On Tuesday and Wednesday of this week, Berlin will see a protest against Donald Trump’s policies. Unlike most Berlin demonstrations, however, this will not feature crowds on the street. Instead, more than 2,500 representatives of business, politics and science from the countries of the G20 group will gather in a venue more usually the scene of pop concerts and sports events.
The gathering, known as B20, or “Business 20,” has been organized by leading German business organizations, and is intended both as a discussion forum and a highly visible show of support for global free trade and climate protection. The event is associated with Germany’s presidency this year of the G20 group, which will hold its annual gathering of heads of government in Hamburg in July.
Although the world economy is experiencing robust growth, leading German companies are alarmed by the recent rise of populist political movements around the globe, as well as moves towards economic nationalism, above all on the part of the new American administration. Leading executives are concerned that political risks now pose a major threat to continued economic prosperity, including high unemployment in many economies, low productivity growth and potential social problems resulting from new waves of digitization. Looming over all this is the danger of protectionism and economic conflict, which has the potential to paralyze the world economy.
All B20 representatives, whether from Asia, Europe or America, are completely in agreement that the Paris Agreement on climate change must be implemented. Carsten Kratz, co-chair, B20 Business Dialogue
“The world has moved into a phase of disorder, as seen in Brexit, problems in Turkey and many statements coming out of Washington,” Jürgen Heraeus, the chair of B20, told Handelsblatt.
This made the meeting of world economic leaders all the more crucial, he said: they intend to make an appeal to heads of government. “Among global business groups, there is a large degree of agreement that globalization brings enormous advantages to the majority of people,” he said. Free, rule-based trade was very much in the interests of the United States, he added.
Alarm among German business leaders at threats to free trade and global economic integration dates to before Mr. Trump’s election. They were taken by surprise at strong popular opposition in Germany to the Transatlantic Trade and Investment Partnership, or TTIP, a wide-ranging proposed trade deal between the United States and the European Union. They repeatedly urged politicians in Berlin to do a better job of selling free trade to a skeptical public. Shortly after his election, Mr. Trump put TTIP negotiations on hold, and tore up the Trans-Pacific Partnership, or TPP, a similar deal covering countries of the Pacific Rim.
Since the Brexit referendum and Mr. Trump’s election, a number of senior executives have called for a strong defense of European integration and of free trade. Shortly after Mr. Trump’s election in November, Oliver Bäte, chief executive of insurance giant Allianz, told Handelsblatt that “opposing populism requires strong leadership from liberal and democratic elites.” In a later commentary for Handelsblatt, Siemens CEO Joe Kaeser warned that “populism, nationalism and protectionism narrow viewpoints, promote intolerance and hinder global trade and cooperation.”
The B20 event marks the largest attempt yet on the part of German business to collectively oppose populism and protectionism. The gathering is jointly organized by the three largest German business organizations – the BDI, an umbrella group of associations covering some 100,000 companies, the Association of German Chambers of Commerce and Industry, or DIHK, and the Confederation of German Employers' Associations, or BDA. The event’s main sponsors include Allianz, Siemens, BASF, Deutsche Bank, Bayer, L’Oréal, and other large companies.
Leaders at the B20 will highlight the economic benefits of free trade, but link these to concrete issues likely to appeal to the broader public. Elmar Degenhart, chief executive of car component and tire maker Continental, said: “The division of labor and free exchange of goods protect resources, create prosperity and support job creation. Protectionist barriers endanger human lives.”
He pointed out that car accidents cause 1.3 million injuries worldwide. “Without free trade, the number of victims will only grow,” since lifesaving technology would be kept out of many markets. “It is the joint responsibility of politicians and business to make zero traffic deaths a reality,” he said.
The B20 will also highlight climate change and global poverty as problems to which free trade presents the solution. Carsten Kratz, head of BCG Germany and a co-organizer of the event, told Handelsblatt: “We are completely in agreement that the Paris Agreement on climate change must be implemented. All B20 representatives, whether from Asia, Europe or America, are making this appeal to governments.”
Of the G20 states, only the United States was opposed to the climate deal, he added. The B20 would also speak in favor of supporting infrastructure development and small business in Africa, to make sure the benefits of globalization were experienced on that continent, he said.
The free flow of information is just as much a concern as the free movement of goods, especially with production chains increasingly dependent on cross-border integration of data. “There is no alternative to free and fair competition. This is especially true in the digital age, so we need clear rules and agreements,” said Klaus Rosenfeld, the head of the automotive supply group Schaeffler.
“Free information traffic is as crucial to economies as free movement of goods. Barriers impede growth,” said Sabine Bendiek, head of Microsoft Germany, who leads a B20 working group on digitization.
Chancellor Angela Merkel, who will participate in this week’s conference, used her weekly podcast to push the G20 to do more to raise living global standards. “Fair competition” was the best way to do this, she said. As president of the G20, she added, she was looking beyond growth to other issues, to ensure that “increased participation of women, as well as sustainability, climate protection and health” would also play a central role in this year’s G20.
Jan Hildebrand leads Handelsblatt's financial policy coverage from Berlin and is deputy managing editor of Handelsblatt's Berlin office. Thomas Sigmund is the bureau chief in Berlin, where he directs political coverage. To contact the authors: [email protected], [email protected]