G20 finance chiefs decry protectionism

BUENOS AIRES — G20 finance ministers and central bank governors met earlier this week to discuss ways to boost economic growth, as impending US import tariffs on steel and aluminum cast a pall over the gathering.

Most ministers agreed that the tariffs, set to take effect on Friday, fly in the face of the central tenet of today’s developed and emerging economies that protectionist measures only inhibit trade and growth.

“I am deeply concerned that the foundation of our prosperity and free trade is under threat,” said German Finance Minister Olaf Scholz. “Protectionism is not the answer to the difficulties of our time. The situation is serious.”

Spanish Economy Minister Roman Escolano echoed that sentiment when speaking to reporters at the close of the two-day meeting on Tuesday.

“The vast majority of participants share our opinion that protectionism is a great historical error, and that the international community must maintain its confidence in the multilateral order, which it has taken us many years to establish,” Escolano said.

US President Donald Trump previously announced a steep 25-percent tariff on steel and a 10-percent one on aluminum to protect national industry.

Multilateral arena

Instead of opting for such a heavy-handed anti-trade move, the United States should have tried to air its concerns “in the multilateral arena of the World Trade Organization, not within the framework of unilateral measures”, said Escolano.

Spain is betting on “economic opening up” and boosting trade with Latin America to drive economic growth, he said.

Likewise, Zhou Xiaochuan, head of China’s delegation to the G20 meeting, said China will continue to support multilateralism and to strengthen cooperation with all parties in opening up.

He pointed out that at previous meetings, especially during the time of the financial crisis, the biggest threat to the world economy came from financial or fiscal risks, but this year trade protectionism emerged as the single biggest concern for G20 members and posed as a major risk to global economic growth.

Despite the obvious consensus on the dangers of applying drastic protectionist measures, the US appeared undeterred.

US Treasury Secretary Steven Mnuchin admitted: “There is always a risk, if we apply tariffs, that others will respond, and there is a risk of a trade war.”

However, the US is “not afraid” of sparking a trade war, though he added that was not the objective.

He denied the tariffs were a protectionist measure, but at the same time said they were justified to combat “unfair practices” by some countries.

WTO Director-General Roberto Azevedo earlier warned of the potential “domino effect” of US tariffs.

Azevedo said: “This escalation, which I say has a domino effect, is an escalation that is tough to reverse.

“Once you enter the path of reciprocal reprisals, you know when it begins, you know how it begins, but you don’t know how or when you will be able to stop the process,” said Azevedo.

This escalation, which I say has a domino effect, is an escalation that is tough to reverse.” Roberto Azevedo,