As expected, crucial differences over climate change emerged at the Group of 20 (G-20) summit in Hamburg last week, thanks to the dissenting views of American leader Donald Trump. In the event, an agreement of sorts was reached but hardly a satisfying one, as America's departure from the Paris climate accord meant that the G-20 could not voice a unanimous and consistent position on climate change. What the world needs is irreversible commitment to environmental sustainability to be demonstrated by major groupings. But, sadly, Americans are morphing from a global leader to a spoiler in crucial areas. As the US climate move threatens compensation for developing countries, Turkey has cast doubt over its ratification of the accord. This is a pity, but the G-20 minus one cannot be blamed for the Turkish response, which would have occurred in any case.
Rather more problematic is the G-20's stance on trade. The Leaders' Declaration demonstrates the need to keep markets open and to continue fighting protectionism, including all unfair trade practices. But the document also recognises "the role of legitimate trade defence instruments in this regard". That proviso represents a clear concession to Mr Trump's insistence on America's right to protect its market from whatever it might deem to be unfair practices by other countries. The G-20 declaration had to make this gesture to prevent the US from breaking ranks with others at the summit. However, "legitimate trade defence instruments" could become the first step to protectionism which would invite counter-sanctions from affected countries. But such is the myopia that characterises the Trumpian doctrine of "America First" that the entire world might wind up paying a heavy price for it.
The G-20, which played a vital role in resetting the global economic agenda after the 2008 crisis, must be alert to the message that it is sending out today. Unlike that crisis, which was created by unchecked excesses of the market, globalisation today is under pressure from a crisis of faith in some quarters. The truth is that globalisation is not a force of nature but a human act whose downside - primarily growing disparities within nations - can be curbed through policy prescriptions. These would see the advanced economies prepare their workers for change by emphasising education and skills that enable them to climb the growth ladder even as certain jobs and even industries travel to the developing world.
Notwithstanding its turn inwards, America - without which the G-20 would be handicapped in scope and power - must remain committed to the rules-based liberal trading order which created Pax Americana after World War II. The slogan of "America First" should not undermine the need for consensus on free trade at this difficult time in international economic history.
