BUENOS AIRES (REUTERS) - G-20 member nations were still struggling to reach agreement on major issues including trade, migration and climate change as world leaders began arriving in Buenos Aires ahead of a summit starting on Friday (Nov 30).
"This is not a good year for multilateralism," said a German government source about talks on a final communique that the leaders are due to issue at the end of their meeting on Saturday.
The negotiations are "very, very difficult," the official told Reuters.
The official offered no details on the points of dispute, but global trade tensions, fueled by President Donald Trump's launch of a trade war against China, are expected to dominate this year's gathering of the G-20, an unwieldy club of the world's industrialized countries.
Trump's skepticism of man-made global warming has also raised questions about what the communique will say on the issue.
This year's G-20 gathering in the Argentine capital is expected to be one of the most consequential summits since the group's leaders first met in 2008 to plan how to contain the economic crisis roiling the globe.
Financial and commodities markets are closely watching the outcome of the summit, especially the planned meeting between Trump and Chinese President Xi Jinping on Saturday.
A slowdown in the global economy will worsen if Trump presses ahead with plans to further increase tariffs on some US$200 billion (S$274 billion) of Chinese imports to 25 per cent, OECD Secretary General Angel Gurria told Reuters.
Gurria said the impact of existing US trade tariffs of 10 per cent on Chinese goods amounted to a loss of 0.2 per cent of global gross domestic product by 2020.
“If you jack the tariffs up to 25 per cent and then others retaliate, the impact could go all the way up to almost 1 per cent,” he said.
Argentina, this year’s G-20 president, has stressed the importance of the summit as a consensus-building forum. But the divisions have only highlighted how fractured the grouping has become on key global issues.
"After 2½ days of talks and very short nights, some two-thirds of the paragraphs have been okayed," said a G20 official involved in drafting the communique.
"Now, trade, climate, migrants, refugees, multilateralism, steel - which are really the thorny issues - remain without agreement." Argentina, this year's G20 president, has stressed the importance of the summit as a consensus-building forum. But the divisions on the final communique have only highlighted how fractured the grouping has become on key global issues.
"It's moving very very slowly - so slowly that I think we will have to stay in this room past midnight, again," an Asian delegate who was attending the closed-door discussion told Reuters.
Financial markets though are less concerned about the ability of the leaders to present a united front and more anxious about the outcome of key bilateral meetings. Wall Street edged lower on Thursday amid jitters over Trump's meeting with Xi.
Trump said on Thursday he was open to a trade deal with China but was not sure he wanted one.
"I think we're very close to doing something with China but I don't know that I want to do it," Trump told reporters.
Trump's hardline trade adviser, Peter Navarro, will attend the meeting between Trump and Xi, a source familiar with the situation told Reuters.
China, for its part, is hoping for "positive results" in resolving the trade dispute with the United States, the commerce ministry said on Thursday.
The United States has levied additional duties of between 10 per cent and 25 per cent on US$250 billion of Chinese goods this year as punishment for what it calls China's unfair trade practices, with the 10 per cent tariffs set to climb to 25 percent next year. China has responded with its own tariffs.
NO PUTIN MEETING
One leader Trump will not be seeing in a one-to-one meeting is Russian President Vladimir Putin. Trump abruptly announced he was cancelling their planned bilateral talks, citing Russia's seizure of Ukrainian vessels, shortly after he departed Washington for Buenos Aires.
"Based on the fact that the ships and sailors have not been returned to Ukraine from Russia, I have decided it would be best for all parties concerned to cancel my previously scheduled meeting in Argentina with President Vladimir Putin," he tweeted.
Roughly an hour earlier, he had told reporters he would probably meet with Putin at the summit and said it was "a very good time to have the meeting." The White House said Trump made the final decision to cancel the meeting while aboard Air Force One.
This year's G-20 summit is also grappling with how to handle the presence of Crown Prince Mohammed bin Salman. Saudi Arabia's de facto ruler arrived in Buenos Aires on Wednesday under a cloud of controversy over the murder of Saudi journalist Jamal Khashoggi in a Saudi consulate in Istanbul in October.
Argentine President Mauricio Macri said the allegations against bin Salman may be discussed during the G-20 summit. Saudi Arabia has said the prince had no prior knowledge of the murder.
As the leaders arrived, Argentine security forces began locking down the central business district in Buenos Aires on Thursday. Streets and shops were noticeably emptier.
The government has declared Friday a national holiday and urged the capital’s residents to leave to avoid travel chaos caused by the security lockdown. Major protests are also due on Friday.