BUENOS AIRES: Finance ministers and central bankers from the world’s largest economies said yesterday that heightened trade and geopolitical tensions risk derailing global growth, and called for greater dialogue, according to the final communique of a G20 meeting.
The weekend talks in Buenos Aires come at a time of escalating rhetoric in the trade conflict between the US and China, the world’s largest economies, which have so far slapped tariffs on $34bn worth of each other’s goods. US President Donald Trump raised the stakes on Friday with a threat to impose tariffs on all $500bn of Chinese exports to the US unless Beijing agrees to major structural changes to its technology transfer, industrial subsidy and joint venture policies.
The communique noted that global economic growth was robust and unemployment was at a decade low. However, it warned that growth was becoming less synchronised among major economies and downside risks over the short- and medium-term had increased.
“These include rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth, particularly in some advanced economies,” said the communique. The ministers reaffirmed the conclusions from G20 leaders at their most recent summit in Hamburg last July, when they emphasized that trade was an engine of global growth and that multilateral trade agreements were important.
“We recognise the need to step up dialogue and actions to mitigate risks and enhance confidence,” the communique said.
The language marked an incremental toughening from the communique issued at the previous ministerial meeting in March, which had only noted that the leaders “recognise the need for further dialogue.”
“The latest language suggests a great deal of urgency about resolving these issues,” Australia Treasurer Scott Morrison said in an interview, adding that the ministers had made it clear in the discussion that they were concerned about “tit-for-tat measures” and that open trade was the goal.
“The language previously had been a bit ambiguous about that, a bit sheepish.”
“We were in mutual listening mode and
I hope that this is the beginning of something,” European Commissioner for Economic and Financial Affairs Pierre Moscovici said, referring to the G20 negotiations.
US Treasury Secretary Steve Mnuchin has sought to use the meeting to woo Europe and Japan with the offer of free-trade deals, as Washington tries to gain leverage with allies in its dispute with China.