About 42 years ago, the global community created what was then known as the G-6.
France, Germany, Italy, Japan, the United States, the United Kingdom would meet regularly to discuss international economic and monetary issues, international security, and energy policies, as well as preventing economic catastrophes from crippling the global community.
Canada would join the following year in 1976, creating the G-7.
By 1999, though, at the suggestion of the G-7, the G-20 was created in response to one of the worst financial crises the world has seen – the Asian Contagion, which ran from 1997 to 1999.
The G-20 as requested by the G-7 became a necessity.
Initially, attendance at such events was limited to just finance ministers, and central bank governors. But ever since the collapse of Lehman Brothers in 2008, summits between G20 leaders have become an annual event.
In fact, world leaders just met over the weekend in Hamburg, Germany.
The Outcome of the Latest G-20 Summit
Over the weekend, G-20 members reached broad agreements on revitalizing sagging growth in the global economy, supporting free trade and open markets -- a key promise aimed at helping support growth in the wake of the 2008 Recession.
“We will continue to use all policy tools — monetary, fiscal and structural — individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth, while enhancing economic and financial resilience.”
For example, they agreed to “continue to fight protectionism including all unfair trade practices and recognize the role of legitimate trade defense instruments in this regard.”
We will keep markets open noting the importance of reciprocal and mutually advantageous trade and investment frameworks and the principle of non-discrimination, and continue to fight protectionism including all unfair trade practices and recognize the role of legitimate trade defense instruments in this regard. We will strive to ensure a level playing field, in particular by promoting a favorable environment for trade and investment in this regard. We further reaffirm the importance of transparency for predictable and mutually beneficial trade relations. To this end, we value the monitoring activities by the WTO, UNCTAD and OECD within their existing mandates. We commit to further strengthen G20 trade and investment cooperation. We call on the OECD, WTO, World Bank Group and IMF to continue their work to better understand trade impacts and report back to G20 Leaders in 2018.
In addition, they agreed to make a renewed push to reduce excess steel production capacity – especially in China – that has already let to lower prices. At last year’s G-20 summit, China vowed to cut 100 million to 150 million tons of steel capacity over the next few years.
In fact, leaders are now committing to “rapidly develop concrete policy solutions that reduce steel excess capacity,” which could be a big victory for President Trump as he considers new tariffs and quotas on U.S. steel imports.
The only thing many couldn’t agree on was the issue of climate change.
In fact, according to the latest G20 communiqué:
The United States of America announced it will immediately cease the implementation of its current nationally determined contribution and affirms its strong commitment to an approach that lowers emissions while supporting economic growth and improving energy security needs. The United States of America states it will endeavor to work closely with other countries to help them access and use fossil fuels more cleanly and efficiently and help deploy renewable and other clean energy sources, given the importance of energy access and security in their nationally- determined contributions. The Leaders of the other G20 members state that the Paris Agreement is irreversible.
But the one certainty is that all groups are fighting for growth, which can be a great catalyst for global market if done the right way.