G20 forges a trade compromise
hamburg/ottawa — World leaders reached a compromise on trade at the Group of 20 summit as officials agreed to fight protectionism while tacitly recognising US President Donald Trump’s concerns about excess steel capacity and what he says are unfair trade practices.
The agreement was struck in the early hours of Saturday, leaving one paragraph in the section on climate change as the sole outstanding issue to be resolved, according to officials from two G20 members. At the same time, the language in the final statement refers to the use of “trade defence instruments,” leaving the shadow of tariffs hanging over the world.
Talks ran into a major rift over global economic policy on Friday as Trump, who spent much of his election campaign complaining about “unfair” trade hurting the US, held firm to his “America First” doctrine. G20 officials are concerned about a trade war over steel as Trump gears up for a decision on whether to impose punitive tariffs amid ongoing complaints about dumping on global markets.
German Chancellor Angela Merkel, the summit’s host, said on Friday that leaders need to find a common solution to steel overproduction, otherwise the risk of “bilateral actions” increases. In its communique, the G20 pledged renewed efforts to combat excess capacity in the steel industry, one of the officials said.
“We will keep markets open, noting the importance of reciprocal and mutually advantageous trade and investment frameworks,” the final communique will say, according to the officials. The G20 will “continue to fight protectionism including all unfair trade practices and recognise the rule of legitimate trade defence instruments in this regard.”
Trump’s administration is weighing whether to impose tariffs, quotas or a combination of both on steel imports under national security grounds through Section 232 of the Trade Expansion Act, even though only a fraction of US steel is used for defence. Trump’s Commerce Department launched its review in April, missed a self-imposed
We all recognise the importance of trade to our economies, the importance of trade to growth, and the difficulties protectionism presents Bill Morneau, Canadian Finance Minister
deadline for a decision last month and is expected to announce a verdict soon.
“We stand united in opposition to protectionism, that I think will be a positive outcome from this meeting,” Canadian Finance Minister Bill Morneau told reporters in Hamburg.
“What I believe to be the case is we all recognise the importance of trade to our economies, the importance of trade to growth, and the difficulties protectionism presents. That’s a subject that has reached consensus,” he added.
As of Saturday midday, sherpas were still working to overcome differences on climate change, according to several G20 officials. The sticking point was a reference to the US helping other countries “access and use fossil fuels more cleanly.” — Bloomberg