Obama vs. Putin
In the final days before an expected military strike on Syria, U.S. President Barack Obama will be on Russian soil, lobbying world leaders to support U.S. plans for a targeted attack on the Assad regime.
Hosting the leaders of the G20 was supposed to be a point of pride for Russian President Vladimir Putin, but his support for Syrian President Bashar al-Assad and other actions of late have injected tension into Russian relations with the West – and the U.S. in particular.
The situation in Syria is expected to dominate the sideline discussions of the G20, where the official agenda is traditionally limited to economic files. Mr. Putin has emerged as a vocal critic of Mr. Obama, dismissing as nonsense U.S. intelligence reports that say Syria used chemical weapons on its people.
In case there was any doubt about the deterioration in relations between the two leaders, reports surfaced Tuesday that Mr. Obama would use some of his time in Russia to meet with human-rights activists.
Mr. Putin and Mr. Obama were originally scheduled to meet in Moscow before the G20, but the White House cancelled the meeting after Russia granted asylum to Edward Snowden, the former U.S. intelligence contractor who leaked embarrassing information to the media about American surveillance activities.
Mr. Obama has also been critical of Russia's controversial law banning gay "propaganda," an issue that continues to attract significant worldwide attention given that Russia is also host of the Sochi Winter Olympics in 2014.
Georgiy Mamedov, the Russian ambassador to Canada, insists a meeting between the leaders will end up taking place place in St. Petersburg. "I am absolutely certain that they will talk," he said after a recent speech in Ottawa.
Jeff Sahadeo, director of Carleton University's Institute for European, Russian and Eurasian Studies, said Mr. Putin is becoming increasingly unpredictable, creating uncertainty not seen in more than two decades.
"We don't know where Putin is going to go," he said. "It's the most uncertain the relationship between Russia and the West has been really since the era when we had the coup and the unclarity as to whether Russia was going to return to communism or not during the glasnost years."
Mr. Obama's actions, said Mr. Sahadeo, will play into Mr. Putin's domestic rhetoric, in which he portrays Russia as an outsider that will never be accepted by the West.
"President Putin has decided to use the U.S. as a support for his internal political agenda – an enemy to define his own strengths against," he said. "It'll play into Putin's hand."
Mr. Obama's decision to delay any military strike on Syria until he requests support from Congress next week adds new importance to the G20 summit. The G20 has traditionally focused on economic issues, but the situation in Syria cannot be ignored.
Canada and several other G20 nations announced Tuesday that foreign ministers would attend the summit for sideline discussions on Syria. Canada's Foreign Affairs Minister John Baird, along with Finance Minister Jim Flaherty, will join Prime
Minister Stephen Harper in St. Petersburg.
The G20 includes all five permanent members of the United Nations Security Council: China, France, Russia, the U.K. and the United States. China and Russia have repeatedly blocked Security Council sanctions on Syria, meaning Mr. Obama may turn to NATO or some form of coalition-of-the-willing to support his plan for military strikes aimed at
weakening the Assad regime.
Approving a plan to fight global tax evasion is high on the official agenda. It could also be a rare subject on which Russia and the U.S. can agree. The Russian government has long been concerned by Russian oligarchs taking their money offshore, depriving the government of much-needed tax revenue. Some of Russia's anti-corruption efforts have also been directed at the President's political opponents, including the imprisonment of Mikhail Khodorkovsky.
Still, the concern that wealthy individuals and corporations can avoid taxes through creative accounting is one shared by the entire G20.
The Organization for Economic Co-operation and Development, which has crafted a proposal for G20 leaders, announced last week that China has signed on to the plan, bringing all G20 nations on board. If approved by the G20, it would allow tax authorities to automatically share banking information, allowing participating countries to find out if their citizens or corporations have undisclosed offshore bank accounts.
Debt and deficit targets
Prime Minister Stephen Harper and German Chancellor Angela Merkel have been among the hawks on this topic at the G20 table. When Canada set the agenda during the 2010 summit in Toronto, Mr. Harper ensured that the G20 made specific pledges to cut deficits. The 2010 communiqué called for deficits to be cut in half by 2013 and for countries to place their debt-to-GDP ratios on a sustainable footing by 2016.
An accountability report on those pledges is expected this week and officials are working on a new set of targets.
Moves to improve global trade are on the official agenda, but most of the activity will take place on the sidelines, where the G20 players are immersed in several sets of regional trade talks.
The most urgent and ambitious is the Trans-Pacific Partnership, which the U.S. hopes to conclude this year. Canada is part of the TPP talks, though it joined late.
The TPP negotiations are not as far along as free-trade talks between Canada and the European Union. A deal there was thought to be in reach in June, yet never materialized. Negotiators took a break in August and are set to resume. Breaking the final impasse will require decisions by political leaders. The G20 presents a rare opportunity for high-level face-to-face chats between Mr. Harper and the Europeans about the remaining hurdles.
Discussions over capital flows are the bread and butter of the G20. Policy decisions by the G20's largest economies – particularly the U.S. – can have dramatic consequences for the finances of other nations. The G20 was created in order to talk out these kinds of issues.
When the U.S. started pushing down long-term interest rates through a bond-buying scheme called quantitative easing, investors flooded emerging markets with cash in a hunt for higher returns. The so-called "hot money" had a dramatic impact on currency markets, spurring threats of international currency wars.
Now that the U.S. Federal Reserve is hinting it will wind down its bond-buying plans, that hot money is flowing in reverse. India – where the rupee has lost about 20 per cent of its value since May – wants the G20 to address these destabilizing flows.