WASHINGTON – Finance leaders from the Group of 20 major economies agreed that trade disputes pose a threat to global growth but did not produce concrete steps to tackle the issue at a two-day meeting that concluded on Friday.
The gathering in Washington was held amid mounting fears that recent friction between the United States and China could escalate into a full-blown trade war. Japan, which risks being caught between its two biggest trading partners, stressed that such a scenario would produce “no winners,” a government official said.
The global economy has improved on the back of robust trade, with the International Monetary Fund forecasting year-on-year growth of 3.9 percent in 2018 and 2019, picking up from 3.8 percent last year.
But the IMF has also warned that inward-looking policies which undermine trade are one of the major downside risks to the forecasts.
The G-20 did not issue a joint statement, having done so just last month. At that gathering, they recognized “the need for further dialogue and actions” on trade. It remains to be seen if they will move further when they next gather in Buenos Aires in July.
The finance minister of Argentina, which holds the G-20 presidency this year, admitted that the forum was not equipped to take specific measures on trade. “We have to recognize the limitations that we as a group have,” Nicolas Dujovne told a news conference.
Dujovne added that while the finance ministers and central bank governors at the meeting were in agreement on the benefits of trade, opinions differed on the role that multilateralism had to play.
U.S. President Donald Trump has criticized multilateral trade frameworks, such as the North American Free Trade Agreement and the Trans-Pacific Partnership, as disadvantaging his country, pushing for bilateral deals instead.
The just-concluded meeting marked the return to the forum of Finance Minister Taro Aso, who sat out the March conference to deal with a cronyism scandal involving a state land sale by his ministry.
“No country will benefit from adopting inward-looking policies. If protectionism spreads, there will be less wealth to go around for everyone,” he said on Thursday.
Other issues that were raised include the risk that faster-than-expected tightening of monetary policy in the United States and Europe could roil financial markets.
Geopolitical risks were also discussed, including the civil war in Syria, where the United States and its allies launched airstrikes in response to alleged chemical weapon attacks by the Russia-backed government.
Aso also held bilateral talks with U.S. Treasury Secretary Steven Mnuchin, where he voiced concern over Washington’s shift toward protectionist policies under Trump.
A Japanese government official said Aso also called for the country to be exempted from the stiff tariffs on steel and aluminum imports that Washington rolled out last month, primarily targeting China.
The G-20 brings together Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.