The Pittsburgh Post-Gazette and PNC Financial Services put on a show last night at the new August Wilson Center in Downtown Pittsburgh. What's going to happen at the Pittsburgh Summit?
Susan Schawb is a former U.S. trade representative. She pointed out that at the University of Maryland, of which she is very proud, half of the public policy students take part within the walls of these economics summits and other half of take part outside in protest-type arrangements.
She personally spoke out against "beggar-thy-neighbor" trade policies among the major countries -- an argument against import tariffs (taxes on imports for whatever reason) and export subsidies, especially "self-defeating tit-for-tat" ones that "exacerbate" problems. Free trade, free trade. And "everyone is sinning" on this score -- she says it "negatively impacts the trade of 120 countries" -- but it is incumbent on the U.S. to "step up to a position of leadership." Congress in particular needs to step up, but advanced developing countries also need to determine "what is the contribution they should make?"
Schwalb finished her opening by "guaranteeing" the leaders would call this round of the G-20 "a success", to some chuckling.
James Dobbins, director of the RAND International Security and Defense Policy Center, echoed Ms. Schwab in stating that these meetings are "supposed to be about economics". Certain drama can distract from that, although that is usually the unexpected -- tension in the Balkans or similar. "For the organizers of these meetings, drama is a bad thing," so there generally is not any.
As to extraneous drama that distracts form trade, "the recession is over" was the mantra of the day. "Some degree of self-congratulation is due", Dobbins said, but his prediction for the results of the Summit was only that" they'll hold another meeting" to more chuckles.
On that note, moderator David Schribman quipped, "So it's a job program for public officials" to real laughter.
Former Canadian chief finance minister Barbara McDougall volunteered that some of the G-20 countries are emerging, and some of them aren't exactly. The G-7 / G-8 expanded to twenty when "it was no longer appropriate as an informal world governing body", which she underscored that is what these G's actually is: an informal world governing body.
McDougall said China would be the "elephant in the room" at these fora, owing to their capacity to -- and she settled on this for lack of better words -- "make trouble". Also she said bluntly that "the U.S. and France don't like each other" and part of that was manifesting in that President Sarkozy is insisting on getting bankers' bonuses under control. She predicted he won't storm out, but there will be "language" in the outcome communique -- which "they are already writing as we speak", only with brackets for revisions.
She did mention that "financial institution reform" is important, and that it might be wise to take a look at "Islamic banks", who have some peculiar practices. Later on she said somewhat pointedly in the direction of former U.S. minister Schwab that the U.S. and Canada, as one another's #1 trading partner, should take a look at bankers' compensation together.
P-G Associate Editor Dan Simpson was the wet blanket in the room. He proffered all these crucial benchmarks for success of the G-20 Summit that had little to do with free trade and with what the rest of the panel would call "economics"; he wants the leaders to demonstrate that they're sure we won't slide back into recession, and wants "a model to get us away from debt". Also, Copenhagen (a December climate conference) needs to be taken seriously.
He did allow that as far as protectionism and tariffs go, it grates on the "raw nerves" of everyone involved. Schwab, again the U.S. trade rep, frequently returned to how although aid is being given, you get an immensely bigger bang for you buck out of trade.
Free trade free trade free trade. Free trade. Eliminate tariffs and subsudies. So healthful! So enriching and rewarding and stimulating in itself! Zarkozy is being dramatic and at least somewhat typically French with his stances on "issues", but he won't walk out, he'll just make noise and get some language written somewhere about something. Except Canada will probably be down for a lot of those antics, along with Germany and other countries without huge banking sectors and less to lose by fiddling with compensation structures to engineer wiser decision making.
I have many more notes and will probably spill them out later. If I have one criticism of the panel discussion it's that strangely that there were too many questions -- I would like to have seen the panelists go back and forth on some of them leisurely, instead of parceling one at a time out for one specific panelist at a time and then it's gone.