At the Congress of Vienna in 1815 the delegates danced almost as much as they negotiated. As the Prince de Ligne put it: “The congress dances a lot, but it doesn’t make progress.” The dancing was a distraction. What mattered was that the monarchs of Europe — or, to be precise, their ministers — established a new order in Europe. After the upheavals of the French Revolution and Napoleon’s short-lived and unruly empire, five great powers combined to limit the threats posed to monarchy and aristocracy by liberalism and nationalism.
It was not a perfect order, but it made the 19th century a great deal more peaceful in Europe than the 17th, the 18th or the 20th. Actually, the congress did make progress.
Something similar can be said about this weekend’s meeting of presidents, prime ministers and central bankers in Buenos Aires: the G20 dines a lot, but it doesn’t make progress. In reality, it matters little whether Donald Trump rekindled his bromance with Xi Jinping last night or poured a bowl of soup over his head. The real question is: will the G20 change the balance of power in the world?
Trump’s critics are ready with their answer. In a pre-emptive strike, my old friend Fareed Zakaria argued last week that the summit would represent “peak America”. He wrote: “Nothing animates the Trump administration more than its opposition to multilateralism of any kind.
“And so, as the world gets more chaotic, the forces that could provide order are being eroded. And as is so often the case, China simply watches quietly and pockets the gains.”
As I said last week, we’re certainly beyond peak Trump. But peak America?
Let’s remind ourselves when and where all this “G” business began. It was 45 years ago — on March 25, 1973 — that the US secretary of the Treasury, George Shultz, met his counterparts from Britain, France and West Germany in the White House library. That group added Japan soon afterwards and Italy in 1975, by which time two of the original participants (Helmut Schmidt and Valéry Giscard d’Estaing) were heads of government. In 1976 Canada joined to produce the G7.
Not until 1994 was Russia represented at such meetings, only to be ejected in 2014 after the annexation of Crimea. Not until 1999 was the G20 created to provide a more representative group of big economies. It’s a motley crew. The EU is represented in its own right; Spain, Holland and Switzerland are excluded, despite being top 20 economies, to make way for the EU, Argentina and South Africa. Yet a clear majority of participants — 16 — are democracies. The autocracies — China, Russia, Saudi Arabia and Turkey — are there only because they have signed up to the various global institutions created by the US and its allies after the Second World War.
True, China would very much like to exploit Trump’s personal unpopularity with other world leaders. Under Xi, the People’s Republic has mounted a highly ambitious effort to expand its global influence, not only by exploiting its economic power through trade and investment agreements, but also by attempting (in the words of a startling report published last week) “to penetrate and sway — through various methods . . . [best] summarised as ‘covert, coercive or corrupting’ — a range of groups and institutions, including the Chinese-American community, Chinese students in the United States and American civil society organisations, academic institutions, think tanks and media”. Such efforts are not confined to the United States.
The free world is waking up to this, and with good reason. I’ll believe it’s peak America when China signs a trade pact with two other G20 members that has a clause comparable to the one in the new US-Mexico-Canada agreement (USMCA) — signed on Friday — which states that if one of the three partners enters a free trade deal with a “non-market” country, the others can exit USMCA and form their own bilateral trade pact. The non-market target of that clause is of course China.
Though Argentina is the host of this year’s G20, the biggest Latin American economy by far is Brazil. You will look in vain for evidence of peak America in Sao Paulo, where I spent most of last week.
Northern hemisphere media coverage of the right-wing populist Jair Bolsonaro’s election victory in Brazil in October has been overwhelmingly negative, focusing on his military background, his inflammatory language and his political resemblance to Trump. “Jair Bolsonaro’s climb to power has been marked by divisive rhetoric and offensive speech,” tut-tutted The New York Times. “Our planet can’t take many more populists like Brazil’s Bolsonaro,” lamented The Guardian. “How did a far-right, pro-torture, dictatorship-praising populist become Brazil’s president-elect?”
In truth, the resemblances between Bolsonaro and Trump are superficial. Both men certainly expressed socially and culturally conservative sentiments that had long been taboo in elite political circles. Both directed their fire at corrupt and failing political establishments. And both certainly understood better than their opponents how to exploit the political power of social media. But there the resemblances end.
First, Bolsonaro’s focus is on law and order, not immigration. Brazil saw more than 60,000 murders last year, as many as China, the US and Mexico put together. Second, Bolsonaro has joined forces with the Chicago University-trained free-market economist Paulo Guedes, whereas Trump’s one and only principle is protectionism. Bolsonaro’s vision is of a country rejuvenated. By contrast, Trump has appealed to the nostalgia of older voters.
The incoming Brazilian government is committed to fiscal consolidation, the privatisation of state companies, tax simplification and market liberalisation. This is the kind of economic reform Brazil desperately needs. It has the ninth-largest economy in the world, but ranks 125th in the World Bank’s ease of doing business index, behind Iran. What Guedes is talking about hardly sounds like the Chinese model — more like Margaret Thatcher does the samba. And indeed Bolsonaro was openly hostile to China on the campaign trail, declaring: “The Chinese are not buying in Brazil. They are buying Brazil.” He even visited Taiwan.
All over the world, from big Brazil to tiny New Zealand, countries are having to choose sides as the Sino-American antagonism escalates from trade war to cold (or cool) war. It’s not such a difficult decision, however squeamish you feel about “Individual 1” (the codename special counsel Robert Mueller has given Trump). For the difference between Trump and Xi is that the former is the temporary representative of a constitutional democracy, while the latter is the emperor for life of a one-party state.
The G20 dined a lot in Buenos Aires rather than danced. Regardless of the diplomatic chatter, it didn’t signify peak America. Many people also thought America was over the hill when the G4 first met back in 1973 (another difficult year for the presidency). They were wrong then. They are wrong now.
Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford