G20 ministers struggle to find consensus on trade
- Author: Michelle Webb Mar 19, 2017,
Mar 19, 2017, 0:58
German Finance Minister Wolfgang Schaeuble told CNBC on Friday U.S. Treasury Secretary Steven Mnuchin is in favor of open trade policies, as he attempted to ease tensions after recent sparring between the two economic powerhouses.
"The historical language was not relevant", he told journalists after the gathering of finance ministers and central bankers in Baden Baden, western Germany.
Europe, China and Brazil want the G-20 to preserve current language calling for a rejection of protectionism "in all its forms".
In the new U.S. administration's biggest clash yet with the worldwide community, G20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after U.S. President Donald Trump called global warming a "hoax".
After a two-day meeting, ministers from G20 developed and emerging nations said they were "working to strengthen the contribution of trade to our economies" but failed to spell out a pledge to reject protectionism in a closing statement. It's completely clear we are not for protectionism. Ahead of the meeting, Germany, which holds the G20 presidency, and the International Monetary Fund (IMF) have warned that USA protectionist talk risks derailing the global economy.
The United States has already said it would keep a close eye on the levels of key global currencies, but pursue policies in the interest of "economic growth that is good for the U.S. and the rest of the world".
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A meeting of G-20 finance ministers and central bank governors kicked off in the German town of Baden-Baden on Friday (March 17).
Finance ministers from 20 world powers have struggled at talks in Germany to find a common position on trade in the face of resistance from the United States. Europe was keen on adding that trade should be "rules-based", meaning subject to rules of the World Trade Organisation (WTO).
Chinese President Xi Jinping and Merkel also took the unusual step of stressing their commitment to free trade ahead of the G20 meeting.
China and European countries had pushed for a stronger affirmation of cross-border trade without tariffs or barriers.
19 countries worth most of the global economy, plus the European Union - are also due to discuss their longstanding ban on manipulating currencies to gain economic advantage. Officials may continue to seek greater consensus on trade between now and the G-20 leaders summit in Hamburg in July.
Host Germany dropped the no-protectionism pledge in the early drafting process ahead of the meeting, in apparent hope of not antagonizing the US and then finding a substitute that would also uphold free trade. Without mentioning a country by name, he said, "Maybe one or the other important member state needs to get a sense of how worldwide cooperation works".