Daily Management Review

G20 Refrains From Criticizing Protectionism But Issues Warning Of Global Slowdown


06/29/2019




While issuing a warning about the increasing risks to the global economy, the leaders of the Group of 20 major economies did not officially blame protectionism for it. They instead issued a call for development and maintenance of a free and fair trade environment.
 
The growth of trade and geopolitical tensions caused a downward tilt for the risks to global trade and slowing down its growth, said the leaders in a communique at the end of a two-day meeting in Japan’s western city of Osaka.
 
“We strive to realize a free, fair, nondiscriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” they said in a second successive summit statement. The statement however stopped short of giving a call for stop protectionism.
 
While putting on a brave face, Japanese Prime Minister Shinzo Abe stressed that there was much in common between the leaders of the gG20 countries which includes agreement on issues such as  a shared recognition of the need for the group  and on the crucial drivers of global growth.
 
“The G20 agreed on fundamental principles backing a free trade system,” Abe said. “The group had also pledged stronger action to improve the dispute settlement system of the World Trade Organization (WTO),” he added.
 
Common ground with the United States and other countries was south by Japan while preparing the G20 statement because Japan is the chair of the meetings. The US has of late been opposed to language that sought to denounce protectionism. There were however many other countries that sought stronger warning against trade tension.
 
“There were no breakthrough decisions but … all participants have confirmed their aspiration to work further on improving the global trade system, including the aspiration to work on WTO reform,” Russian President Vladimir Putin told a news conference on Saturday. “The fact that all have confirmed the need of this process and their readiness to work toward this process is already positive.”
 
The markets have been jolted by the widening fallout from the U.S.-China trade war. It also put the resolve of the G20 members to test as they sought to present a unified face aimed at averting a global slowdown and recession.
 
The US and China agreed to resume trade negotiations which raised hopes in the markets about the end of a bitter trade dispute between the two largest economies of the world.
 
Another free trade agreement was struck between the European Union and South American bloc Mercosur and the two parties pledge to work towards a more open markets to combat the rising risks from protectionism. “This deal promotes our values and supports a multilateral, rules-based system,” European Commission President Jean-Claude Juncker told reporters on Saturday.
 
But the global economy had already hit a “rough patch” because of trade conflicts, warned, Christine Lagarde, managing director of the International Monetary Fund, and urged that reduction of tariffs and other trade hindrances should be ensured by the G20 policymakers.
 
“While the resumption of trade talks between the United States and China is welcome, tariffs already implemented are holding back the global economy, and unresolved issues carry a great deal of uncertainty about the future,” she said in a statement.
 
(Source:www.financialpost.com)
 






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