US and global partners wrestle over trade stance

Germany G20 Finance Ministers
German Finance Minister Wolfgang Schaeuble, right, and the President of Deutsche Bundesbank, Jens Weidmann, speak during a high-level symposium ahead of the G-20 Finance Ministers meeting in Baden-Baden, southern Germany, Friday, March 17, 2017. (Franziska Kraufmann/dpa via AP)

BADEN-BADEN, Germany/March 17, 2017 (AP)(STL.News) — Top finance officials including new U.S. Treasury Secretary Steven Mnuchin are debating how strong a statement to make in support of free trade at a meeting that will help set the tone for the global economy.

The gathering of finance ministers and central bank heads from the Group of 20 countries has focused on shifting attitudes toward trade, particularly after U.S. President Donald Trump vowed to impose border taxes and rewrite free trade deals.

Attention has centered on a joint statement that is being prepared for Saturday. Early drafts have dropped an earlier ban on protectionism but there was no agreement on what to replace it with, or exactly how to put their position into words, said officials who briefed reporters Friday only on condition of anonymity because the talks were ongoing.

Deputies assigned to work out the details ahead of time had to leave the matter for the ministers, who held the first of their sessions late Friday afternoon German time at the two-day meeting in the spa town of Baden-Baden in southern Germany.

The meeting’s host, German Finance Minister Wolfgang Schaeuble, told reporters that “no one has mentioned protectionism” and that the statement was rather about “the right formulation regarding the openness of the world economy.”

Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development, downplayed differences over the exact language.

He told The Associated Press it was “important to create a comfort zone” where leaders could have their first discussions with the new administration, “to make them feel that this is a place where we can talk, we can ventilate the areas where we have common ground and the areas where we may have differences.” The OECD is one of several international organizations invited to participate in the meeting.

The last such gathering, in July 2016 in Chengdu, China, issued a strong statement in favor of free trade, saying “we will resist all forms of protectionism.” That ringing statement was absent in early drafts put together in recent weeks ahead of this meeting; possible replacements include support for “fairness” and “inclusiveness.”

European countries and others that depend on exports, such as China, were said to be pushing for a stronger statement in favor of trade with fewer tariffs and other barriers in a rule-based system.

The gathering will help set the tone for international commerce and finance and will give Mnuchin a chance to clarify what the U.S. position is.

The G-20 is an informal forum on economic cooperation made up of 19 countries with more than 80 percent of the world economy, plus the European Union. The finance ministers’ meeting will pave the way for a summit of national leaders in Hamburg, Germany, on July 7-8.

Trump has repeatedly emphasized that the U.S. needs a tougher approach to trade that would put American workers and companies first. He has already pulled the U.S. out of the proposed Trans-Pacific Partnership agreement with Japan and other Pacific Rim countries and he has started the process to renegotiate the North American Free Trade Agreement with Mexico and Canada, both of whom are G-20 members.

In a visit to Berlin ahead of the G-20 meeting, Mnuchin said the U.S. is interested in trade that is not only free but fair.

“Our objective is getting more balanced trade agreements,” he said, confirming that having border taxes is an option. He said, without providing specifics, that some U.S. trade agreements need to be re-examined, while adding that, “It is not our desire to get into trade wars.”

Mnuchin is scheduled to meet one-to-one with China’s Finance Minister Xiao Jie and central bank governor Zhou Xiaochuan.

The G-20 meeting is taking place with the global economy in relatively good shape: the International Monetary Fund predicts growth of 3.4 percent this year and 3.6 percent next year, compared with 3.1 percent last year.

Yet the British vote last year to leave the European Union and its free trade zone and Trump’s victory on an “America First” platform have underlined discontent with trade and globalization and a sense among many that the benefits of a globalized economy — that is, with fewer barriers to trade and business — do not reach enough people.

Advocates for free trade such as the IMF say that trade restrictions will only hurt growth and won’t benefit ordinary people, while urging measures to spread the benefits of trade more widely. That could include job training and education, since the IMF says trade and globalization have benefited higher-skilled workers.

___

DAVID McHUGH, AP Business Writer

STL.News
About STL.News 6519 Articles

STL.News is owned and operated by St Louis Media, LLC. We publish International and national through a license agreement with Associated Press (AP). Our local news is provided by local professional writers with a journalism background. Our content is distributed to the major search engines and top-rated social sites. Additionally, we distribute press releases using AP, Google News, Google Newsstand, Bing News, Apple News, News360.com and our massive social media network expanding to more than 50 social sites.