G-20 Leaders Find Trade Compromises but Are Split on Climate -- Update

By Emre Peker, Andrea Thomas and William Horobin Features Dow Jones Newswires

Leaders from the Group of 20 countries vowed Saturday to fight protectionism and secure fair trade, finding a broad consensus after President Donald Trump's defiant position exposed a rift between the world's leading economies.

Continue Reading Below

After marathon meetings over a two-day summit here, the leaders reached compromises in agreeing to deploy defensive measures in pursuit of balanced trade. But efforts by the German presidency to engineer a similar consensus on the need to fight climate change failed, with the delegates only acknowledging in their statement the split between the U.S. and the rest of the G-20 members.

In their communiqué, the G-20 noted "the importance of reciprocal and mutually advantageous trade and investment frameworks." In a nod to Mr. Trump and other leaders' concerns over trade imbalances, the group also said it recognized "the role of legitimate trade defense instruments" to counter unfair practices.

Securing the support of Mr. Trump, whose "America First" policies have the potential to clash with many of the principles of the international economic order, was the dominant theme among officials here as the gathering drew to a close.

"The communiqué is overall a good achievement because all the fundamentals are there," a European Union official said, as leaders largely avoided isolating the U.S. "We have a G-20 communiqué, not a G-19 communiqué."

Another official from a European delegation said the talks had shown that a new international consensus on economic issues could be slowly rebuilt despite the challenges thrown by Mr. Trump's election.

Continue Reading Below

"All things considered, my impression is that we're getting back in small steps in many areas to a greater degree of business as usual," the official said.

The U.S. wasn't alone in having different views on trade, officials said, while pointing at Mr. Trump's support for international organizations that underpin global trade as one of the summit's achievements.

Ahead of the summit, G-20 officials cited concerns that Mr. Trump's decision to scrap a 12-country trans-Pacific pact and renegotiate America's trade agreement with Canada and Mexico would also extend to undermine platforms such as the World Trade Organization. The White House has launched a review of the WTO, with an eye toward proposing reforms.

"We agree with the Americans on a certain number of subjects, like trade reciprocity. Where we don't agree with the Americans is on calling into question of the system," a French official said.

Keeping the U.S. in the fold, leaders overseeing 80% of the global economy are seeking to work more closely on challenges ranging from a glut upending steel markets to the migration crisis and imbalances driven by globalization.

Yet in a sign of the difficulties ahead in satisfying Mr. Trump's demands, G-20 members wrangled for days to find a joint position on climate change in the aftermath of Mr. Trump's decision to discard the Paris agreement to act to curb global warming.

In the end, they split the difference. Germany, which holds the rotating G-20 presidency this year, led the "very difficult" negotiations to reaffirm 19 members' commitment to the Paris accord, while accommodating Mr. Trump's stance on clean energy, officials said.

Mr. Trump's negotiators inserted a line into the communiqué on the U.S. helping other countries "access and use fossil fuels more cleanly and efficiently," the EU official said.

"The inclusion of this paragraph is the trade-off of having a consensual approach," the EU official said. "Obviously, to have in the text a reference to these kind of energy sources is not something we like."

Paris pushed hard to isolate the U.S. on climate change, the French official said, and safeguard the 2015 accord signed by every country in the world except Syria and Nicaragua. Signatories overwhelmingly rallied behind the deal after Mr. Trump's decision to pull the U.S. out.

"We don't want any contagion," the French official said.

Another sticking point at the annual G-20 gathering was migration. Russia and China blocked an effort by Brussels--supported in principle by the U.S.--to pursue United Nations sanctions against human traffickers, according to EU officials.

Thousands of people are killed each year because of illegal immigration, which is particularly acute in Europe. G-20 leaders committed to countering migrant smuggling and human trafficking for the first time in their conclusions, albeit without any specifics.

"The reference to countering migrant smugglers and bringing them to justice is a very important step," another EU official said, characterizing the agreement as a good start.

While the EU's push to tackle the global migration crisis was watered down and climate-change discussions isolated the U.S., the G-20 members averted what many officials had flagged as a major risk ahead of the summit: trade wars.

"International trade and investment are important engines of growth," the G-20 leaders said. "We will strive to ensure a level playing field, in particular by promoting a favorable environment for trade and investment."

Write to Emre Peker at emre.peker@wsj.com, Andrea Thomas at andrea.thomas@wsj.com and William Horobin at William.Horobin@wsj.com

(END) Dow Jones Newswires

July 08, 2017 11:55 ET (15:55 GMT)