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 after a two-day meeting that concluded on Friday.
The gathering in Washington was held amid mounting fears that a tariff skirmish between the United States and China could escalate into a full-blown trade war, Kyodo reported.
Argentine Treasury Minister Nicolas Dujovne told a press conference that while there was a strong consensus on the benefits of trade, opinions differed on the role that multilateralism had to play. Argentina holds the G20 presidency this year.
US 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.
Dujovne stressed that the G20 sees trade as a factor in assessing economic conditions and was not equipped to take specific measures. "We have to recognize the limitations that we as a group have," he said.
While some differences over trade appeared in the last few months, Dujovne said G20 members "still have a very big consensus on the benefits of trade for growth."
"The idea that the gains from trade have to be evenly shared is a concern that was placed both by advanced economies and emerging economies," echoed Argentine central bank Governor Federico Sturzenegger, noting "there was general appeal for multilateralism."
The finance ministers and central bank governors did not issue a joint statement, having done so just last month. At that gathering in Buenos Aires, they agreed to "recognize the need for further dialogue and actions" on trade.
Other issues that were raised at the G20 meeting 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.
Protectionism
Japan warned its G20 counterparts that protectionism and exchange of retaliatory measures will disrupt financial markets and heighten volatility. “I told my G20 counterparts that no country would benefit from inward-looking policies based on protectionism,” Finance Minister Taro Aso told reporters after a dinner gathering of the G20 finance leaders on Thursday, Reuters said.
Aso stressed the need to solve global imbalances under a multilateral, not a bilateral, framework. He also said currency markets remained vulnerable to abrupt shocks that could disrupt emerging market capital flows, as central banks of advanced economies start to dial back their crisis-mode stimulus programs.
Downside Risks
Financial leaders have expressed concern that trade disputes among major economies could pose downside risks to the global economy, Xinhua reported.
Chinese Vice Finance Minister Zhu Guangyao said at the meeting that current global recovery is facing "substantial challenges from a strong wave of anti-globalization and unilateralism."
He urged G20 members to "firmly support the multilateral trading system" and strengthen macroeconomic policy coordination so as to lay a solid foundation for sustainable global growth, according to a statement posted on the website of China's Ministry of Finance.
The G20 meeting comes after the Trump administration recently announced additional tariffs on imported steel and aluminum and threatened to impose broad tariffs against Chinese imports.
These unilateral protectionist measures have sparked widespread criticism and provoked threats of retaliation from major trading partners, raising the prospect of escalating global trade conflicts that threaten global recovery.
Politics Replaced by Sanctions
Russia condemned the use of economic sanctions and equaled them to protectionism, Russian Finance Minister Anton Siluanov said at the meeting on Friday, Tass reported.
"We spoke in condemnation of the restrictive measures which are being introduced against Russia and a number of other states. Politics is being replaced by sanctions, which, in our opinion, contradicts the principles of G20," the minister told reporters on the sidelines of this year’s Spring Meetings of the International Monetary Fund and World Bank Group in Washington.
He said that his speech also mentioned tariff restrictions, protectionism and the need to respect principle of extraterritoriality. "We need to consider those issues and make decisions as professionals, from the economic point of view. I think that such decisions should also be condemned because they contradict the spirit of G20 decisions," Siluanov said.
He added that economic sanctions were an element of protectionism. "Sanctions against Russia have primarily dealt a blow to Europe, they positively influenced the stocks of US aluminum producers, and had a negative impact on Russia. This measure is purely protectionist," he said.
The group involves 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.
