The G-20 meeting in Brazil and Latin America's alignment in the New Order

The G-20 meeting in Brazil and Latin America's alignment in the New Order

Mariana Morales^[1] , Carlos Madrid^[2] ,OBELA^[3]

Latin America is caught in the middle of a great power conflict. On the one side is Washington and on the other Beijing. At the G20 meeting, Xi Jinping played a leading role thanks to his ally Brazil. On the other hand, former president Biden went almost unnoticed since Trump had been elected and his policies were contrary to what was discussed in Rio de Janeiro.  Richard Little^[4]   mentions that there are two points of view in the balance of power: the adversarial, which refers to the manipulation of the distribution of power by a power in its favour in an anarchic international order, and the associative, which refers to cooperation. In this, international institutions play a major role. In this way the author sees the concept of spheres of influence where there is one dominant and one subordinate. In this article we will look at the alignment of Latin American countries with the great powers, and see which way the balance tips. 

Content of the declaration

The G20 agreements are not binding. The Rio summit in 2024 included proposals to tax the wealth of billionaires, a global alliance against hunger, strengthening climate change mitigation measures and reforming UN governance.  The resolutions are part of what Lula da Silva has pushed for since returning to the Brazilian government in 2023, and reflect his influence within the summit and the BRICS.

In the document "G20 Rio de Janeiro Leaders´  Declaration", the general agreements were set out.  One of the central themes, the global alliance against hunger and poverty, aims to strengthen supply chains in the face of food crises and to mobilise capital between countries. It also seeks to encourage lower-cost cash transfers, social programmes for school feeding, better access to microfinance and financing for developing countries to improve their food production and marketing capacity.

On climate change, the importance of meeting the Paris Agreement targets to limit temperature rise to 1.5 degrees Celsius, achieve zero global net greenhouse gas (GHG) emissions, promote climate neutrality and triple global renewable energy capacity by 2050 was recalled. The goals will be achieved through public and private financing to developing countries for their energy transition. It was not mentioned whether this will come only from developed countries, nor the amounts. Support for the outcome of the "Collective New Quantified New Target in Bakuwas reaffirmed " for financing emerging economies, which concluded that "developed countries will provide $300 billion per year until 2035". This is reminiscent of the failure of COP26 in Glasgow 2021, where support for developing countries was set at USD 100 billion per year. What is peculiar is that there is no talk of pollution and global warming, and how to tackle it, but of finances that are ultimately non-existent. In this mention there is no acknowledgement of the size of the fiscal deficits of the countries making the pledges and how they are financed.

On taxation Brazil proposed taxing billionaires: "With full respect for fiscal sovereignty, we will seek to cooperate to ensure that ultra high net worth individuals are effectively taxed".⁶ Progressive taxation was seen as one of the key tools to ensure more growth with equity and to meet the SDGs. According to the G20 Finance channel to implement: "a 2% tax on the wealth of the super-rich could generate resources of around USD 250 billion a year to be invested in addressing the social and environmental challenges of our time^.  

Brazil, China and the conflict within the G20

The Brazilian president spoke out against the deregulation of markets and the apology of the minimal state. He considered that after the 2008 crisis, neoliberal globalisation failed, as the recovery did not bring about a redistribution of wealth to those most in need.⁷ Furthermore, he stated in favour of international cooperation and given the context of "hegemonic disputes", he said, "The answer to the crisis of multilateralism is more multilateralism".^[5] The Gaza conflict has highlighted the ineffectiveness of the existing multilateral system, made with US money.

The summit also showed that since Lula's return, ties between the Carioca country and the Red Dragon have grown closer. In April 2023, the Brazilian president made his third visit to China. On that occasion, 15 governmental acts were signed and 32 business agreements were announced, in areas such as renewable energy, the automotive industry, agribusiness, green credit, ICT, health and infrastructure. At the G-20, Xi Jinping signed 37 new bilateral agreements with the host country, covering trade, FDI, manufacturing, mining, finance, science and technology, among others. Following the summit, the two countries announced that their relationship would become a Global Strategic Partnership, which implies a higher level of cooperation with fewer restrictions between the two countries, in areas such as trade, finance, infrastructure and technology.

In contrast, Argentina showed several dissents at the G20. During the presidential campaign in 2023, Milei said: 'I will not do business with China, I will not do business with any communist'. However, while in office he adopted a pragmatic stance in his relationship with the Asian power. At the summit the presidents of the two countries met and expressed their interest in expanding their existing trade relations. 

Although the Argentine government has promoted policies that differ from the final document, from ideological positions that diverge and are irreconcilable with those of Lula and Xi Jinping, Argentina's signing of the final document shows that it has opted for a realistic policy of international relations. Argentina's signature of the outcome document shows that it has opted for a realistic international relations policy. Milei later reaffirmed his disagreement with several of the agreed points, without any repercussions.

The US role was inconsequential. Biden   merely showed support for financing developing countries through multilateral banks to achieve the SDGs and address challenges such as pandemics, highlighted the financial contributions made by the US to the World Bank's IDA (International Development Association ), and the mobilisation of private capital through the Global Infrastructure and Investment Partnership, which is a project of the G-7. 

At his inauguration, President Trump said: "America will once again be a manufacturing nation, and we have something that no other manufacturing nation will ever have: the most oil and gas of any country in the world, and we're going to use it. In addition, he mentioned that he will end the Green New Deal, which is an agreement that merges economic approaches with renewable energy. Both statements along with the signed executive order to abandon the Paris Agreement do not subscribe to what was agreed at the G20. This context creates an atmosphere of polarisation ahead of the next G20 meeting (to be held in South Africa in 2025) where Washington will have to look for allies.

Finally, the most discreet participation was that of Mexico. With the country's president Sheinbaum returning after a 6-year absence, she affirmed the need to redirect resources from the arms industry to initiatives that promote sustainable development and climate change mitigation. Dr. Sheinbaum said that 700 million people in the world live below the poverty line and proposed allocating 1% of global military spending to the creation of a reforestation programme. Another proposal was to expand the Mexican programme "Sembrando Vida" (Sowing Life), which consists of reforestation to reduce CO2 emissions, to the rest of the world.

Figures 1 and 2 show the shift in the balance of global power and the growing economic importance of the BRICS. Their GDP accounted for 76% of the G-7 in 2010, while in 2023 it was 112%, so that their output surpassed that of the most advanced economies. Meanwhile, exports in the same period rose from 50% of those of the G-7 to 70%. The data show that the BRICS are an increasingly important player, capable of disputing the economic hegemony of the Western nations.

In conclusion, although the US maintains its hegemony, the G20 summit showed the weakness of the North in the group, as the resolutions are opposed to it. For its part, Argentina, a US ally, contrary to its alliance, signed the final declaration. This, together with the UN vote on the Cuban embargo, places the Southern country in its historic position of independence from Washington. Milei's subsequent disengagement, but with a view to closer commercial ties with Beijing, shows that his link with the US will be ideological and military, rather than commercial, which further dilutes US influence in South America and strengthens the presence of Brazil and China (who have agreed their strategic alliance) within the G20. The increased weight of the BRICS in global production is significant for the world order and the dispute between the Red Dragon and Washington, so tensions will continue.