18 March 2017

Bloomberg: G-20 drops anti-protectionist pledge as price of US assent

Finance chiefs of the world’s largest economies set aside a pledge to avoid protectionism and signed up to a fudged statement on trade instead, in response to the Trump administration’s call to rethink the global order for commerce.

Group of 20 nations said in a communique on Saturday that they are “working to strengthen the contribution of trade to our economies.” While the U.S. didn’t get all it wanted -- such as a explicit pledge to ensure trade is fair -- that’s a much pared-down formulation compared with the group’s statement last year, and omits a promise to “avoid all forms of protectionism.”

In two days of meetings in the German town of Baden-Baden, the argument by U.S. Treasury Secretary Steven Mnuchin, in his first appearance at an international forum in the role, reflects claims by President Donald Trump that his nation has had a bad deal from the current global trade setup. That attitude pitched him against most other delegates, who favored a multilateral, rules-based system as embodied in the World Trade Organization. [...]

Officials may continue to seek greater consensus on trade between now and the G-20 leaders summit in Hamburg in July.

I “regret that our discussions today didn’t end in a satisfactory manner,” French Finance Minister Michel Sapin said in a statement. In a press conference later, he said that “there wasn’t a G-20 disagreement, there was disagreement within the G-20 between a country and all the others. This isn’t a caricature, this is the reality of things.”

The communique also committed to “further strengthening the global financial architecture” and said members support work to finalize the Basel III framework on bank regulation. It dropped a reference to climate change, in the face of resistance from countries including the U.S., China, India and Saudi Arabia.

Economic Cooperation

As the end of the day approached, G-20 host Germany found itself trying to broker fresh compromises or risk dropping trade from the statement altogether. The final result was a statement longer on generalities than hard promises. [...]

Full article on Bloomberg

G20 Communiqué

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