Asian stocks lower after G20 drops anti-protectionism pledge

20 March, 2017, 17:53 | Author: Leticia Walters
  • German Finance Minister Wolfgang Schaeuble attends a press conference after the G20 Finance Ministers and Central Bank Governors Meeting in Baden-Baden southern Germany

The world's top economic powers dropped a pledge to oppose trade protectionism after push-back from President Donald Trump's administration, which wants trade to more clearly benefit American companies and workers.

The U.S., represented by Steven Mnuchin in his first appearance at an worldwide forum as Treasury Secretary, argued that trade arrangements need to be made fairer, in line with the administration's claims the U.S. has had a bad deal from the current setup.

The outcome marked a win for Trump, whose "America First" agenda and anti-globalisation rhetoric has spooked allies.

It is also a sad day for environmentalists, as the fight to control climate change can stifle without the support of G20 countries. China has started to talk the talk on free trade, even if it is a way off from walking the walk, while President Trump won the U.S. election in part because of a commitment to protectionist policies.

"It was totally undisputed that we are against protectionism".

"I can not overstate the importance of avoiding any rollback on this", he said, adding he hopes the G-20 leaders' summit in July produces a stronger commitment against protectionism."I hope, and I think we need it". "There wasn't a G-20 disagreement, there was disagreement within the G-20 between a country and all the others".

The U.S. delegation, led by Treasury Secretary Steven Mnuchin, wanted a reference on the need for trade to be "fair" while China, a previously unlikely champion in such matters, led a defense of the existing rules-based regime under the World Trade Organisation. While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute.

"You make people come to you by laying out a strident position", Schmitt said, summing up the approach Trump has used for years in real estate and business. "But it wasn't clear what one or another meant by that", he said.

Yet despite the isolationist and anti-globalisation rhetoric from the United States administration, the implementation of protectionist policies and reality of trade wars are not immediate concerns, analysts say.

Instead they chose to give some space to him and Trump's new administration to refine their trade views in the hopes for moderation by the time Germany hosts a G20 leader's summit in July.

The new U.S. Treasury secretary quickly became the "center of attention" at the gathering, Canada's Morneau said in an interview.

"Right now I would say the negotiators for Germany have done a far better job than the negotiators for the US", Mr Trump said. He however preferred a more selective "free" trade policy and considered a review of some prevailing trade agreements.

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