G20 draft no longer rejects protectionism or competitive devaluations
BRUSSELS: The world’s financial leaders may no longer explicitly reject protectionism or competitive currency devaluations, a draft communiqué of their meeting next week showed, promising only to keep an “open and fair international trading system”.
Finance ministers and central bank heads from the Group of 20 major developed and developing economies will meet on March 17-18 in the German town of Baden Baden to discuss the world economy.
It will be the first meeting of G20 finance ministers attended by representatives of the administration of US President Donald Trump, who has more protectionist policy views on trade.
The draft communiqué seen by Reuters, which may change before March 18, appears to accommodate the new US position.
The draft, dated March 1, drops the phrase adopted by G20 finance ministers last year to “resist all forms of protectionism”.
A warning against protectionism has appeared in G20 communiqués for more than a decade.
“The lack of any reference to protectionism in the draft is strange,” said one official close to the preparations for the meeting. “Maybe it is a minimum that everybody could agree on.”
The draft also no longer contains the sentence, used in previous statements, that the G20 should “refrain from competitive devaluations” and should not “target our exchange rates for competitive purposes.”
Instead, it says: “We will maintain an open and fair international trading system” and “We reaffirm our previous exchange rate commitments.”
G20 communiqués last year began including a phrase that was part of Group of 7 language for years: “Excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will consult closely on exchange markets. — Reuters