G20 urges dialogue to resolve trade tensions that threaten growth

Lloyd Doyle
July 23, 2018

Argentina's Economy Minister Nicolas Dujovne hinted that the G20 could not afford a rupture over trade disputes which he said should be resolved directly between governments or through the World Trade Organization.

In the briefing note prepared for G20 ministers, the International Monetary Fund said global growth may peak at 3.9 per cent in 2018 and 2019, while downside risks have increased due to the growing trade conflict.

The statement demanded G20 members "step up dialogue and actions to mitigate risks and enhance confidence".

"The language previously had been a bit ambiguous about that, a bit sheepish", Morrison added.

The weekend talks in Buenos Aires came at a time of escalating rhetoric in the trade conflict between the United States and China, the world's largest economies, which have so far slapped tariffs on $34 billion worth of each other's goods.

Long-simmering trade tensions have burst into the open in recent months, with the United States and China - the world's No. 2 economy - slapping tariffs on $34 billion U.S. worth of each other's goods so far.

Her warning came shortly after the top US economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no "macroeconomic" effect yet on the USA, the world's largest economy.

However he added: "Any time they want to sit down and negotiate meaningful changes, I and our team are available".

"While all countries will ultimately be worse off in a trade conflict, the USA economy is especially vulnerable", IMF Managing Director Christine Lagarde wrote in a blog post."Policymakers can use this G20 meeting to move past self-defeating tit-for-tat tariffs". Picture taken July 21, 2018.

He said the United States trade policy of unilateral tariffs was based on the "law of the jungle" as he pushed back against the demands of Donald Trump's administration.

Canadian Finance Minister Bill Morneau called the dropping of barriers a "great idea" and an "aspirational target", but said it would be challenging to execute because of historical economic differences.

As the relationship between Washington and Beijing sours, US Treasury Secretary Steven Mnuchin told a G20 summit press conference he had not held significant trade discussions with the Chinese finance minister.

European Union finance chief Pierre Moscovici hit out at Trump's protectionist policies, but said cool heads are needed to resolve the dispute. "But still the positions are not similar".

"If Europe believes in free trade, we are ready to sign a trade agreement with no tariffs, no tariff barriers and no subsidies".

The US and EU have been at loggerheads since Trump angered European allies by imposing tariffs on steel and aluminum.

Trump, who frequently criticizes Europe's 10 percent vehicle tariffs, is also studying adding a 25 percent levy on auto imports, which would hit both Europe and Japan hard.

Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G-20 gathering would lead to an easing of retaliatory trade measures. Washington has a "desire for a more balanced relationship and for that it is necessary that more USA products be imported", he said.

Mnuchin also reiterated the call for what he called "fairer opportunities" for his country in trade with China.

Other reports by Iphone Fresh

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