World leaders are supposed to present a united face at the annual G7 summit of powerful countries. But for the second year running, Donald Trump made sure their rivalries were on show for all to see.
For much of the media the story is one of right wing populists vs sensible “centrist” politicians of the European Union (EU). It’s an alluring analysis for liberals and some on the left.
On the face of it, the G7’s big disagreements over the burning Amazon rainforests, the Iranian nuclear deal and the trade war between the US and China confirm their take.
Trump, a well-documented climate change denier, isn’t bothered about the Amazon. After all, his ally—far right Brazilian president Jair Bolsonaro—gave the green light for big business to intensify the destruction of the rainforest.
Both are countered by centrist French president Emmanuel Macron. He threatened to block the EU-Mecosur Free Trade Agreement—which would remove tariffs between the EU and Brazil, Uruguay, Argentina and Paraguay—unless Bolsonaro took more decisive action.
But this is where the liberals’ supposed difference with Trump and Bolsonaro falls down.
German chancellor Angela Merkel was happy to make all the right noises about the Amazon last month. She threatened to withdraw German aid for persevering the rainforest unless Bolsonaro agreed to tackle deforestation.
But when Macron upped the stakes, Merkel pulled rank on him—proof that when the crunch comes, the interests of German capital trump those of the rainforests.
German big business relies on selling high-end industrial goods, and Brazil is an increasingly important trading partner. In 2018 exports to Brazil were worth almost £9 billion, an increase of over 10 percent on the previous year.
France has much less economic skin in the game.
Merkel’s pronouncement means Macron and the rest of the EU are unlikely to back up their words with action.
The whole episode is proof that the EU is not a group of states that cooperate on an equal footing. It is a regional capitalist block, with German economic muscle at its core. That power helps member states compete with larger rivals on the world stage. But it also means that the interests of German capital dominate the EU and determine many of its political priorities.
The second disagreement at the G7—Trump’s trade war with China—further shows the centrists’ hypocrisy.
Merkel has made a lot of Trump and China slapping huge tariffs on one another’s products. But the EU is itself a huge protectionist outfit.
The disagreement between the EU and the US is not about principle. Again, it’s all down to profits.
While Chinese growth is officially at 6 percent, the reality is much more grim. Industrial production hit a 17 year low in July, and US tariffs on steel and other manufactured goods are making the situation worse. China’s currency, the yuan, sunk by around 4 percent in August to its lowest point in more than 11 years, making imports more expensive.
This poses a particular problem for Germany, which sells large amounts of advanced machinery to Chinese firms.
And the problems facing Chinese capitalism risk triggering a wider global slowdown, with indications that it could be deeper and longer than in 2007-08.
Trump was one of the political aftershocks of the last crisis, but it was the centrists that opened the door to far nastier right wing forces.
Merkel and Macron are presented as a bulwark against Trump. But they are the ones who pushed through punishing austerity and stoked racism against migrants and Muslims. And it’s their system that means the planet is burning, including large-scale deforestation in the Amazon.
Right wing thugs, such as Trump, are dangerous outgrowths of the crises of capitalism and pose as a solution.
But when liberals look at the G7, they hanker for a return to business as usual. That’s not possible or desirable. And defending a decaying status quo that’s failed working class people is no way to beat the right.
Fighting for a socialist alternative that puts people and planet first is our best chance.