Published: Tue, March 21, 2017
Markets | By Erika Turner

Little economic common ground found at G-20 meeting

Little economic common ground found at G-20 meeting

Clear support emerged last week from Group of 20 (G20) members' Finance Ministers and central bank governors for the broadening of worldwide economic and financial cooperation with African countries to "foster sustainable and inclusive growth" in line with the African Union's Agenda 2063.

US Treasury Secretary Steven Mnuchin, however, downplayed the content of the statement.

And the Trump administration has not yet decided on the specific policies it will use to make good on campaign pledges to shrink US trade deficits and grow American manufacturing jobs. In a press conference later, he said that "there wasn't a G-20 disagreement, there was disagreement within the G-20 between a country and all the others".

The deletion of a "ritualistic phrase" in the G20's core language could over time diminish USA influence, said Eswar Prasad, a former International Monetary Fund official and trade policy professor at Cornell University.

Canada took a middle approach in the talks, urging a statement supporting free trade but not taking a position on specific wording. Ironically, China and some European states tend to intervene more often in private-sector business than the USA government.

In a bid for American support, finance ministers of the G-20 have dropped anti-protectionist language from a communique released on Saturday, delivering a blow to free-trade booster Germany while handing the Trump administration a significant victory.

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Trump and other critics of free trade argue that it can cause jobs to move to lower-cost countries.

Asked about this, Mnuchin said he knows Trump's desires on trade and negotiated them from Baden Baden, adding: "the new language makes sense".

The most immediate problem for the rest of the G20 is that they head into the summit of leaders, in Hamburg in July, with tremendous uncertainty over whether they can bring the U.S. into the fold.

Germany, the European Union's largest economy, started a program called "Compact with Africa" as part of its presidency of the G-20 to build up the continent's economies and stem migration to the bloc, which has attracted more than 1 million refugees since 2015.

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"To a person, they have said they have been pleased with the way he is coming at issues", Morneau said.

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