G20 Financial leaders leave out strong references to protectionism and climate change

Andrew Cummings
March 20, 2017

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".

Yet for all this, the usual language of the G20 to shun protectionism was replaced by much weaker wording that members were "working to strengthen the contribution of trade to our economies".

"I was pleased to see the support for trade in the G20 communique", Mr Morrison said in a statement on Sunday.

"We believe in free trade; we are one of the largest markets in the world, we are one of the largest trading partners in the world", he said.

"It's completely clear we are not for protectionism". "We have reached an impasse", Mr Schäuble said, later adding: "We did go to great lengths, we tried everything, we went down many avenues together and unilaterally".

This points to a fundamental disagreement between the United States administration and the other 19 participants, particularly the Europeans, who flatly rejected any form of protectionism. "Germany is one and in his meeting with German Chancellor Merkel, President Trump complained that the USA had been treated "very, very unfairly" by its trading partners".

U.S. Treasury Secretary Steven Mnuchin, taking part in his first worldwide meeting since being sworn in, sought to downplay the wording issue. While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute. Negotiations had left the USA with a raw deal, he said on Friday in a press conference with visiting German chancellor Angela Merkel, and he would fight for "fairer" trade deals to "even out" the relationship. "But it is not very clear what (protectionism) means to each (minister)". "And to the extent that agreements are old agreements and need to be renegotiated, we'll consider that as well".

Gary Schmitt, co-director of the Center for Security Studies at the American Enterprise Institute, said Trump could be sending a signal to other leaders that this is a negotiation, and the actions by Mnuchin at the meeting are an opening bid.

US Treasury Secretary Steven Mnuchin, however, downplayed the content of the statement. Before he and the rest of the group's leaders meet again in Hamburg in July, his counterparts have little more than 100 days to gauge if the removal of those words represents the beginning or the end of his administration's attempt to reset global terms of trade that it abhors as economically unfair.

"We will consult closely on exchange markets", they said.

Other reports by iNewsToday