Germany to press G20 on free trade as finance chiefs meet

Germany will press G20 members to sign off on a set of principles including free trade at this week’s meeting of the group’s financial leaders, in what the Trump administration may perceive as a challenge to its more protectionist stance.

In an unusual move, Germany, the host of the meeting, will stress the importance of global free trade in a document separate from the group’s main communiqué, G20 sources said.

The move underscores Germany’s desire to rebuff any explicit US demands to water down the group’s commitment to free trade, as German Chancellor Angela Merkel prepares for her first meeting with new President Donald Trump on Friday.

Attaching a separate document also would allow Germany to clarify its priorities and avoid them being overshadowed by what could be a more heated debate on protectionism and currency policy.

It is rare for a G20 chair country to issue a document separate from the main communiqué, especially one that differs on the tone and priorities.

Bundesbank President Jens Weidmann outlined Germany’s priorities on Wednesday, challenging the new US administration’s more protectionist stance on the eve of the meeting in Baden- Baden on Friday and Saturday.

It will be the first G20 finance chiefs’ meeting attended by representatives of Trump’s administration.

Calling a rejection of protectionism one of the greatest achievements of the G20, Weidmann asked finance chiefs to reaffirm this commitment, protecting what he argued was a key pillar of economic prosperity.

But a draft of the main G20 communiqué seen by Reuters appeared to accommodate Trump’s views on trade by dropping a phrase resisting “all forms of protectionism.”

Any attempts to dilute the commitment to free trade will likely face resistance from emerging economies reliant on global exports, including China, putting the onus on Germany to seek a compromise.