensus for open, rules-based world markets appears to be crumbling and international organisations like the WTO are coming under fire. That’s why it is all the more important that business has a strong voice, according to foreign economic policy expert Stormy-Annika Mildner. She emphasizes that the role of the Business 20 (B20) is more important today than ever.

What is the role of the B20?

Since 2010, the Business 20 (B20) has been the official G20 dialogue with the global business community. The mission of the B20 is to support the G20 through consolidated representation of interests, expertise, and concrete policy proposals. The leadership rotates every year together with the G20 presidency. 2016/17 the leading German business federations – the BDI, the Confederation of German Employers’ Associations, and the Association of German Chambers of Commerce and Industry – were responsible for the organisation of the German B20. From industry to the finance sector, from small to big companies – the B20 speaks with one voice for the business community of the G20 countries. More than 700 representatives of companies and federations take part in the B20 each year. Its recommendations are agreed on by consensus among the B20 members. 

What are the topics on the B20 agenda?

The topics discussed in each B20 cycle are both determined by the interests of the G20 business community and the topics on the G20 agenda. The motto of the current B20 cycle, B20 Argentina, is “Building Consensus for Fair and Sustainable Development”. Alongside the familiar areas in which the G20 is always active – such as the global economy, trade and international financial – each G20 Presidency sets its own priorities. For its part, G20 Argentina has opted to prioritize three topics: the future of labour, infrastructure for development, and sustainable food systems. B20 Argentina is continuing the work of B20 Germany even though it has its own focus. The taskforces are focused on the following topics: trade and investment; digital economy and industry 4.0; energy, resource efficiency und sustainability (ERES); financing growth and infrastructure; SMEs Development; integrity and compliance; sustainable food systems; and employment and education.

Can the B20 achieve anything?

The need for political action in the traditional B20 areas of trade, investment and financial markets is enormous. That said, there is also huge pressure to act on new issues such as digitisation, climate change, and health care. How difficult it is to reach international consensus on these issues was evident at the G20 summit in Hamburg in early July 2017.

For this reason, the fact that business representatives from throughout the G20 engage in regular exchanges, consolidate their interests and promote joint positions has value in and of itself. This is how the B20 contributes to understanding and trust in the international community. Often it is only through such intensive exchanges that we realise our interests and goals are more similar than we thought. For the G20, it is important to have a consolidated business position rather than a cacophony of voices from individual countries. Moreover, the G20 depends on the knowledge and practical experience of business to identify the most promising policy options.

Most recommendations of the B20 are reflected in the decision-making of the G20. The International Chamber of Commerce (ICC) carries out analyses each year in this area. Furthermore, B20 recommendations are often explicitly mentioned in G20 communiqués. We have the impression that the B20 contributed, for example, to the G20’s current focus on digital trade as well as small and medium-sized enterprises, among many other topics.

Do sparks sometimes fly at the B20?

The work of the B20 cumulates in the B20 summit. It is at this venue that the B20 presents its declarations to the G20. Up to that point, the B20 works under enormous pressure to develop concrete policy recommendations on the various G20 topics.

It goes without saying that – just like in the G20 – negotiations are sometimes difficult and discussions heated. This is a good thing because the B20 is supposed to contribute to identifying common as well as diverging interests, on the one hand, and come up with creative solutions and compromises, on the other. However, discussions are always conducted in an amiable manner. After all, we share the same goals: sustainable, inclusive and dynamic growth in a world that is becoming more and more integrated.

Does the world really need the G20?

If the G20 did not exist today, it would have to be invented. From rampant protectionism to pandemics and climate change – the global economy is facing a multitude of challenges. No government alone can tackle these challenges. The G20 plays an important role in shaping the agenda of international economic and regulatory policy. The G20 helps further develop the rules for the global economy. It is true that the G20 has no permanent secretariat like those of the International Monetary Fund or the World Trade Organisation and, in contrast with those two organisations, cannot take decisions that are binding under international law. Nonetheless, it has shown in times of crisis that it has the necessary flexibility to establish guiding principles for global regulatory policy precisely because it is not dependent on rigid structures.

How successful was the German G20 Presidency?

Naturally, we had higher hopes for the G20 summit. But given the difficult negotiating environment, the G20 Communiqué is definitely to be regarded as a success, even though little more than the status quo was achieved in many areas.

Indeed, it was thanks to the diplomatic skills of the German government that we were able to reach a compromise at all on many areas. We are very relieved that after lengthy controversies, the G20 members were able to agree on a joint declaration on trade. If they had failed to do so, it would have been an enormous blow for both the international trading system and the G20. The G20 has committed itself to open markets. Another good thing is that the G20 members agreed to fight protectionism. However, the G20 has missed the opportunity to agree on a modern trade agenda that is fit for the 21st century.

With regards to climate and energy, all G20 members – with the exception of the United States – agreed that the Paris Climate Agreement should be implemented without delay. That the U.S. call for new negotiations was clearly rejected by the other G20 members, which described the treaty as “irreversible”, is to be welcomed. At the same time, it is highly regrettable that no mechanism for carbon pricing has been established. A process leading step by step to an international carbon price signal would create a more global level-playing-field.

What would you like to see the Argentine B20 achieve?

I hope that the B20 will make a contribution – as it has done in the past – to the global economic order by drawing up concrete and actionable recommendations for the G20. Accordingly, it should not shy away from tackling difficult issues, which, not least, currently include world trade and international climate policy. Just how effective the B20 is depends not only on its recommendations but, equally important, on the process itself: member participation, representativeness, and transparency. Under the German chairmanship, the B20 undertook a series of reforms in this area. Moreover, we significantly strengthened cooperation between the G20 dialogue partners. I would like to see B20 Argentina continue in this direction.

Stormy-Annika Mildner has headed the Department for Foreign Economic Policy at the BDI since 2014. She was Sherpa for B20 Germany in 2016–17.