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G20 calls for a strengthened trade dialogue; no agreement on the way forward



BUENOS AIRES (Reuters) – Global finance leaders demanded on Sunday strengthened dialogue to prevent growth and geopolitical tensions, but ended a two-day G20 meeting with little agreement on how to resolve multiple disputes over US Customs actions.

European Commissioner for Economic and Financial Affairs, Pierre Moscovici, speaks during a press conference at the G20 Finance Ministers' Meeting on 22 July 201

8 in Buenos Aires. REUTERS / Marcos Brindicci

The finance ministers and central bank governors of the world's 20 largest economies warned that although growth was still strong, growth was becoming less synchronized and downside risks were rising in the short and medium term.

"These include rising financial vulnerabilities, increased trade and geopolitical tensions, global imbalances, inequality and slow growth, especially in some advanced economies," G20 Finance officials said in a communiqué.

"We … recognize the need to strengthen dialogue and action to reduce risks and boost confidence," the communiqué states.

This marked a strengthening of the language compared to its earlier declaration in March, in which they simply recognize "the need for further dialogue".

"The latest language places great emphasis on solving these problems". Australian Treasurer Scott Morrison told Reuters in an interview, adding that the ministers had made it clear in the discussion that they were worried about "tit-for-tat" measures and that open trade was the goal.

"The language was a bit ambiguous before, a bit shy," added Morrison.

The weekend talks in Buenos Aires came at a time of escalating rhetoric in the trade dispute between the US and China, the largest economies in the world, which have so far cut tariffs on $ 34 billion worth of goods.

U.S. President Donald Trump overturned threats on Friday threatening to declare all $ 500 billion of Chinese exports to the United States, unless Beijing agreed to major structural changes in its technology transfer, industrial subsidies and joint venture policy.

U.S. Finance Minister Steven Mnuchin said at a press conference on Sunday that he did not hold substantive discussions at the G20 meeting on trade with China's Minister of Finance Liu Kun, which is mainly about "chitchat".

"Anytime you sit down and negotiate meaningful changes, I and our team are available," Mnuchin added.

European Central Bank President Mario Draghi shakes hands with Governor of the Bank of Korea, Lee Ju-yeol, alongside Turkish Treasury Secretary Berat Albayrak, before giving his official photo at the G20 Finance Ministers meeting in Buenos Aires in July posing 21, 2018. Photo taken on 21 July 2018. REUTERS / Marcos Brindicci

The Chinese delegation did not speak to the media at the G20 meeting.

G7 TRADE ACTION

Mnuchin instead focused on other trade relations in the talks, including those with the European Union, Canada, Mexico and Japan.

He said the G7 allies would take his demands for tariff elimination, non-tariff barriers and subsidies seriously, and the Trump administration will be introducing these ideas next week in trade talks with European Commission President Jean-Claude Juncker Track Washington.

Canadian Finance Minister Bill Morneau called the barrier drop a "great idea" and "target", but said it was difficult to implement because of historical economic differences.

Before any trade talks with the EU could begin, French Finance Minister Bruno Le Maire insisted that Washington cut its tariffs on steel and aluminum and oppose the introduction of car tariffs.

Slideshow (6 images)

European Commissioner for Economic and Financial Affairs Pierre Moscovici told reporters that the meeting was not tense, but it caused little movement from deadlocked trading positions.

"We listened to each other and I hope this is the beginning of something," said Moscovici. "Nevertheless, the positions are not similar."

Finance ministers in both Mexico and Canada said Washington was optimistic that an agreement could be reached over the coming months to modernize the North American Free Trade Agreement (NAFTA).

CONFUSED DEFENSE

Trump angered allies by imposing import duties of 25 percent on steel and 10 percent on aluminum, triggering EU and Canadian retaliatory tariffs on a range of US products.

Trump, who frequently criticizes 10% car fares in Europe, is also considering a 25% tax on auto imports that would hit both Europe and Japan hard.

Mnuchin said he does not feel isolated at the G20, held numerous bilateral meetings with officials, arguing that Trump's trade policy was not based on protectionism but on trying to make trade fairer.

"We strongly support the idea that trade is important to the global economy, but it must be fair and reciprocal," he said.

Hubert Fuchs, representative of the European Council at the G20, said he welcomed Mnuchin's open attitude, but said the United States "understands something else under fair and free trade".

coverage by Daniel Flynn, Luc Cohen, David Lawder, Eliana Raszewski and Scott Squires; Editing by Lisa Shumaker and Rosalba O'Brien

Our Standards: The Thomson Reuters Trust Principles.

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