Published: Fri, May 19, 2017
Economy | By Annette Adams

G7 financial summit focuses on Trump

G7 financial summit focuses on Trump

International Monetary Fund managing director Christine Lagarde arrives for the opening session of the G7 of Finance ministers in Bari, southern Italy, Friday, May 12, 2017.

European G7 officials complain that no-one knows what the USA means by "fair trade" and that the only way to establish fairness was by sticking to the rules of the World Trade Organisation - a multilateral framework.

G7 economic leaders will use the same language on trade, currencies and monetary policy at the end of their meeting in Italy on Saturday as the larger Group of 20 did in March at a meeting in Germany, an Italian G7 official said.

Subsequently, many global trade issues were put off the table during the Bari meeting, and the G7 discussed economic growth, cyberattacks, fiscal policies, and financial regulation (or deregulation, the case with the US). "We don't want to be protectionist but we reserve our rights to be protectionist to the extent we believe trade is not free and fair", he said.

The topic was not included in the agenda for fear it might lead to a confrontation among ministers, considering the critical stand of U.S. President Donald Trump's administration towards worldwide free trade agreements.

European officials complained that the US meaning of "fair trade" remained unclear and that the only way to establish fairness was to abide by the multilateral framework developed by the World Trade Organization.

"We see value in combining pro-inclusive growth fiscal policy with structural policies to safeguard macroeconomic stability", they said.

He said the Trump administration's economic policies aren't directly aimed at pursuing policies that would restrict trade, but rather are meant to spur US growth and aid the global economy. "We are working to strengthen the contribution of trade to our economies", the G7 communique read. After Trump's criticisms of financial regulation and trade.

"We recognise that the global economy is facing a prolonged period of modest growth, and high and rising inequalities, notably within many countries and affecting in particular middle- and low-income earners", the communique said.

They also called for a renewed common effort against cybercrime.

Italian finance minister Pier Carlo Padoan, who hosts this year's G7 meeting, said the discussions, which had been scheduled previous to Friday's cyberattack, were "unfortunately very timely", Reuters reported.

Despite Mnuchin's remarks, Japanese Finance Minister Taro Aso expressed hope that the G-7 leaders, including Trump, will narrow the group's gap on trade when they gather in Taormina, Sicily, on May 26 to 27.

The G7 is made up of the United States and six other major economies - Canada, Germany, Japan, Britain, France and Italy.

The group's agreements aren't legally binding; instead, they represent the leaders' political commitment to follow through.

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