US-China pressure notwithstanding, the final G20 communique has skipped mentioning a December 2016 deadline for its 20 member countries to ratify the Paris Agreement. It has also avoided specifying a ‘date certain’ for ending fossil fuel subsidies. Both moves were strongly opposed by India during the three-day sherpa meetings before the leaders summit on September 4-5.
In his intervention on the concluding day of the summit, Prime Minister Narendra Modi acknowledged that climate change was one of the foremost challenges with the Paris Agreement showing the way forward. He, however, said, “Focus should not just be on early ratification, but full success.”
The Prime Minister’s sherpa Arvind Panagariya explained that India was not ready in terms of domestic actions to ratify before 2016 end, but will do so at the earliest. “There was an issue with respect to the G20 endorsing a proposal that all members would ratify the Paris Agreement by 2016. On that, there were some disagreements. So the final communique plans to welcome countries that plan to ratify by 2016, but others have said they would try to proceed as soon as possible,” he said.
On fossil fuels, Panagariya, who is also the vice-chairman of Niti Aayog, said many other countries including India did not agree on a ‘date certain’ for ending fossil fuel subsidies. “There was a discussion on energy, including ending fossil fuel subsidies and this has been a commitment from the past by the G20. But there was no agreement on that,” he said.
The nine-page single-space 7,000-word-plus communique agreed to by 20 sherpas over 40 hours also denounced protectionism and most significantly has brought the issue of excess steel capacity in China onto the international radar. “The communique refers to excess capacity that exists in the market and how to deal with it on a more multilateral basis. There is a proposal to have a global forum under the auspices or support of the OECD and G20 members pledge to support that,” Panagariya said.
When asked if the issue of excess steel capacities impacted India given that steel companies in India were in bad shape and were contributing to the non-performing assets of banks, he said, “The discussions were in terms of general excess capacity in steel and some other industries. Steel was mentioned, others were not mentioned. We discussed how to really deal with it on a multilateral basis. The fear is that if individual countries act, then it degenerates into protectionist actions by the countries. The discussion was whether you can do it in a more systematic manner so that it avoids protectionist measures,” Panagariya said.
As far as trade is concerned, there was a very strong sentiment that the G20 stands firmly against protectionism. “We support multilateralism, and the G20 wants regional trade agreements to be fully compatible with the multilateral trade liberalisation,” the sherpa said. The Chinese presidency has also introduced a new agenda item to the table: Investment. “There are certain guiding principles that have been worked out and are elaborated in a separate document endorsed by the G20 leaders,” he added.
India also made a strong pitch for the adoption of measures to tackle BEPS (base erosion profit shifting) to countries that are not part of the G20. “There is a general agreement on BEPS, but G20 alone cannot successfully carry the agenda. This is about profit shifting. And this can happen outside the G20 countries. The push by India is that we need other countries outside the G20 to also come on board,” he said.
The other important parts of the G20 Summit discussions were sustainable growth with innovation being introduced as a key aspect, development and other significant challenges before the world economy including Brexit, terrorism, influx of refugees and AMR (anti-microbial resistance). “We have influenced outcomes in every area,” Panagariya, who was India’s chief negotiator, said.
- Communique also avoided specifying a ‘date certain’ for ending fossil fuel subsidies
- PM Modi acknowledged climate change challenge but said focus should be on but ‘full success’
- India not ready in terms of domestic actions to ratify before 2016 end: Panagariya
- Communique also denounced protectionism
- Significantly, raised issue of excess steel capacity in China
- Very strong sentiment that G20 stands firmly against protectionism