G20 finance ministers drop anti-protectionist pledge

Posted March 19, 2017

Following pushback from US officials, led by US Treasury Secretary Steve Mnuchin, the communique of G20 finance minister backtracked on past commitments such as open trade and outright rejection of protectionism.

The outcome marked a win for Trump, whose "America First" agenda and anti-globalization rhetoric has spooked allies.

"At some meetings you can not reach all that you want to achieve".

"It´s possible that the U.S. is unable to say what they plan to do beyond the simplistic declarations in a tweet", he added.

Indeed, the U.S. delegation led by Treasury Secretary Steven Mnuchin stood its ground against enormous pressure from other G20 states.

"We are working to strengthen the contribution of trade to our economies", said the statement concluding this year's meeting.

"What was in the past communique is not necessarily relevant from my standpoint", Mnuchin told a news conference in Baden Baden after his first meeting with the finance chiefs of the world's 20 biggest economies.

In a surprise to many, finance ministers also dropped any reference to climate change funding in their official statement, reflecting President Trump's commitment to deregulate the fossil fuels industry. Mnuchin said after more than a decade, it was time to look again at their effectiveness.

Trump once claimed on Twitter that climate change was a hoax created by the Chinese "in order to make USA manufacturing non-competitive". After all, Trump's "America First" protectionist policy was a significant keystone in his successful election campaign a year ago.

"At past meetings, joint affirmations of free trade have been virtually automatic".

But trade deals that now exist are not always balanced, he said, warning that Washington will not hesitate to renegotiate them.

President Donald Trump's administration has previously expressed its will to make worldwide trade rules fairer, raising concerns among exporting nations like Germany.

The Hamburg summit is to be chaired by German Chancellor Angela Merkel, whose nation now holds the G20 presidency. Germany now holds the G20 presidency.

"We reiterate that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability", the statement said.

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

Currency manipulation by nations such as Japan, China and Germany has also been a major issue for the White House.

Trump has already torn up a trans-Pacific free trade pact, threatened punitive tariffs against multinationals with factories outside the United States and attacked "currency manipulation" by export giant China.

Mnuchin held 18 individual meetings during what was his first foreign trip as treasury secretary to the G20. USA unilateralism threatens to clash with everyone else, including countries like China who feel, as massive beneficiaries, duty bound to defend the current trade setup.

While delegates greeted Mr Mnuchin and said that he had been engaged in the process, it was not possible to reconcile the U.S. stance and that of the other members in any substantive way.

The G20 financial leaders on Saturday reaffirmed their commitment to refrain from competitive currency devaluation, a key agreement as the U.S. has repeatedly complained that some of its trade partners are using artificially devalued currencies to gain a trade advantage.