ZCZC
BCN-07
G20-ECONOMY-TRADE-COMMUNIQUE
G20 warns ‘heightened trade and geopolitical tensions’ pose risks to
growth
BUENOS AIRES, July 23, 2018 (BSS/AFP) – Group of 20 finance ministers
warned on Sunday that “heightened trade and geopolitical tensions” posed
risks to global economic growth as two days of meetings came to a close.
The G20 emphasized “the need to step up dialogue and actions to mitigate
risks and enhance confidence,” in its final communique after a summit
dominated by fears over an escalating global trade conflict.
The statement did not mention the United States, which is at the center of
multiple trade disputes, but was still stronger than the statement in March
when the G20 avoided the issue altogether.
G20 ministers described current global economic growth as “robust” in the
communique but cautioned that “short and medium term” risks “have increased.”
As well as trade tensions, the communique identified “rising financial
vulnerabilities,” “global imbalances” and “inequality” amongst the risks.
The ministers and central bank chiefs met against a backdrop of the United
States trading punitive tariff sanctions with the European Union and China,
amongst others.
US President Donald Trump’s protectionist policies had come under fire as
EU finance chief Pierre Moscovici called on the US to act not as “foes but
allies.”
French finance minister Bruno Le Maire denounced trade actions that are
creating a “survival of the fittest” mentality and said the US must “de-
escalate” first.
In response to the communique, International Monetary Fund chief Christine
Lagarde spoke out against the tit-for-tat tariffs and urged that “trade
conflicts be resolved via international cooperation without resort to
exceptional measures.”
She added that to combat financial volatility, “exchange rate flexibility
should continue to play a role in buffering shocks in emerging economies, and
prudential policies should address financial vulnerabilities everywhere.”
The G20 statement reaffirmed commitments made in March on exchange rates,
when the ministers agreed to “refrain from competitive devaluations, and will
not target our exchange rates for competitive purposes.”
In his most recent attack on trading partners, Trump last week accused
China and the European Union of violating that commitment, by keeping their
currencies and interest rates low, while the US dollar is strengthening and
eroding the American competitive advantage.
BSS/AFP/HR/0930