Logo of Phnom Penh Post newspaper Phnom Penh Post - Leaders of G20 urge dialogue over mounting trade tensions

Leaders of G20 urge dialogue over mounting trade tensions

Content image - Phnom Penh Post
Argentina’s President Mauricio Macri (third left), Economy Minister Nicolas Dujovne (second left) and Central Bank President Luis Caputo (fourth left) hold a meeting with US Secretary of the Treasury Steven Mnuchin (second right) and US Chairman of the Federal Reserve Jerome Powell (right) in Buenos Aires on Sunday. PRESIDENCIA ARGENTINA/afp

Leaders of G20 urge dialogue over mounting trade tensions

Group of 20 members pleaded on Sunday for increased dialogue to defuse escalating trade tensions that could hit global economic growth hard.

Finance ministers and central bankers from 20 leading economies closed a two-day meeting in Buenos Aires warning that “heightened trade and geopolitical tensions” threaten the economic expansion.

It comes at a time when US President Donald Trump’s protectionist policies have provoked ire from traditional allies such as the European Union, Canada and Mexico, and sparked a series of retaliatory measures.

The G20’s final communique stressed “the need to step up dialogue and actions to mitigate risks and enhance confidence” amidst fears of an escalating global trade war.

While the statement did not mention the United States, which is at the center of trade disputes with G20 members China, the EU and others, it demonstrated more concern than in March, when the group avoided the issue altogether.

Argentina’s Economy Minister Nicolas Dujovne hinted that the G20 could not afford a rupture over trade disputes, which he said should be resolved directly between governments or through the World Trade Organization.

“It’s not about denying differences,” Dujovne told reporters at the conclusion of the meeting. But “we have to try to emphasise consensus because we recognise the importance of keeping this group alive and in harmony”.

During the 2008 global financial crisis the G20 was critical in preventing an even worse outcome and saved millions of jobs, he said, noting that “it’s in the bad times when you see how essential it is.”

But Treasury Secretary Steven Mnuchin reiterated his claim that the US merely wants “more balanced trade” with other countries.

Cool heads needed

Mnuchin also dismissed the economic impact of the raft of tariff hikes and retaliatory duties, saying so far they have only affected the US on a “micro” scale. But from a “macro standpoint we do not yet see any significant pattern on the economy”.

US businesses have been hit with a series of punitive measures by China, the EU, Canada and Mexico, including tariffs on soybean, motorcycles, bourbon and other goods, while manufacturers are complaining about rising prices of key supplies subject to new US duties.

EU finance chief Pierre Moscovici hit out at Trump’s protectionist policies, but said cool heads are needed to resolve the dispute.

The US and EU have been at loggerheads since Trump angered European allies by imposing tariffs on steel and aluminum. He also has threatened to hit auto imports with duties which would be especially hard for Germany.

While the EU is “willing to build bridges”, Moscovici told reporters “we believe targeting us is certainly inappropriate . . . and that we must act with the US as allies – not foes but allies”.

Mnuchin insisted the US wants to “resolve the trade issues with the EU” and the complaint often is more about “non-tariff barriers” than tariffs.

“We have a trade imbalance with many countries as a result of not exactly free and fair trade,” he said.

Earlier in the meeting he said the dispute with the EU could be resolved by agreeing to trade with no tariffs, no barriers and no subsidies.

Moscovici warned that “further trade escalation conflicts would negatively affect” all the countries involved, the US included. Protectionism benefits no one, he said, and creates “no winners, only casualties”.

The head of the International Monetary Fund Christine Lagarde agreed, and again spoke out against the tit-for-tat tariffs and urged that “trade conflicts be resolved via international cooperation without resort to exceptional measures.”

The IMF warned recently that in a worst-case scenario, $430 billion of global GDP – or a half percentage point – could be lost in 2020 if all tariff threats and retaliations are carried out.

As well as imposing tariffs of 25 percent on steel and 10 percent on aluminum, Trump hit China with a 25 percent punitive levy on $34 billion of goods, with tariffs on the way on an additional $16 billion, and $200 billion more under consideration.

And in a television interview aired last week, Trump threatened to impose duties on the entire $500 billion of goods the US imports from China.

The US has long complained that China steals US technology through forced transfers or outright theft, and the issue is at the heart of Trump’s trade offensive.

Mnuchin said: “We want to have the right to protect our IP and our technology, anywhere in the world – that’s not just China specific.”

MOST VIEWED

  • ADB says Kingdom to lose 390,000 jobs

    The Asian Development Bank (ADB) predicts Cambodia will suffer 390,000 job losses this year due to the Covid-19 pandemic. But it congratulated the government for its response to the crisis and its cash transfer programme for the poor and vulnerable. Last Wednesday, the ADB approved a $250

  • Fish with human-like teeth makes splash

    An image of a fish of the family Balistidae with human-like features made its rounds on social media after a Twitter user snapped a photo of his catch in Malaysia. The original post has received 675 comments, 8,200 retweets and more than 14,000 likes as of Tuesday. Astonishing

  • Gov’t not using EU aid for poor

    Prime Minister Hun Sen on Tuesday refuted as “baseless”, claims that the government had used financial aid from the EU to implement the programme to identify and support poor and vulnerable people during the Covid-19 pandemic. The prime minister was responding to Roth Sothy, a

  • Royal Group inks $35 million road deal on Koh Rong

    Royal Group Koh Rong Development Company and Sinohydro Corporation Limited reached a $35 million deal on Tuesday to build a 70km road on Koh Rong Island. The road will be 8m wide and is expected to take 16 months to complete, according to the plan approved by

  • Thai fence said to prevent illegal crossing

    Battambang and Banteay Meanchey provincial police say Thailand is not invading Cambodia after a series of social media posts about fences being built on the border raised alarms. Banteay Meanchey police chief Ath Khem said on Tuesday the information on social media on Sunday and

  • Nine more students from Saudi Covid-19 positive

    Prime Minister Hun Sen said preventing the spread of Covid-19 depends on each citizen. He expressed concern that the pandemic will continue for longer. Hun Sen said this after nine Cambodian students who recently returned to the Kingdom from Saudi Arabia were found to be

  • PM to vet NY holiday dates

    The Ministry of Economy and Finance submitted a letter to Prime Minister Hun Sen asking him to formally set a five-day national holiday from August 17-21 to make up for the Khmer New Year holiday in April that was postponed. Finance minister Aun Pornmoniroth sent

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post