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Chinese President Xi Jinping and his US counterpart President Donald Trump hold the second round of talks in the Mar-a-Lago resort in Florida. Photo: Xinhua

Trump and Xi: Sherpas, not summits, make the difference

At several other meetings planned for the two leaders this year, key policy wonks could help Beijing and Washington build stronger-than-ever bilateral trade relations

Predicting the outcome of major summits is not an exact science. And the Mar-a-Lago huddle between Chinese President Xi Jinping (習近平) and US President Donald Trump is no different.

Summits, as Henry Kissinger would say, embody “high politics”, by way of the history-altering dynamics they unleash. In case of Mar-a-Lago, a 100-day programme has been rolled out to improve Sino-US trade, four channels have been formed to discuss security, economic policy, and cultural and people-to-people exchanges. And Xi and Trump have agreed to meet again this year. Significant, but could they be the stuff history is made of?

World leaders take part in a working dinner at the G7 summit. Chinese President Xi Jingping and US President Donald Trump seemed to follow G7-like protocols at their recent meeting at Mar-a-Lago. Photo: AFP

Modern summitry is the child of the G7 gatherings. When the US delinked itself from the gold standard in the aftermath of the Vietnam war, it found itself in an enviable position where it could print more money and exponentially strengthen its credit-creation ability. With a sleight of hand, the Nixon administration thus sharply reversed the America’s much-weakened finances after the war.

How Trump-Xi talks in Mar-a-Lago were influenced before a word was said

But a free-floating greenback was a risky move, especially at a time when the president was also faced with the Watergate scandal. Sensing trouble, Nixon’s successor Gerald Ford convened what was then known as a “Library Contact Group” in the basement of the White House in 1974. According to Robert Putnam at Harvard University, the goal was to liaise with officials in the West to keep the policies of the West, and Japan, aligned.

The international interest-rate regime was made affordable to permit countries like Canada, the then West Germany, the United Kingdom, Italy, France and Japan to work with the US. They could all borrow the US dollar and their respective currencies without suffering wild currency gyrations.

A four-way handshake followed a summit ceremony at Geneva. Soviet foreign Minister Eduard Shewardnadze, left, shook hands with US President Ronald Reagan as Soviet leader Mikhail Gorbachev, second from left, shook hands with US Secretary of States George Shultz. Photo: Reuters

More precisely, the meetings served to augment and buttress the role of the US as a stable Western power in its face-off with the Eastern Bloc led by the Soviet Union. These regular contacts and meetings at the White House morphed into the Group of 7. This G7 would go a long way towards shoring up America’s financial standing despite the oil crises in 1973 and 1979. The G7 also helped the US and the world weather the debt crisis in the developing world in the 1980s.

Xi-Trump Mar-a-Lago summit: beyond sweet nothings

When Ronald Reagan defeated Jimmy Carter in a landslide in 1980, his Secretary of State George Shultz continued to rely on the G7 to maintain a certain modicum of US world order until the Reykjavik Summit in 1985. While not financial in nature, the world was clearly in crisis again as the nuclear rivalry between the US and Soviet Union seemed to be reaching apocalyptic proportions.

But in the mid-1980s, Reagan and his Soviet counterpart Mikhail Gorbachev agreed to de-escalate their strategic rivalry, leading to the end of cold war in 1989, eventually leading to the dissolution of the Soviet Union in 1991.

Chinese President Xi Jinping attends a working luncheon hosted by US President Donald Trump at the Mar-a-Lago resort in Florida. Photo: Xinhua

What has traditionally made the G7 summits distinctly effective, and often history-altering, is not the alliance per se, but the “sherpa” system that works behind the scenes. Each of the leaders are led by their senior officials, or the “sherpas”, who quietly help in keeping the flock together long after the pomp and pageantry of the summits end. Because, the key to any successful summit is the implementation of what the leaders agree on.

When one looks at the Xi-Trump summit, it is clear that both sides had, at the very least, acknowledged the importance of the sherpa system at the heart of G7. They agreed to look into bilateral trade and create new channels of communication. By retiring the Strategic and Economic Dialogue (SED), bequeathed to him by his predecessors, Trump has indicated he is ready to turn over a new page. And fortunately, although China has never been a member of the G7, it understood the importance of the sherpa system enough to agree to the 100-day trade programme and the four mechanisms.

A Chinese J-11 fighter jet is pictured on the airstrip at Woody Island in the South China Sea. There is potential for cooperation between the United States in China if the nations can negotiate tensions in the area. Photo: Reuters

With three formal and informal Sino-US summits in the offing this year, plus new mechanisms to stabilise their relationship, the world appears headed into an informal “G2” world, even though neither side openly talked about it. That would easily make Mar-a-Lago a history-altering event, provided how this new power architecture is whipped into shape by key policy wonks.

The true essence of the summit, and the ones coming after, will depend on these sherpas. If they are allowed to work uninhibited – and Trump doesn’t shoot of Tomahawk missiles at dinners and China keeps its calm over the South China Sea – their next summit could indeed take the relationship to new heights.

Phar Kim Beng is president of Echo Strategic Insight