G-20 Drops Anti-Protectionist Pledge as Trump Stance Goes Global


Mnuchin and Chinese Finance Minister Xiao Jie and central bank Gov. Zhou Xiaochuan are scheduled to hold a bilateral meeting in Baden-Baden, one of the G-20 officials said.

Speaking to Reuters ahead of the meeting, Schäuble said the protectionist stance of the new US administration could complicate the talks and force policymakers to leave out the disputed trade issue.

This year Washington wants the G20 to accommodate Trump's "America First" plan and his demand for what he describes as a fairer trading system that better reflects USA interests.

Both China and Germany have found themselves in the crosshairs of United States criticism over their massive trade surpluses.

The G20 financial leaders on Saturday reaffirmed their commitment to refrain from competitive currency devaluation, a key agreement as the U.S. has repeatedly complained that some of its trade partners are using artificially devalued currencies to gain a trade advantage.

He and Schaeuble, he said, agreed it was important to work together to produce "growth, stimulate job creation, and work cooperatively on balanced trade across the economies".

Treasury Secretary Steven Mnuchin represented the U.S.at the meeting and declined to include language in the group's joint statement that stressed the importance of free trade and that trade should be conducted in a "rules based" manner.

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Experts said before the meeting that a failure by the G20 to commit to free trade would signal that Trump is serious about following through with at least some of those threats.

Finance ministers from the world's biggest economies have ditched an anti-protectionist commitment following opposition from the US. "We are for free, regulated global trade, with rules respected by everyone".

Trump's anti-globalisation agenda wins against the bloc's decade-old tradition of rejecting protectionism. That could include job training and education, since the International Monetary Fund says trade and globalization have benefited higher-skilled workers. She highlighted a free trade agreement between the European Union and South Korea that had benefited both sides.

The statement issued by finance ministers at the G20 meeting was milder than 2016's. Other prominent participants will be European Central Bank President Mario Draghi, China's finance minister, Xiao Jie, and the host finance minister, Wolfgang Schaeuble of Germany.

In relation to Berlin, Mnuchin told reporters on Thursday he had listened to Schaeuble's argument that Germany's export surplus was as a effect of the European Central Bank setting the interest rates for all 19 euro area countries. "But it wasn't clear what one or another meant by that". Officials may continue to seek greater consensus on trade between now and the G-20 leaders summit in Hamburg in July.

So all eyes were on what Mnuchin might say as he attends his first global conference as US treasury secretary.