G20 trade wording considered a setback for export champion Germany

Posted March 19, 2017

Their stance on issues such as free trade and climate change have major implications on the global economy.

Conspicuous by its absence was the phrase "we will resist all forms of protectionism" that was contained in the communique from the last meeting of the group in China in July 2016.

Wolfgang Schaeuble, the finance minister of host country Germany, suggested Saturday that the two days of talks at the G-20 had been somewhat rocky.

In demanding retention of wordings on currencies, Japan apparently sought to clarify the G-20's shared view that foreign exchange interventions are justifiable to stem excess volatility, while the U.S. is seen as trying to prevent such countries as China and Japan from manipulating currency moves, the source said.

Dropping the commitment to fight protectionism reflects serious disagreements over one of the key principles that has underpinned the global economy for years.

Seeking to put America first, Trump also has started the process to renegotiate the North American Free Trade Agreement with Mexico and Canada.

But the writing has been on the wall for a while.

Washington wants the G20 to accommodate President Donald Trump's "America First" plan and his demand for what he describes as a fairer trading system that better reflects USA interests.

Carried to power on the back of a political storm over deindustrialization in vast areas of the U.S., Trump vowed in his inauguration speech to "follow two simple rules: buy American and hire American".

"Trade contributes to our economies", Schauble said at a press conference.

Mr Trump has been insistent that the United States has previously been treated "unfairly" in its dealings around the world.

He stressed that what Washington seeks is "free and fair trade" that is good for both Americans and the world. "NAFTA has been a disaster for the United States, a disaster for our companies, but particularly for the workers". But he asserted that the USA has been treated "very, very unfairly by many countries over the years" and pointed to Germany as having done "very well in its trade deals with the US". He has already pulled the US out of the proposed Trans-Pacific Partnership agreement with Japan and other Pacific Rim countries and he has started the process to renegotiate the North American Free Trade Agreement with Mexico and Canada, both of whom are G-20 members.

Group of 20 finance chiefs will reiterate existing pledges on currencies, including commitments to avoid competitive devaluations, at the urging of Japan and the U.S., a G-20 source said Saturday, as they prepare to wrap up a two-day meeting and issue a communique.

- Alanna Petroff contributed to this article.