GLOBAL BRIEFING REPORT
GERMANY
FEATURE
Germany:
Reliable and
Strong Partner
of the B20
The B20 plays a vital role in the G20 providing not only firsthand knowledge and expertise but also helping to build trust and understanding.
By Dr. Stormy-Annika Mildner
Germany:
Reliable and
Strong Partner
of the B20
Germany:
Reliable and
Strong Partner
of the B20
The B20 plays a vital role in the G20 providing not only firsthand knowledge and expertise but also helping to build trust and understanding.
By Dr. Stormy-Annika Mildner
GLOBAL BRIEFING REPORT
GERMANY
FEATURE
Germany:
Reliable and
Strong Partner
of the B20
Germany:
Reliable and
Strong Partner
of the B20
The B20 plays a vital role in the G20 providing not only firsthand knowledge and expertise but also helping to build trust and understanding.
By Dr. Stormy-Annika Mildner
Few countries
are as deeply integrated into the world economy as Germany. The trade-to-GDP ratio (exports and imports of goods and services) was 86 percent in 2018. Foreign trade is one of the country’s most important engines of growth, competitiveness, and employment. About one in four jobs in Germany depends directly or indirectly on exports. Germany is moreover integrated into the world economy not only through exports and imports. German companies are heavily invested globally. German direct investment abroad has increased almost sixfold to some €1.1 trillion (2016) since 1990. Through the resulting stakes in more than 37,400 companies, the German economy is responsible for 7.3 million jobs abroad (2016). On this basis, it generates a foreign turnover (€2.8 trillion in 2016) that is more than double the value of German exports (€1.3 trillion in 2018). The World Economic Forum has ranked Germany the most innovative country in the world, citing the tremendous speed with which Germany develops new technologies, particularly in the field of Industry 4.0. This is a direct result of the strong international orientation of German companies.

We thus know firsthand that globalization creates many opportunities – but also vulnerabilities. The future of the German economy decisively depends on how global challenges such as cyber risks, climate change, epidemics, and geopolitical conflicts are managed. No country can master these challenges alone. The globalized world economy needs global governance. When Germany took over the G20 presidency in 2016, there was therefore no question that the Federation of German Industries (BDI), the Confederation of German Employers’ Associations (BDA) and the Association of German Chambers of Commerce and Industry (DIHK) would jointly organize the B20 process. After the B20 handover to the Argentine G20 Presidency, the work of B20 Germany was by no means done. We continued our efforts by working closely together with our Argentinian partners in the B20 Troika, just as we actively and enthusiastically supported this year’s Japanese B20 process.

The work of the B20 is more important than ever. Trade distortive practices – tariffs, non-tariff barriers, subsidies, theft of intellectual property rights, and forced technology transfer, to name a few – are in vogue. More and more countries are pursuing go-it-alone strategies. This is unfortunate as trade and investment are indispensable for economic growth and development worldwide. Over the last decades, they have lifted billions of people out of poverty. To ensure that everybody benefits from trade, however, we need open and rules-based markets. Thus, we are vehemently advocating the G20 to recommit to a protectionist standstill and rollback, and to advance the reform of the World Trade Organization. We need a strong WTO as guardian of fair competition. We therefore ask the G20 to work together in order to advance the organization’s rulebook to more effectively address distortions caused by state-owned enterprises and subsidies, to forge ahead with plurilateral initiatives such as on e-commerce, and to pursue a meaningful reform of the dispute settlement mechanism.

Trade is not the only area in which the G20 needs to take more decisive action. Digitalization is affecting our day-to-day life. It is changing how we communicate, travel, and work. It offers immense opportunities – but, if not managed well, it can also have immense disruptive effects. To ensure that everybody has the opportunity to benefit from digitalization, the G20 should work more closely to ensure the free flow of data in order to facilitate digital trade. Furthermore, the G20 countries should strengthen their cooperation on cybersecurity within international fora as well as by collaborating on IT-security-related policies and standards rather than pursuing separate national approaches. Last but not least, we would like to see the G20 more deeply to discuss the evolution of human-centric artificial intelligence, enabling the evolution of voluntary international standards.

Trade is not the only area in which the G20 needs to take more decisive action. Digitalization is affecting our day-to-day life.
We need more international cooperation, not less! This also goes for the field of climate and energy policy. The fact that the G20 consensus on the implementation of the Paris Climate Agreement did not hold up during the G20 Hamburg Summit of 2017 because the United States exited the Accord is particularly unfortunate. The remaining G20 countries should of course reiterate their commitment to the Paris Agreement, but moreover should propose more concrete measures how the Accord can be fully implemented and how clean energy systems can be achieved. Furthermore, they should intensify the discussion on globally converging carbon pricing. In addition, G20 Leaders should also highlight the importance of the circular economy in order to achieve sustainable development. The G20 bears special responsibility as it represents some of the most important industrialized and emerging nations. The G20 stand for about 80 percent of the world GDP, but they also stand for 80 percent of the global greenhouse gas emissions.

International cooperation has become more difficult; the G20 is increasingly struggling to find a meaningful consensus. However, the G20 should not be judged solely on its track record of adopting and implementing resolutions. One of the group’s key functions is to provide a platform for informal, cross-sector and flexible exchange on the highest political level. The opportunity for global leaders to sit together at the G20 table cannot be overestimated. Constant communication supports a common problem analysis that enables the development of cooperative solutions in an atmosphere of trust, thereby facilitating the implementation of G20 resolutions.

This holds true also for the B20. The B20 plays a vital role in the G20 process, providing the G20 with firsthand expertise and knowledge necessary to govern the global economy. The recommendations of the B20 matter! The reports of the International Chamber of Commerce and B20 Germany of G20 Communiqués underline the high responsiveness of the G20 to the B20 recommendations. With its networks and people-to-people dialogues, the B20 helps to strengthen the G20 community. It fosters the exchange of ideas and best practices and helps to identify common interests, building trust and understanding as well as consensus. In today’s uncertain times, this is more important than ever. Representativeness – transparency – accountability – B20 is a member-driven organization. It will only be effective if its positions are strongly based on consensus among its members. Transparency of decision-making processes and a representative membership are key. Each B20 presidency needs to ensure continuity, following up on the recommendations of previous presidencies. The B20 has a solid track record on all of these accounts.

Global prosperity can only be secured through cooperation and multilateralism. Germany has been a reliable and strong partner for the G20 and B20, and we promise to continue our efforts – during the B20 Japan cycle, as well as the upcoming presidencies.

About the author
DR. STORMY-ANNIKA MILDNER is Head of Department External Economic Policy of the Federation of German Industries and B20 Germany Sherpa.
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