Can SA’s G20 agenda survive Trump and other obstacles?

The US led the way in blocking consensus on several of South Africa’s priorities in the G20 finance ministers and central bank governors meeting in Cape Town last week, raising serious questions about what South Africa can achieve with its G20 presidency this year.

The US Treasury Department’s representative objected to much of SA’s developmental agenda, according to some diplomats. Other diplomats, though, said the US was not alone to blame for the failure of the meeting to reach agreement.

This failure obliged the chairperson of the meeting, SA Finance Minister Enoch Godongwana, to announce that there was no consensus for a communique and that he would instead issue a “chair’s summary of the meeting”.

Some diplomats said the US Treasury official had objected even to that and did not want Godongwana to issue any statement about the meeting’s outcome.

Western diplomats stressed that most other G20 member governments had fully endorsed SA’s themes of solidarity, equality and sustainability. However, there was strong resistance to the agenda from the US and the rightwing Argentina government.

Uncertainty about SA achieving its G20 priorities also raises questions about the capacity of the world to finance essential development goals, especially also in the light of the Trump administration’s abolition of the critical development agency USAID and recent cuts in development budgets by major donors including the UK, France and Germany.

Some diplomats Daily Maverick spoke to laid almost all the blame on the US Treasury representative for the lack of consensus at the G20 meeting, with one noting that the “US headwinds were even stronger than at the foreign ministers’ meeting”, the week before.

However, they noted that the chair of the Federal Reserve, Jerome Powell, had caused no problems. Other diplomats said the blame should be more evenly spread, though they agreed the US should carry much of it.

“There were a number of no-shows, including Pretoria’s BRICS partners,” said one diplomat, noting that neither China nor India, nor Brazil had sent their finance ministers, which undermined the meeting.

Opposition

The diplomat thought the US had been tentative because of the newness of the Trump administration. The US representative expressed opposition on some issues where Trump’s policy has emerged, but did not want to commit on other issues without backing.

The US was not the only one disagreeing. The diplomat noted that the US and Argentina had worked in tandem in opposing some SA positions, especially on climate change and international taxation.

Climate change is a key priority for Pretoria. It is trying to get G20 backing for global efforts to mobilise more finance to counter climate change and to fund just energy transitions, modelled on SA’s Just Energy Transition Partnership, which has received pledges of $8.5-billion in funding from several European countries and the US, though the Trump administration is likely to pull out of this.

SA is also trying to accelerate long-running G20 efforts to establish a fairer international tax system, including by curbing aggressive tax avoidance practices by multinational corporations.

In his speech, President Cyril Ramaphosa listed SA priorities as increasing international financial support to help developing countries prevent natural disasters caused by climate change and to help them with post-disaster reconstruction.

Another priority was to help developing countries better manage their debt, including by improving the G20’s 2020 Common Framework for Debt Treatment, which helps the most indebted countries. Ramaphosa said the G20 should tackle unsustainable debt by accelerating the reform of multilateral development banks and strengthening capital flows to emerging markets.

A fourth priority was to harness critical minerals for inclusive growth and sustainable development. Ramaphosa said one way would be to ensure that these minerals, sought after for green and high-tech manufacturing, were developed to the benefit of the countries which own them, including by ensuring that refining and processing takes place at or close to source.

Ramaphosa summarised SA’s goals by saying, “The G20 must show leadership in addressing the imbalances that persist in the global economy and filling the significant gap in funding required to achieve the Sustainable Development Goals [SDGs].”

The 17 SDGs, which include eliminating poverty and hunger by 2030, are way off track and SA is hoping to use its G20 presidency to get them back on track.

However, this was dismissed by the US, some diplomats told Daily Maverick.

This was not exactly a surprise as the Trump administration has a deep ideological difference with the core tenets of SA’s agenda, which are developmental and based on the principles of solidarity, equality and sustainability.

US Secretary of State Marco Rubio made that clear last month when he announced he would not attend the G20 foreign ministers meeting because SA was using the gathering to promote “DEI and climate change”.

DEI is diversity, equity and inclusivity policies, which are anathema to the Trump administration, while Trump does not believe climate change is due to the actions of humans.

Danger

The danger is that all these sharp differences that prevented consensus at the finance ministers and central bank governors meeting will cascade through all the other G20 meetings during the year and crash on the summit in Johannesburg in November, again preventing the issuing of a joint communique or declaration.

One more optimistic diplomat said he saw signs that South Africa was toning down its goals because of a better grasp of potential deliverables.

“That would be positive.” He noted, however, that the geopolitical situation and the US remained “big wild cards”. He thought that SA might achieve agreement on some lesser issues such as disaster risk reduction measures and guidelines for the development of critical minerals.

However, the overall declaration could still crash on geopolitics and Trump.

How Pretoria manages this is part of its larger problem of trying to preserve precarious relations with the US.

More broadly, how will the rest of the world be able to fill the development financing gaps left by the US withdrawal from common development goals in the G20 process and the shutting down of USAID?

This has been exacerbated by Britain, France, Germany, Belgium and the Netherlands also recently cutting aid spending.

It would be difficult to achieve a final G20 outcome in November if the US kept obstructing, said one diplomat.

“But eventually it might become clear even to Trump that much of what they do particularly in the financial track is in the US’s own interest. That’s why they set up the G20 in the first place, during the financial crisis.” DM