Monday, 25 September, 2017

G20 ministers drop anti-protectionist, climate pledges

Edmund Wade | 19 March, 2017, 00:55

Merkel said globalization and free trade could be fairer but both had worked for Germany.

Finance ministers from the world's biggest economies on Saturday dropped an anti-protectionist pledge and a vow on action against climate change, after Washington refused to sign up to the commitment.

Host German Finance Minister Wolfgang Schaeuble however struck a conciliatory tone, noting that in the United States the matters of finance and trade were divided in two portfolios.

Europe, China and Brazil want the G-20 to preserve current language calling for a rejection of protectionism "in all its forms".

US President Donald Trump, who campaigned on an "America First" platform, has already pulled his country out of the proposed Trans-Pacific Partnership agreement with Japan and other countries.

The AP reports that Wolfgang Schaeuble, Germany's finance minister, suggested there had been tension during the two-day meeting.

Where the U.S. has threatened foreign manufacturers with steep import taxes, France "rejects all unilateral protectionist measures", Sapin added.

The separate issue of climate change has also become a sticking point, participants said, noting that the U.S. delegation is reticent to sign up to previous pledges to help fund mitigation programmes.

The G20 has in the past pledged support to the existing multilateral trade system, including the World Trade Organisation (WTO).

The ministers and central bank chiefs of the G20 countries ended talks in the German town of Baden Baden on Saturday, making only a token reference for the need to strengthen the contribution of trade to the economy.

Chinese President Xi Jinping and Merkel also took the unusual step of stressing their commitment to free trade ahead of the G20 meeting.

In two days of meetings in Baden-Baden, delegates split under the pressure of the new USA rhetoric on the balance of global trade, with most favoring a multilateral, rules-based system as now embodied in the World Trade Organization. Before the group meeting, the two talked for about 35 minutes in the first face-to-face between finance ministers of Japan and the USA since the inception of the new administration in Washington. Ahead of the summit, International Monetary Fund head Christine Lagarde said that it was clear that highly educated workers benefit more from globalization and called for the G-20 to focus on "greater efforts to equip lower-skilled workers with the tools they need to seek and find better-paying jobs".

The outcome of the first face-to-face talks between Aso and Mnuchin could be a relief to Japanese officials concerned about the US piling pressure on Japan over currency policy.

Trump has suggested global warming was a "hoax" concocted by China to hurt US industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions.

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