Baden-Baden, Germany: The Group of 20 finance ministers could leave a brewing conflict over trade for their leaders to resolve amid signs they were struggling at talks in Germany to bridge differences with the United States.
With the US holding out against pressure from other states to renew the forum’s stance against protectionism, officials said on Friday the ministers may exclude trade references from their final statement and refer the issue on to the July summit of G20 leaders.
If the stalemate persists, it underlines the risks of the global agenda being hijacked by President Donald Trump’s new economic nationalism as set out in his “America First” plan.
The leaders’ summit is to be hosted by Chancellor Angela Merkel in the northern German city of Hamburg. Germany currently holds the G20 presidency.
German Finance Minister Wolfgang Schaeuble acknowledged on Friday that the finance chiefs were battling to agree on a final statement reaffirming their commitment to free trade and rejection of protectionism in the face the US’s stance.
“There is some discussion on whether we take the wording from previous meetings or whether we change them,” Schaeuble told public broadcaster SWR amid reports Washington is objecting to references to support of free trade in the conference’s final communique.
He was speaking as G20 finance ministers and their central bankers began their two-day meeting in the German resort town of Baden-Baden.
The conflict between the US and key G20 members comes down to a battle over the formulation of words on trade, which are to be set out in the final communique, G20 officials said.
In particular, whether global trading relations are organised on the basis of rigid rules as defined by institutions such as the World Trade Organization or, as the US is demanding, “more balanced” bilateral agreements between nations.
But Schaeuble, who is hosting the meeting, expressed confidence that Germany and the US can forge a common ground.
“I believe we will come to an agreement,” Schaeuble told broadcaster SWR as the meeting got under way.
“They are of course for free trade, and I think we can find a joint position in Baden-Baden,” he said.
The White House’s commitment to a strong dollar is also one of the themes at the talks, with the US Treasury Secretary Steven Mnuchin likely to press G20 nations to allow their currencies to rise.
This comes after the White House lashed out at nations such as Japan, Germany and China for manipulating their currencies so as to guide them lower and to boost exports, consequently hitting US competitiveness.
Currency manipulation and protectionism form part a series of interrelated — and contentious —policy issues that have emerged as Trump attempts to reshape the global economic order so as to promote US economic issues.
The G20 ministers will also be keeping an eye on Washington, where Trump and Merkel were due to hold their first face-to-face talks later on Friday.
In a bid to increase manufacturing jobs, Trump has also threatened to slap an import tax or border tax on companies.
The administration has also gone after Germany’s large trade surplus with the US, accusing Berlin of undervaluing the euro in order to have an advantage over its trade partners.
“It is not our desire to get into trade wars,” said Mnuchin following a meeting in Berlin with Schaeuble on Thursday.
Mnuchin said Trump supported free trade but that “it had to be fair.”
— dpa
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