‘G20 fails to mend trade rift’

Trade tensions within the Group of 20 leading industrialised and emerging economies could only be solved by the countries directly involved, the chairman of a meeting of finance leaders from the G20 said after a gathering in Bali yesterday.

Taking place on the sidelines of the International Monetary Fund and World Bank meetings on the Indonesian island, the G20 meeting provided little more than a forum for member countries to put their viewpoint on an escalating tariff war between the United States and China, the world’s two biggest economies.

“We recognise we are now facing trade tensions among members of the G20,” Argentine Treasury Minister Nicolas Dujovne, chairman of this year’s G20 finance leaders’ meeting, told a news briefing, without directly mentioning either the United States or China.

“The G20 can play a role in providing the platform for discussions. But the differences that still persist should be resolved by the members that are directly involved in the tensions.”

The United States and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months, jolting financial markets and stoking fears the rising tide of protectionism could dent global growth.

Dujovne said that while global growth projections remain steady, the expansion has become less even across economies as downside risks materialised.

“On trade tensions, we agree that international trade is an important engine of growth, and that we need to resolve tensions which can negatively affect market sentiment and increase financial volatility,” he said.

Dujovne sidestepped a question on how Japan ought to deal with trade frictions when it chairs the G20 meetings next year, saying only that “Japan will be the one deciding on the priorities.”

Japanese Finance Minister Taro Aso told reporters on Thursday that Tokyo hopes to discuss ways to fix global imbalances at next year’s G20 gatherings.