Ja­pan wants to put global im­bal­ances on the map

Gulf Times Business - - BUSINESS -

Ja­pan wants to high­light global im­bal­ances as key top­ics of de­bate, and take steps to fix them, when it chairs next year’s gather­ings of the Group of 20 ma­jor economies, govern­ment of­fi­cials said this week.

Tokyo hopes other coun­tries would join Ja­pan to counter US Pres­i­dent Don­ald Trump’s fo­cus on nar­row­ing US trade deficits through purely bi­lat­eral trade deals, the of­fi­cials say, rather than the big in­ter­na­tional agree­ments now in place.

The an­nual In­ter­na­tional Mone­tary Fund and World Bank meet­ings have been held on the In­done­sian re­sort is­land of Bali this week.

Ja­pan’s agenda-set­ting plan also un­der­scores Tokyo’s view that in­stead of fo­cus­ing too much on bi­lat­eral trade im­bal­ances, there should be more em­pha­sis on over­all cap­i­tal flows and struc­tural fac­tors be­hind the US cur­rent ac­count deficit – such as a lack of do­mes­tic sav­ings.

Ja­panese Fi­nance Min­is­ter Taro Aso said he made the case to his G20 col­leagues at a din­ner meet­ing on Thurs­day.

“I’ve told my coun­ter­parts that ex­ces­sive global im­bal­ances are risks to the global econ­omy... and that it’s im­por­tant to dis­cuss this at next year’s G20 meet­ings,” Aso told re­porters.

Trump’s “Amer­ica First” poli­cies and es­ca­lat­ing Sino-Chi­nese trade fric­tions have over­shad­owed the week­end gath­er­ing of G20 fi­nance lead­ers, many of whom ex­pressed con­cerns over the harm to global growth from trade con­flicts.

The G20 fi­nance lead­ers failed to bridge dif­fer­ences on trade with this year’s chair, Ar­gen­tine Trea­sury Min­is­ter Ni­co­las Du­jovne, con­ced­ing that the G20 can only pro­vide a plat­form for coun­tries to solve dis­putes among them­selves.

Ja­pan, which takes over from Ar­gentina as G20 chair next year, sees brighter prospects for the fo­rum.

“The G20 isn’t a fo­rum to solve bi­lat­eral trade dis­putes...but it’s the best fo­rum for de­bate if you see trade fric­tions as part of a big­ger prob­lem of glo- bal im­bal­ances,” said a se­nior Ja­panese govern­ment of­fi­cial di­rectly in­volved in G20 ne­go­ti­a­tions.

Global im­bal­ances had once been a key topic of de­bate at G20 gather­ings with a fo­cus on each coun­try’s cur­rent ac­count bal­ance, or the over­all flow of money that in­cluded, but was not con­fined, to trade.

This ap­proach runs counter to Trump’s fo­cus on nar­row­ing the US trade deficit via im­port tar­iffs and bi­lat­eral deals.

Ja­pan has long favoured a mul­ti­lat­eral ap­proach on trade over bi­lat­eral deals, which would put it un­der di­rect US pres­sure to open up sen­si­tive mar­kets like agri­cul­ture.

Tokyo is also wary of hav­ing its hands tied on keep­ing sharp yen rises in check.

A strong yen is seen as hurt­ing Ja­pan’s econ­omy by mak­ing its ex­ports less com­pet­i­tive over­seas.

US Trea­sury Sec­re­tary Steven Mnuchin said yes­ter­day Wash­ing­ton would like to in­clude a pro­vi­sion to de­ter cur­rency ma­nip­u­la­tion in fu- ture trade deals, in­clud­ing with Ja­pan.

Ja­panese pol­i­cy­mak­ers con­cede that con­vinc­ing the Trump ad­min­is­tra­tion to shift its em­pha­sis away from bi­lat­eral US trade deficits and to fo­cus on struc­tural poli­cies could be dif­fi­cult.

“It may be a hard sell,” the of­fi­cial said. “But we can’t give up.”

Ar­gentina’s Fi­nance Min­is­ter Ni­co­las Du­jovne (left), Ja­pan’s Fi­nance Min­is­ter Taro Aso (cen­tre) and US Sec­re­tary of Trea­sury Steven Mnuchin ap­plaud dur­ing a group photo ses­sion with cen­tral bank gov­er­nors and fi­nance min­is­ters at the In­ter­na­tional Mone­tary Fund-World Bank Group An­nual Meet­ing 2018 in Nusa Dua, In­done­sia. Ja­pan hopes other coun­tries would join it to counter US Pres­i­dent Don­ald Trump’s fo­cus on nar­row­ing US trade deficits through purely bi­lat­eral trade deals, of­fi­cials said.

Newspapers in English

Newspapers from Qatar

© PressReader. All rights reserved.