Japan hosts G20 summit

There is an important gathering of world leaders now being hosted by Japan in Osaka. With all the hot button issues the world is facing now, it is good to know we have Japanese Prime Minister Shinzo Abe acting as the adult in the room.

“On June 28,” the Japanese PM wrote in a piece for Project Syndicate, “I will host the 2019 G20 summit in Osaka. Our agenda will focus on three key issues, each of which is particularly important for Asia.

 “The first agenda item concerns what I believe is the most important challenge of our times: working to maintain and ultimately strengthen the international order for free and fair trade.

“For Asia’s leaders, this means forging the RCEP, or the Regional Comprehensive Economic Partnership, an advanced free-trade agreement between the 10 members of the Association of Southeast Asian Nations (ASEAN) and the six Indo-Pacific states (Australia, China, India, Japan, South Korea and New Zealand).

“Those discussions have gone on for some time. We must now make a dash toward the goal line.”

The need to finally get RCEP going has indeed become urgent in the light of the trade war inflicted by President Trump on China and its repercussions for the rest of the world. RCEP could mitigate the negative impact of Trump’s disruption to our economies.

The Japanese PM went on to cite other concerns which he hopes will be seriously taken up by the summit.

“The second item on the agenda concerns the digital economy. Digitalization of the economy has enabled unique and unprecedented business models, but it has also brought new challenges, such as double non-taxation for multinational companies. We can resolve such issues only through international cooperation.

“The data traveling instantaneously around the world are indifferent to national boundaries. I believe that the economic and social impact of such data will rival, even surpass, the roles that petroleum and the internal combustion engine played in the 20th century.

“By its nature, data easily overcomes physical obstacles. Networked, its effects and advantages multiply and then multiply further. Conversely, should the equivalent of even a single closed-off room appear anywhere, the resulting losses extend to the entire network.

“Japan is advocating a system of ‘Data Free Flow with Trust,’ or DFFT, an approach that attempts to allow the free flow of data under rules upon which all can rely. So let us prepare rules that allow the digital economy’s benefits to spread to everyone in Asia and around the world. The process for doing that is what we call the ‘Osaka Track,’ which we hope to launch at the upcoming summit.

“It goes without saying that points one and two – trade and data – are inseparable from reform of the World Trade Organization. A quarter-century has passed since the WTO was established. During that time, the world economy has changed at amazing speed. But the WTO has failed to keep up, and the adverse effects of this are becoming increasingly apparent.

“What should we do to make the WTO relevant again as a guardian of free and fair international trade?

“The great supply chains driving the global economy for many years now are anchored in the ASEAN region. The region’s economies have benefited from an environment in which people and goods flow in and out freely. It is precisely this freedom that accounts for ASEAN’s dynamism and growing prosperity.”

Indeed, the revolution spurred by digital innovations must be recognized by governments. It is a force for good, for evil and for freeloading tech giants like Facebook and Google among others.

The disruption caused by technology is good, but we must address impact on economies, businesses and labor. Otherwise, a more dangerous social disruption can bring about bloody conflicts in a world where other challenges are already quite daunting.

This brings us to the next concern of the Japanese PM.

“The third issue for the Osaka summit is the importance of innovation in tackling global environmental challenges. The goals outlined in the Intergovernmental Panel on Climate Change’s ‘1.5?C report’ are not achievable through regulation alone. Disruptive innovation that flips something negative into something positive will be the key to realizing the world’s climate goals.

“Consider carbon dioxide, which in recent years has been treated entirely as a villain. But how wonderful would it be if CO2 were to become a ‘resource’ available at the very lowest price and available in the greatest abundance!

“Innovative technologies like artificial photosynthesis are certain to make such dreams a reality one day. In Osaka, I want the G20 to confirm the importance of such innovation.

“And in October, Japan will hold a Green Innovation Summit, bringing together under one roof leading researchers and representatives of industrial and financial circles from all around the world. We hope to tap the world’s wisdom and usher in a sustainable future with one great push.”

What a thoughtful and refreshing introduction to a summit meeting by a world leader ever. It is just as well because media focus will most certainly be elsewhere… on a potential meeting between Trump and Chinese President Xi Jinping. PM Abe will have to work hard to keep the summit from being seen as a circus, with world leaders trying to outsmart each other.

With Europe and Britain in political disarray, China and the US engaged in a deadly economic combat, the Japanese PM will have to forcefully assert his country’s leadership because of this failure in leadership elsewhere in the world.

As Prime Minister Abe pointed out, this summit is coming at the dawn of a new era – Reiwa (“beautiful harmony”) – in Japan. 

“The ‘rei’ in the name ‘Reiwa’ has such a nice ring to it,” the PM observed… “the pronunciation was the same as the word ‘ray’ in such phrases as ‘a ray of hope’ or ‘a ray of sunshine.’

“I firmly believe that a self-confident Japan is a Japan that is well-suited to contribute to creating Asia’s future.”

We sure hope so.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco