20 Greatest Hits from the G20

6th December 2018

By Scott Squires

20 Greatest Hits from the G20

When leaders gather from the world’s twenty most industrialized nations, accounting for two-thirds of global population and 85 percent of global GDP, a lot of earthshaking news is bound to happen. If you’re still processing the slew of headlines coming out of last weekend’s summit, The Essential is here to help.

Below is a breakdown of all the greatest hits from the G20: the issues that matter most for Argentina and the major breakthroughs that will affect the world. We’re not just playing the platinum hits here — we’re digging into the B-sides, folks.

Macri Makin’ Deals for Argentina

20. US invests heavily in Vaca Muerta oilfield development. One of Argentina’s major foci for the G20 was securing the investment the country needs to become energy independent. Argentina took a major step forward this weekend and signed letters of interest with the Overseas Private Investment Corporation (OPIC). The agreements will potentially contribute some $800 million to the $2.1 billion San Nicolás gas pipeline project, and will invest in heavily bolstering infrastructure for drilling and non-conventional hydrocarbon extraction in the Vaca Muerta oil field.

19. It’s not all oil and gas. Argentina also signed deals with the US to invest in renewables, including the Ullum I, II, and III solar energy parks in San Juan, and the Chubut Norte III and IV ($118 million) and Cañada Norte wind farms for some $50 million.

18. China also invests in energy and infrastructure. Despite promises early in his presidency to distance Argentina from China, Macri has cozied up to the Asian giant. China is now Argentina’s largest financial investor and second largest trading partner. Outspending the US by a long shot, China promised to invest $5 billion in Argentina’s railways, road work and alternative energy. This includes a pact to extend the deadline of the Belgrano railway project until 2020, and a loan extension for the Roca Electrico railway.

17. Russia is also getting into the Argentine energy market. The two countries signed a framework agreement to begin discussions on how to bring nuclear power to Argentina. While this doesn’t mean another nuclear plant is in the works, it does raise questions over the future of the Chinese-backed Atucha III plant. Though Reuters reported last month that the Atucha III deal would be finalized at the G20, no such agreement was realized. Argentine media has reported that talks on the plant are continuing.

16. Argentina won’t buy guns from the United States. Despite some chatter pointing to US arms sales to Argentina, the countries did not strike a deal on military equipment. It’s not off the table though. Despite being the 3rd largest economy in Latin America, Argentina’s military is underfunded. Many say this is to blame for the disastrous malfunction and disappearance of the ARA San Juan submarine last year

15. China currency swap agreement = expanded. In one of the thirty agreements Argentina signed with China during Xi’s official state visit, the two countries finalized an expanded version of the 2009 currency swap agreement. The revised swap expands Argentina’s credit line with China by $8.6 billion for a total credit line of $18.7 billion. Those Chinese yuan are convertible to other foreign currencies, allowing Argentina’s central bank to draw on the funds as emergency reserves in addition to funds provided by the IMF and other international lenders.

14. UK names “commercial envoy” to Argentina. As part of the effort to strengthen bilateral ties between Argentina and the UK, the two countries agreed to have the UK appoint a commercial envoy to Argentina. The envoy, MP Mark Menzies, who holds the same post to Chile, Colombia and Peru, will work to strike investment deals. This could include a bilateral free trade deal as Britain negotiates a not-so-graceful Brexit.

13. UK-Argentina diplomacy took off. Macri and British PM Theresa May welcomed an agreement with LATAM airlines to begin operating twice-monthly flights to the Malvinas (Falkland) islands. The two leaders safely piloted away from any discussion over sovereignty.

12. Bilateral investment treaty with Japan = signed. Argentina signed a bilateral investment treaty with Japan, host of next year’s G20 summit. The government says the treaty will promote Japanese investment in the Argentine economy and provide a legal framework to ensure predictability and security for Japanese investors.

11. US and Argentina squash the beef. The US and Argentina also agreed to two-way beef exports, re-opening the trade for the first time in 17 years. While Argentina will have a 200,000 ton quota on its beef exports, the US will not have a cap on its beef exports, except on the demand side — because what Argentine in their right mind would prefer US angus over their homegrown asado?

10. Herd of exports? In addition to expanded beef exports to China announced earlier this year, Argentina will expand its livestock and meat exports. The two governments signed a number of agreements that establish sanitary protocols for exporting live horses, mutton and goat. Macri also gifted Xi a polo horse during the Chinese president’s official state visit to Olivos.

9. Argentine cherries are also headed to China. Another casualty of the trade war, China has seen an absence of American cherries, which are popular around the Lunar New Year and have become subject to a 50 percent tariff. Now, China is looking to satisfy its sweet tooth with Argentine fruit. Pork and honey negotiations are also reportedly in the works.

8. Still no EU-MERCOSUR deal. At this point, the ten-year-old negotiations over a free trade deal between the European Union and MERCOSUR may never materialize. France’s Macron said just ahead of the summit the two customs blocs still had not reached an agreement, although Argentine Secretary of International Relations Horacio Reyser said the deal was “95 percent done.”

Internationally speaking…

7. Little new on climate change. Leaders agreed to reaffirm their commitment to the climate goals set out in the 2015 Paris Agreement, with the United States still taking reservation to the climate action plan in principle. While Trump threatened to pull out of the agreement last year, the United States is still meeting all the climate goals laid out in the agreement, despite its political posture against it.

6. G20 offered language on refugees and migration, but barely. By not including language around the negative effects of trade protectionism, the communiqué may have been a step backward for the G20. But according to an EU official, G20 “sherpas” were able to at least include minimum language acknowledging global migration and refugee crises. Although the official recognized the language in the communiqué as “disappointing,” he acknowledged it was better than nothing at all.

5. Trump and Russian President Vladimir Putin held sideline talks. This, despite Trump abruptly cancelling his bilateral meeting with the Russian leader after Russian forces seized Ukranian naval vessels off the coast of Crimea last week. It was unclear what Trump and Putin’s discussion was about. After the summit, US Secretary of State Mike Pompeo maintained that Trump was shaping a “new liberal order,” apparently a strategy to distance the Trump administration from Russia and China. Other G20 leaders at the summit, including EU Council President Donald Tusk and UN Secretary General Antonio Guterres criticized Russia’s military aggression in the region.

4. The US-Mexico-Canada Agreement (USMCA) was also signed at the conference, in Enrique Peña Nieto’s last move as Mexican President. After months of brinkmanship, the leaders signed a document that agrees in principle to replace the North American Free Trade Agreement. The deal now awaits domestic ratification in each country. Trump has shrugged off this final step, and has threatened to pull the US out of NAFTA to strong arm Congress into ratifying the USMCA.

3. A new bromance? In an instant, the world recoiled in discomfort and confusion when Saudi Arabia’s Crown Prince Mohammed bin Salman and Russian President Vladimir Putin high five’d like old college buddies during the G20 opening proceedings. CIA documents suggest the Crown Prince is responsible for ordering the murder of Washington Post Journalist Jamal Khashoggi at the Saudi Consulate in Istanbul earlier this year, and was duly sidelined by many G20 member nations at the summit. Likewise, Putin’s government is suspected of poisoning a former Russian operative in Britain earlier this year.

2. Reforming the WTO. Perhaps the most important agreement to come out of the G20’s watered down communiqué was an agreement by member countries to reform the WTO. Recognizing that global trade has changed significantly in recent decades, G20 countries agreed (after some maneuvering) that work would begin on reforming the organization. The WTO’s dispute resolution mechanisms have been deemed ineffective as the organization rapidly runs out of judges to hear pending cases. Leaders say the court is ill equipped to handle disputes around modern-day cases such as forced technology transfer and e-commerce issues.

1. Thawing the US-China trade war. The summit culminated in a dinner between Trump and Xi, who agreed to a ceasefire in the US-China trade war and a halt on Trump’s proposed tariff hikes (to 25 percent from 10 percent) on Chinese imports on Jan. 1. After the leaders agreed to forestall the hikes, Trump stuck to his strategy of playing nice with leaders abroad and then doing the opposite on Twitter when he gets home. Markets slumped on Tuesday after Trump coined his new superhero alter-ego “tariff man,” casting doubt on any progress made at the summit. Trump said on Wednesday he thought Xi was being sincere about scaling back the dispute.

Scott Squires

Scott Squires a journalist for Reuters in Buenos Aires. He holds a dual-Master's Degree in Global Policy Studies and Journalism from the University of Texas at Austin.