G20: economics to take a back seat

PM Malcolm Turnbull and Minister for Finance Mathias Cormann after arriving in Hamburg. Picture Kym Smith

Malcolm Turnbull has arrived in Hamburg probably not expecting to find himself a minnow in a pool suddenly teeming with sharks.

But the waters of this weekend’s meeting of the G20 in Germany have darkened in the past few days and much of what is now likely to dominate will have little to do with Australia.

North Korean belligerence has ensured this will be fundamental to a summit originally founded on the principles of economic co-operation. The summit will be attended by all those nations with a critical and more immediate stake in North Korean aggression: US, China, South Korea, Russia and Japan.

The dynamics between all five have changed and the effect of these shifting sands will be on display in Hamburg. It will also be the first G20 meeting attended by Donald Trump as US President.

There is little doubt the love-in inspired by the meeting between Trump and Chinese President Xi Jinping at Trump’s Florida resort, Mar a-Lago, had soured before this week’s missile test by North Korea.

It will now be downright frosty, and for three key reasons — and at least two of them have major G20 implications.

The first is Trump’s increasing frustration at China’s unwillingness to rein in its belligerent ally. The White House believes there is simply no resolve by China on this issue. China on the other hand will be unimpressed with Trump’s decision to impose sanctions on at least one Chinese bank it claims was still dealing with the lunatic regime of Kim Jong-un.

The second reason is Trump’s approval of the second freedom-of-navigation exercise this year through the disputed areas of the South China Sea.

The third reason, and just as serious, is economic. After all, global economic co-operation was the foundation of the G20.

Trump will come to the G20 today with trade equally on his mind. And the issue at front of mind is the alleged dumping by China of cheap steel on the global market.

Trump, who has already said the US now will seek only bilateral trade deals, is just as likely to now use anti-dumping measures against China.

Speaking of dumping, there is also the issue of Trump and Vladimir Putin being in the same bugged room.

But the other and equally critical relationship orbiting around this meeting is that of Britain and Europe.

There will be a new French President sitting at the table next to a German Chancellor facing re-election and a very shaky new British Prime Minister.

Brexit will also have a seat at the table for the first time, as far as the leaders of the European members will be concerned, and France and Germany will be hard pressed to contain their enthusiasm to try to embarrass the US over the Paris climate change agreement.

Australia has and does play a key role in the G20. But it is sometimes wise to know one’s place in the world, as Julia Gillard discovered in 2012 at the G20 in Mexico when accused of lecturing Europe on economics.

This G20 will be all about Trump and anyone Trump has an issue with.

As one insider suggested, this may be one of those G20s where the Prime Minister might be better served just sitting up the back and comparing hairstyles with his Canadian mate.

There is no shame in hiding.