Daily Management Review

U.S. Warned Not To Upset Global Growth By G7 Finance Chiefs


05/13/2017




U.S. Warned Not To Upset Global Growth By G7 Finance Chiefs
A decades-long global consensus in areas such as trade and financial regulation criticized by U.S. President Donald Trump, was pressed not to be broken up by the United States, finance chiefs from many of the world's leading rich nations called on Friday.
 
Kicking off a two-day meeting in the southern Italian port city of Bari, the official agenda for Group of Seven finance ministers and central bankers would include inequality, international tax rules and cyber security.
 
But discussions inside the walls of a 12th century Norman castle was dominated by Trump's threats to end a multilateral approach to policies from trade to climate change.
 
"We need a strong United States to lead the global economy and global politics in a sustainable way," said German Finance Minister Wolfgang Schaeuble when asked his message for U.S. Treasury Secretary Steven Mnuchin.
 
Global policies that had helped the world economy recover from the financial crisis that broke nearly a decade ago and had been put together painstakingly over years would not be allowed to be weakened by him and other ministers, French Finance Minister Michel Sapin said.
 
"It is unthinkable, and it will not happen, that one can destroy these collective achievements that give more stability .. and at the end of the day are truly in everyone's interests," said Sapin, who is likely to lose his job soon following Emmanuel Macron's election as president this month.
 
He hoped Trump would not abandon multilateralism and free trade, said European Economic Affairs Commissioner Pierre Moscovici. "We can discuss, we can have different appreciations, but we are in the same world and in the same boat," he told reporters.
 
A senior U.S. Treasury official said that concerns about risks to global growth from the Trump administration's policy proposals, including tax reform, were raised by several officials at the G7.
 
With major cuts for businesses and ease business regulatory burdens, Trump has vowed to revamp the U.S. tax code.
 
Bowing to an increasingly protectionist United States, ministers dropped their traditional pledge to keep global free trade open at a meeting in March of the larger Group of 20 finance ministers in Germany.
 
Mnuchin, told reporters he was "excited" about the emerging new U.S. trade policy.” He skipped the opening session in Bari where academics spoke on inequality and growth and arrived long after other ministers.
 
"I think you probably saw last night we made an announcement of a 100-day economic plan with the Chinese, so I think we are very happy with how we are proceeding on trade," he said.
 
An Italian G7 official told the media that the G7 will use the same language on trade, currencies and monetary policy as the G20 did in March in their closing statement on Saturday.
 
The G20's reference to trade said only that they were "working to strengthen the contribution of trade to our economies."
 
The U.S. president wants to re-negotiate the North American Free Trade Agreement (NAFTA) and has already pulled out of the Trans Pacific Partnership (TPP).
 
(Source:www.reuters.com) 






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