G20 to discuss US plans to overhaul tax code: official
Europe will resist protectionism: document
BERLIN, March 13, (RTRS): Plans to overhaul the US tax code will be debate by G20 finance ministers and central bankers at their meeting in Germany this week, a senior German official said on Monday.
“There is no reason to be pessimistic about relations with the United States ... but there will be the need to discuss issues like tax policy,” the official said on the condition of anonymity.
The German G20 presidency expects constructive discussions and a “good agreement” at the meeting.
Germany wants the meeting March 17-18 in Baden-Baden to focus on strengthening economic resilience, mastering challenges of digitisation and helping African countries, the official added.
The comments came after International Monetary Fund chief economist Maurice Obstfeld said a US proposal to overhaul its tax code that favours exports over imports could have spillover effects to other economies as it would strengthen the dollar.
European Union finance ministers will tell a G20 meeting this week that they will resist protectionism and that financial rules introduced after the 2008 crisis must be kept in place.
A document prepared by the EU ministers, which appears aimed at the United States, sets out the position of all European delegations for the G20 gathering of ministers and central bankers in Baden Baden in Germany on March 17-18.
“We reaffirm our commitment to keep the global economy open, resist protectionism and keep global economic cooperation on track,” says the paper, seen by Reuters.
An early draft communique for the G20 meeting suggested on March 7 that the world’s financial leaders might no longer explicitly reject protectionism, breaking with a decade-old tradition.
Instead, following the change of administration in Washington, they might promise only to keep an “open and fair international trading system”, wording which some officials see as a way to accommodate the protectionist views of President Donald Trump.
The draft communique, however, could change substantially, following discussions on March 17-18, G20 officials said.
The European Union ministers’ document also appears to argue against Trump’s plans to roll back US legislation, called the Dodd-Frank Act, introduced to prevent another financial sector crisis like that one in 2008.
“Avoiding a rollback in the financial regulation agenda is necessary,” the document says.
The document also appears to address remarks by Patrick McHenry, the Vice-Chair of the House of Representatives’ Financial Services Committee, in letter to Fed Chairman Janet Yellen about the international role of the Fed.
McHenry wrote that the US central bank should stop “negotiating international regulatory standards among global bureaucrats in foreign lands without transparency, accountability, or the authority to do so”.