Canada: The St. Petersburg G20: The Attention To Syria Overshadows A Modestly Successful Summit

Last Updated: September 18 2013
Article by Len Edwards

The St. Petersburg Summit, September 5 and 6, came up with some good results in a number of areas on its economic agenda. However, it was the Syrian issue and President Obama's effort to build support for his proposal for a military strike on Syria that has dominated media attention.

Prime Minister Harper and the Canadian business community should be relatively happy with the most of the economic outcomes from St. Petersburg, particularly the attention given to reducing debt-to-GDP ratios (although Canada would have preferred agreement on firm targets as versus the submission of medium term plans), the boost to the trade agenda, and the firm language on carrying forward the financial regulatory agenda.

Syria Captures the Headlines

This is the first time a major international political crisis has coincided with a G20. With its agenda focused by design on economic matters (and with members not yet ready to expand its work officially into political issues), the Syrian issue was handled largely on the margins, in side meetings and by some foreign ministers who were invited at the last minute to handle the matter for leaders outside the formal summit.

Given that his chances of success were so slim, there is some question as to why the President persisted in driving the Syria issue so hard. His failure to get support for military action in response to the Assad regime's unconscionable chemical weapons attack on his own people, and the lack of any agreement on alternative ways forward in Syria, are shaping a public perception that this G20 fell well short of expectations.

On the outside looking in, it is hard to gauge to what extent Syria distracted leaders' attentions from dealing more effectively with pressing economic issues. For example, BRIC countries cannot have been happy to have this matter take precedence over their primary concerns about links between U.S. monetary policy and their struggles with declining growth rates, capital fight and falling currency values.

While the formal agenda went ahead as planned, some of the private conversations and pull-asides that would normally be given to sorting out differences over economic matters were certainly impacted. Part of the leaders-only dinner on the Thursday evening - traditionally an important informal event focusing on key global economic issues of the moment - was apparently devoted to the Syrian issue.

But Some Good Economic Results Just the Same

It does appear that despite the time and attention leaders had to give to the Syrian crisis, they still had adequate time to focus productively on the main agenda. St. Petersburg produced some solid economic outcomes.

Some of this was also the result of progress since the 2012 Los Cabos Summit on the extensive G20 work program, which leaders have mandated over several summits. Finance ministers also play an important role in driving much of the G20's intercessional work.

In addition leaders' Personal Representatives or "Sherpas" and senior Finance Deputies do most of the final negotiations on outstanding issues in the two days before leaders arrive and the Summit begins.

A final factor ensuring progress is the increasing emphasis being placed on G20 "accountability". This has been pushed by Canada and others since the 2010 Toronto Summit as a way to drive implementation of past commitments, and to build G20 credibility. The G20's record of meeting expectations and deadlines has not been perfect, but it means that summits will always have some good results to report.

All these factors gave St. Petersburg some resiliency in facing the unexpected demands of a political crisis on the margins of the Summit.

The lengthy St. Petersburg Declaration and its various Action Plans and other documents set out a number of significant initiatives, including some of special relevance to the private sector.

The Global Economy - Steady as She Goes

Amid a very cautious outlook ("recovery is too weak and risks remain tilted to the downside"), a few specific results stand out:

  • Advanced countries (and some others) agreed to develop and make public medium term strategies for bringing their fiscal deficits under control, building on the Toronto agreement to "at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP rations by 2016"
    • This was a compromise solution between President Obama and other leaders, on one hand, seeking flexibility in order to spend if necessary to promote growth, and on the other, leaders such as Prime Minister Harper and Chancellor Merkel who argued for hard targets
    • Canada provided a precise debt reduction target of 25% of GDP by 2021, a step too far for most
  • It was agreed that as economic growth recovered in individual countries, their monetary policy changes should be gradual and communicated in advance to limit "spillover" effects
    • This was a concession to the emerging economies' concerns raised in the days before of the Summit by the Indian PM and by Indonesian and Brazilian finance ministers among others that the lack of clarity from the U.S. Federal Reserve concerning the speed and timing of its exit from quantitative easing policies was leading to market uncertainty, capital flight and dropping currency values
  • In return, advanced countries got agreement on language that relevant G20 countries (read China) should move "more rapidly toward more market-determined exchange systems and exchange rate flexibility... and avoid persistent exchange rate misalignments"
  • Finally, the Russian President was able to claim some success on his "jobs and employment" theme
    • Leaders committed to improve labour markets, to promote youth employment and to develop and exchange country-specific plans
    • Canada was able to get some wiggle room on this last undertaking recognizing that constitutional authority is shared with the provinces in this area

International Trade Talks Get A Boost

This was a very contentious area, which was not sorted out until the summit in St. Petersburg. In the end, leaders agreed

  • That a "successful" outcome at the next WTO Ministerial in December should include progress on trade facilitation (Canada and advanced countries want to see a specific negotiation launched in this area)and on some elements on agriculture and development (the latter two probably inserted as a quid pro quo by emerging economies led by Brazil and Argentina.)
  • To renew for a further three years the Toronto Summit's 2010 commitment not to introduce any new protectionist trade measures

Tax Avoidance, Transparency and Anti-Corruption

Both the G8 and the G20 have been driving this group of issues. The Canadian government has been a strong supporter. Leaders agreed to:

  • Press ahead with greater cross-boarder transparency on tax data
  • Implement a proposal developed by the Organization for Economic Cooperation and Development (OECD) under which G20 countries will cooperate to ensure that corporations doing business in more than one country do not avoid paying taxes in those jurisdictions where "economic activities deriving the profits are performed"
  • Carry forward further the G20's robust Anti-Corruption Action Plan in order to combat bribery, corruption and "promote public integrity and transparency"

Driving Financial Regulatory Reform

This has been a core G20 activity since 2009, and one on which Canada has played an important leadership role. It has focused on strengthening domestic regulatory systems measured against better and tougher international standards (e.g. Basel III) to as to prevent future financial crises.

In St Petersburg, leaders predictably weighed in strongly to support and encourage continued progress in:

  • Creating "more resilient" banks and insurance companies in the "too big to fail" category, and starting similar work on non-bank an non-insurance companies
  • Putting in place effective resolution regimes in the event of crises with these systemically important financial institutions, including cross-border arrangements, frameworks and legal systems
  • Continuing work on OTC derivatives trading and on shadow banking institutions

While leaders recognized that progress has been slow, that some deadlines have been missed, and that much work remains (something underlined by Mark Carney, the head of the Financial Stability Board, in the days before the Summit), they expressed the determination to pursue this work "until the job is done".

Other Matters

  • Russia's effort to emphasis the theme of energy and green growth did not amount to much in the end; emphasis was placed on effective and transparent markets (extended to include all commodities), with language on sustainable energy development.
  • Leaders showed some collective frustration with the inability of their own governments (led by US and European resistance to giving up power) to implement the IMF governance reforms agreed in 2010, namely to strengthen the voice of emerging economies in its decision-making. With the next Quota Review deadline looming in January 2014, this has now become extremely urgent.
  • As regards another Russian priority, leaders agreed to launch a work plan to better understand the factors behind shortfalls in the availability of long term financing for investment particularly in developing countries and in such areas as infrastructure

Conclusion

Overall, the St. Petersburg G20 met and probably surpassed the modest expectations of the more optimistic observers. The summit has shown that the G20 can function, if less spectacularly, in a non-crisis economic environment. Others will be dissatisfied with the results and see them as evidence that the G20 has lost its early momentum and is not engineering the major rebalancing of the global economy that was part of its plan three years ago.

But in the public eye, the Russian G20 is more likely to be remembered for its apparent failure to find a way forward on the Syrian issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions