Published: Mon, March 20, 2017
Economy | By Annette Adams

G-20 Finance Ministers Abandon Free Trade Sentiment

G-20 Finance Ministers Abandon Free Trade Sentiment

The formal statement issued after the meeting on Saturday contained only a bland reference to "working to strengthen the contribution of trade to our economies", CNN reported. Protectionist policy attempts to shelter local businesses and workers from global competition through tariffs, import quotas and subsidies.

At the US's urging, the ministers also dropped support for previous climate funding pledges as set out in the 2015 Paris agreement.

But trade deals that now exist are not always balanced, he said, warning that Washington will not hesitate to renegotiate them. "The historical language was not really relevant", he said.

"We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people", Mnuchin said. "Having said that, we want to re-examine certain agreements".

"The G-20 communique danced around the key topic of protectionism and currency manipulation but bears the imprint of the White House trade concerns", said Neil Mackinnon, an economist at VTB Capital in London and a former U.K. Treasury official.

China and European countries pushed for a stronger affirmation of cross-border trade without tariffs or barriers.

The decision to drop the condemnation of trade protectionism came at the behest of U.S. Treasury Secretary Steven Mnuchin, according to reports from media outlets on hand at the G-20 summit in Baden-Baden, Germany. But attempts to include such language did not find agreement. "The alternative for them would be to negotiate directly with Trump and that would be worse". "The going to learn it's not as in-the-driver-seat as they think".

The G20 is a informal forum on economic cooperation between 19 countries plus the European Union.

Worldwide trade makes up nearly half of global economic output and officials said the issue could be revisited at a meeting of G20 leaders in July. Its decisions don't have the same force as an worldwide treaty but depend on individual countries' promises to follow through. Many sought one-on-one meetings with Mnuchin to explain their positions and hear his views.

Stocks were also lower as the US dollar continued its slide that began after the US Federal Reserve last week defied expectations and kept its interest rate outlook for the rest of the year unchanged after an increase in its benchmark.

Despite the pressure Mnuchin faced, Washington showed it still holds significant sway as the world's consumer of last resort: The G-20 adopted a pledge to promote fairness as it pursued economic growth.

One beneficiary of GOP's tax bill: President Trump.

"To a person, they have said they have been pleased with the way he is coming at issues", Morneau said.

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