Mnuchin at G-20: USA wants free but fair and balanced trade

Posted March 19, 2017

US Treasury Secretary Steven Mnuchin said on Thursday in Berlin that the Trump administration had no desire to get into trade wars but that certain trade relationships need to be re-examined to make them fairer for US workers.

The group's final statement Saturday said that countries "are working to strengthen the contribution of trade" to their economies. Early drafts have dropped an earlier ban on protectionism, but there was no agreement on what to replace it with or exactly how to put their position into words, said officials who briefed reporters Friday on condition of anonymity because the talks were ongoing.

The first meeting of G20 financial ministers after US presidential election takes place against the backdrop of possible protectionism measures repeatedly announced by US President Donald Trump.

Canada, like China a major trade partner of the U.S., took a nuanced approach.

By failing to explicitly reject protectionism, the G20 summit may have set the stage for growing divergence between the United States and other major economies on globalization. But in the end, the group failed to find a substitute phrase in support of free trade that all could agree on.

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

After the meeting, the U.S. said it still believed in free trade but wanted to correct some excesses.

"Our objective is getting more balanced trade agreements", he said, confirming that having border taxes is an option.

"This is why it's all the more important that we are well prepared", Schaeuble said, adding that strengthening the economic resilience against future shocks was one of the priorities of the German G20 presidency.

U.S. Treasury Secretary Steven Mnuchin, taking part in his first global meeting since being sworn in, sought to downplay the wording issue.

Mnuchin said the U.S. would work with global partners but review trade deals that disadvantage the U.S.: "It's free trade, balanced trade and fair trade".

The International Monetary Fund chief economist Maurice Obstfeld warned on Monday that US proposals to overhaul the USA tax code by favouring exports over imports could have spillover effects to other economies such as Saudi Arabia as the measure was likely to strengthen the dollar. But one of the European officials said this was not uncommon for a new administration, which was still formalizing its viewpoint on an array of complicated matters.

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

However, German Finance Minister Wolfgang Schauble struck a conciliatory tone, noting that in the U.S. the matters of finance and trade were divided in two portfolios.

You can read the full communiqué from the G20 here, at the German Federal Ministry of Finance.