G-20 reconfirm fight against protectionism

March 21, 2018

Buenos Aires- Top finance and monetary officials from the Group of 20 advanced and emerging economies finished their two-day talks on Tuesday by reconfirming their determination to fight protectionism.

In a communique adopted at the meeting in the Argentine capital of Buenos Aires, finance ministers and central bank chiefs from the G-20 economies said, "We reaffirm the conclusions of our leaders on trade" at their summit in Hamburg, Germany, in July last year. They added a new clause that the G-20 economies "recognize the need for further dialogue and actions."

At the July 2017 meeting, the G-20 leaders said in their joint statement that they "will continue to fight protectionism including all unfair trade practices."

Trade was a major issue at the Buenos Aires meeting at a time when the administration of U.S. President Donald Trump is increasing protectionist moves.

The latest communique said, "We are working to strengthen the contribution of trade to our economies," adding, "International trade and investment are important engines of growth, productivity, innovation, job creation and development."

The finance ministers and top central bankers thus showed their intention to continue efforts to resolve the feud over the Trump administration's controversial steel and aluminum tariffs, set to be introduced on Friday, in order to help the world economy attain sustainable growth. China and the European Union in particular have expressed their strong opposition to the U.S. tariffs.

From Japan, State Minister of Finance Minoru Kihara and Bank of Japan Governor Haruhiko Kuroda attended the G-20 meeting. Kihara stood in for Minister of Finance Taro Aso, who stayed in Japan to focus on a response to a scandal over his ministry's alterations of documents related to the controversial sale of a state land plot to school operator Moritomo Gakuen at a deep discount.

At a press conference after the gathering, Kihara said that participants shared the importance of free trade, adding that Tokyo can give certain marks to the G-20 communique.

US Treasury Secretary Steven Mnuchin claimed that the planned steel and aluminum tariffs do not represent a protectionist move.

The United States is ready to act to protect its national interests, and such action always involves risks, he added, stressing the Trump administration's determination to go ahead with the import restriction although China and European countries may take retaliatory steps against the U.S. measure.

At the latest meeting, the G-20 officials discussed issues related to cryptocurrencies for the first time.

The officials used the term "crypto-assets" for cryptocurrencies because they "lack the key attributes of sovereign currencies."

While noting that technological innovation has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly, the communique said, "Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing."

The G-20 officials called on international standard-setting bodies to continue monitoring crypto-assets and their risks.

The officials sounded cautious against speculative moves on financial markets, following global stock sell-offs triggered by a tumble of US equities in February.

The global economic outlook "has continued to improve," but recent market volatility despite sound fundamentals of the global economy is "a reminder of risks and vulnerabilities," they said. "Downside risks persist and, over the medium term, challenges remain to raise growth and make it more inclusive."

They reconfirmed past international agreements on the currency market, saying: "We recognize that excessive volatility or disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will refrain from competitive devaluations, and will not target our exchange rates for competitive purposes."

The G-20 members are the Group of Seven major industrial nations--Britain, Canada, France, Germany, Italy, Japan and the United States--and Argentina, Australia, Brazil, China, India, Indonesia, South Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey, plus the EU. Jiji Press