5 things to watch for at the upcoming G-20 meeting

Key Points
  • President Trump and President Putin will meet face-to-face for the first time.
  • Defense and security will be high on the agenda following a series of terror attacks and North Korea's continued testing of missiles. 
  • German Chancellor admits ahead of talks that there is likely to be disagreement between leaders.
Germany Chancellor Angela Merkel speaks to the press during a press statement
Michele Tantussi | Getty Images

This weekend marks the 12th annual G-20 meeting, bringing together the heads of state of the world's 20 major economies in Hamburg, Germany. 

Set against a backdrop of growing geopolitical tensions, and with a series of new faces due to attend, CNBC takes a look at what can be expected. 

1. Defense

In this handout photo released by the South Korean Defense Ministry, U.S. M270 Multiple Launch Rocket System firing an MGM-140 Army Tactical Missile during a U.S. and South Korea joint missile drill aimed to counter North Korea's intercontinental ballistic missile test on July 5, 2017 in East Coast, South Korea.
South Korean Defense Ministry | Getty Images

Given the developments that have emerged from North Korea in recent days, defense will have a renewed urgency on G-20 leaders' agendas.

Japan and South Korea will be eager to see the U.S.'s commitment to Article 5 of the NATO treaty, which guarantees collective defense from members in the case of an attack. But with the U.S. now potentially a direct target of North Korean President Kim Jong-Un's increased military capabilities, it is likely to want to discuss increased defense - and potentially new military measures - against the totalitarian regime.

"An ICBM (intercontinental ballistic missile) launch crosses a line that (President) Trump had drawn as inviting a robust U.S. response,"  Inderjeet Parmar, a professor at the Department of International Politics at City, University of London, told CNBC via email.

"It means that more measures might result from talks at the G-20 meetings in Hamburg from China and Russia."

The talks will come at a time of ongoing tension for NATO members with claims from U.S. President Donald Trump that EU members must do more to bring their defense contributions in line with those of the U.S.

NATO Secretary General Jen Stoltenberg told CNBC last week that the success of NATO is just as important to the U.S. as to other member states and insisted that contributions from non-U.S. members are expected to grow 4.3 percent in 2017.

2. Fighting terrorism

A major police and emergency services operation with firearms officers in attendance
Paul Davey | Barcroft Images | Barcroft Media | Getty Images

Combating terrorism will be central to talks as leaders look for new ways to fight the increasingly unpredictable attacks which have taken place over recent months and years.

Europe, in particular, has come under pressure from a series of attacks which have been conducted by Islamist extremists, and although leaders have stepped up their security measures, they will be focused on implementing new counter-terrorism measures. 

On Tuesday, French President Emmanuel Macron announced that he would lift the country's state of emergency, in place since a terror attack on Paris in November 2015, by November 1, 2017. He also set out a five-year military program to be adopted in 2018 and new laws to strengthen the country's anti-terrorism arsenal.

Last week, NATO members met to discuss increased security measures, including continued efforts to combat the so-called Islamic State. 

3. Trump meets Putin

Russian dolls in the likeness of Russia's president Vladimir Putin and US presidential candidate Donald Trump in a souvenir shop.
Mikhail Pochuyev | TASS | Getty Images

This weekend marks a number of hotly anticipated first encounters between world leaders, but chief among them will be that of Trump and Russian President Vladimir Putin.

The pair's first face-to-face meeting, due to take place on the summit's sidelines on Friday morning, will be closely watched at a time when ties between the two countries have grown increasingly fraught after Russian interference in the U.S. election campaign and continued conflict in Syria. 

The Kremlin said on Wednesday that the meeting would be used as an opportunity to establish an "effective working dialogue" between the two world leaders. 

"This is the first meeting, the first time the two presidents will get acquainted - this is the main thing about it," Kremlin spokesman Dmitry Peskov told a conference call with reporters.

"The expectation is that a working dialogue will be established, which is vitally important for the entire world when it comes to increasing the efficiency of resolving a critical mass of conflicts."

The two premiers have so far had a tumultuous relationship. Trump said in April that U.S. relations with Russia were at an "all time low" after the countries came to a head over a missile strike in Syria. However, John Studzinski, vice chairman of The Blackstone Group, told CNBC Wednesday that the meeting could provide an opportunity for Trump to play to his strengths and warm hereto frosty relations between the two countries. 

"Where he has one-on-one interactions, the way he's had with many countries, like Japan for example, it does make a big difference," Studzinski said.

However, the meeting is likely to be brief on details, and the Kremlin forewarned on Wednesday that it would unlikely allow time for Putin to fully outline his analysis of Ukraine, which has been in a state of crisis since the annexation of Crimea in 2014. 

Trump is also due to meet with German Chancellor Angela Merkel on Thursday as part of a number of one-on-one meetings the German premier will hold with global leaders ahead of the summit. This will be the first time the two world leaders have met since a rather frosty encounter at the White House in March when Trump seemingly refused to shake Chancellor Merkel's hand.

4. Trade 

Employees work on the body shell of an automobile on the production line inside the Suzuki Motor Corp. plant in Esztergom, Hungary
Akos Stiller | Bloomberg | Getty Images

Trade will also be a hot topic on the agenda as world leaders try to strike a resolve on their differing approaches to the movement of goods.

As with May's G-7 meeting in Taormina, Italy, Trump will likely find his protectionist policies at odds with other member states who favor international economic cooperation.

Merkel outlined on Wednesday that she was prepared for "difficult negotiations" between G-20 members, while Chinese President Xi Jinping signaled that free trade would continue, even if Trump stood on the sidelines. Since then, Germany's Foreign Minister Sigmar Gabriel has spoken out about his concerns over a potential trade war between the U.S. and the EU. 

Trump has previously come to loggerheads with Germany over the latter's trade surplus, which his administration has claimed is the result of currency manipulation. The clash has come as the EU is in the midst of talks with both China and Japan to establish free trade agreements.

Meanwhile, U.K. Prime Minister Theresa May will be looking to test the waters for establishing a series of new bilateral trade agreements with the world's leading economies once the U.K. leaves the EU. 

The International Monetary Fund on Wednesday urged G-20 leaders to avoid "myopic" nationalistic policies and to work together in agreed forums to resolve their trade and economic differences.

5. Climate change

Alex Wong | Getty Images News | Getty Images

Environmental issues will also come to the fore following Trump's decision to withdraw from the Paris climate accord.

The move attracted widespread consternation from Europe and Asia, as well as individual U.S. states, and G-20 leaders will be under renewed pressure to persuade the leader of the world's largest economy of the merits for increased efforts to combat climate change. 

Trump announced in June that the U.S. was "getting out" of the agreement signed by 195 other member states. 

Ahead of this weekend's summit, leaders including Britain's May have said that they will challenge Trump over his decision. However, based on this year's somewhat underwhelming G-7 meeting, analysts see little sign of a major shift in position from the U.S. president. 

"There was clear disagreement over important issues at the G-7 summit in Taormina a few weeks ago. Consequently, we expect few clear actions from this larger and more important meeting," Neil Dwane, global strategist at Alliance Global Investors, said in a note. 

"Europe and the United States now have different opinions on three crucial topics. This former axis of influence disagrees on climate change (specifically the Paris agreement), free trade and the extent to which financial markets should be regulated. The U.S. finds itself increasingly isolated in the G-20 for its position on the first two, which is a novelty."

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