Many leaders of the Group of 20 major economies on Friday expressed concerns over an escalating trade war between the United States and China, identifying it as a serious downside risk to the global economy, along with geopolitical tensions in the Middle East.
On the first day of their two-day summit in Osaka, the leaders assessed the status of the global economy while skepticism persists over whether they can jointly uphold the rules-based, multilateral trading system.
"Concerns were expressed by many countries about heightened trade tensions," a senior Japanese government official said.
The G-20 shared the need to promote global growth at a time of downside risks, the official added.
Japanese Prime Minister Shinzo Abe, hosting the summit, faces the task of projecting a united G-20 front despite disagreements over contentious issues such as trade and climate change.
The G-20 dropped its signature pledge to fight protectionism in the previous meeting last year in Argentina as U.S. President Donald Trump has pushed his "America First" agenda and shied away from multilateral arrangements.
"We should send out a strong message," Abe said as he opened this year's G-20 leaders' discussions.
Abe said he is "deeply concerned" about the current global trade situation, saying restrictive measures will not benefit any country, in an apparent reference to tit-for-tat tariff hikes by the United States and China.
At the summit that will also address environmental issues, the G-20 leaders are expected to agree to end the discharge of plastic waste in the world's oceans by 2050, sources familiar with the matter said Friday. The goal will likely be included in a post-meeting joint statement.
U.N. Secretary General Antonio Guterres, speaking at a press conference in the western Japan city, acknowledged that it will be "very difficult to have a breakthrough in relation to some of the most difficult challenges that the international community is facing."
Other heads of international organizations such as the International Monetary Fund and the World Trade Organization, as well as nearly 10 invited countries including Singapore and Thailand, are also participating at the G-20 summit.
Bilateral talks scheduled for Saturday between Trump and Chinese President Xi Jinping have already gripped the G-20, as the tariff battle between the world's two largest economies has threatened to darken the economic outlook given the integrated nature of global supply chains.
Rising tensions in the Middle East amid a U.S.-Iran standoff over a 2015 nuclear deal have also become a concern for the world economy and sent oil prices higher.
Major central banks, including the U.S. Federal Reserve and the Bank of Japan, have recently hinted at additional stimulus if needed, even as the G-20 finance chiefs, who met earlier in the month, said growth is expected to pick up moderately later this year.
As digital data can both be an economic growth driver and a security risk, Japan is making the case for better and proper use of it through what is called the Osaka track, a forum for rule making in ecommerce and other areas.
Joining Abe and Xi during a special session on the digital economy, Trump called it a "crucial driver of economic growth" and said America's success in the area is based on the free flow of data, strong privacy and intellectual protection.
"At the same time as we expand digital trade, we must ensure the resilience and security of 5G networks," Trump said, amid U.S. national security concerns about China's Huawei Technologies Co.
The G-20 leaders agreed on the "urgency and importance" of reforming the WTO, seen as a symbol of multilateral free trade, according to the Japanese official.
Under the WTO, launched in 1995, countries negotiate trade rules. It also provides a dispute settlement mechanism.
The United States has taken aim at the WTO's failure to enforce its rules on China, blocking appointments to its appellate body.
"We are working closely with the United States and Japan as well as China and others on reforming the World Trade Organization and creating a level playing field," European Commission President Jean-Claude Juncker said at a press conference on Friday.
"This can only be done with the G-20 as a core group," Juncker said, referring to the need to tackle issues such as unfair industrial subsidies.
The G-20 was originally formed as a forum for policy coordination in times of emergency such as the 2008 financial crisis.
More than a decade later, it also needs to discuss ways to foster economic growth by promoting digital trade and making better use of innovations such as artificial intelligence.
On the G-20 fringes, Abe agreed to step up bilateral trade talks with Trump, who seeks to reduce his country's trade deficit with major exporters.
Abe also met separately with other world leaders including British Prime Minister Theresa May and German Chancellor Angela Merkel.