Top economies yield to US, drop no-protectionism pledge
- Author: Zachary Reyes Mar 31, 2017,
Mar 31, 2017, 18:07
The rejection of language supporting free and open trade and condemning protectionism signals a growing fissure between the US and some of its key economic allies.
"What is relevant is what we agreed as a group: to strengthen the contributions of trade to our economies", he said.
Trump, who was elected to office in November a year ago, has called global warming a "hoax" concocted by China to hurt the United States industry and vowed to scrap the earlier Paris climate accord aimed at curbing greenhouse gas emissions.
Mnuchin said Trump's administration would keep a close eye on the levels of key global currencies, but pursue policies in the interest of "economic growth that is good for the USA and the rest of the world".
The threat of economic protectionism and border taxes from the White House have anxious countries that rely on the United States for trade.
That stance has grated Washington's partners, who are trying to persuade US Treasury Secretary Steven Mnuchin to renew a long-standing G20 anti-protectionism commitment and uphold an global deal on climate won only after years of painful negotiations.
Host German Finance Minister Wolfgang Schaeuble struck a conciliatory tone, suggesting that Mnuchin was not empowered to act on some issues.
Host German Finance Minister Wolfgang Schaeuble however struck a conciliatory tone, noting that in the U.S. the matters of finance and trade were divided in two portfolios. He said, without providing specifics, that some USA trade agreements need to be re-examined, while adding that, "It is not our desire to get into trade wars".
Finance ministers and central bankers aren't usually the key officials for trade talks, but their statements normally reflect a consensus. The finance ministers' meeting will pave the way for a summit of national leaders in Hamburg, Germany, on July 7-8. But as a presidential candidate, Trump campaigned against the country's free trade position, frequently calling for an "America first" trade policy.
Canada is preparing for potential new talks on renegotiating the North American Free Trade Agreement with the USA and Mexico, and has mounted a widespread lobbying campaign aimed at convincing Trump and his administration about the benefits of trade with their northern neighbor.
"The US has been pushing a more protectionist agenda - the high uncertainty at the moment is what that will exactly look like", said Torsten Slok, chief worldwide economist at Deutsche Bank in NY. "Free trade has led to a lot of bad things happening".
There had been much anticipation to see how Mnuchin and the US administration would handle a forum of talks that typically requires compromise when the USA administration had in recent weeks threatened to change some of its trade deals.
After the meeting, the U.S. said it still believed in free trade but wanted to correct some excesses. Without mentioning a country by name, he said, "Maybe one or the other important member state needs to get a sense of how global cooperation works".
He reiterated that call in a Saturday morning tweet, demanding that North Atlantic Treaty Organisation and the U.S.
Its decisions do not have the same force as an global treaty and depend on individual countries' promises to follow through on them.