By Ryotaro Nakamaru,
This week's meeting of finance chiefs from the Group of 20 major economies highlighted the rift between the United States and the rest of the world as President Donald Trump moves forward with his protectionist agenda.
Many of the G-20 member countries stressed at the two-day conference in Bali, Indonesia, that free trade has been a crucial driver of growth and that raising barriers would only undermine the current strength of the global economy.
(Trump at a White House press conference on Oct. 1)
[Getty/Kyodo]
But hours after the curtain fell, Trump was boasting about his renegotiation of the North America Free Trade Agreement, a pending deal his administration won by threatening to pull out and impose tariffs.
"Happy #NationalFarmersDay! With the recent #USMCA our GREAT FARMERS will do better than ever before!!" he wrote on Twitter early Saturday, using an acronym for the rebranded United States-Mexico-Canada trade agreement.
Finance ministers and central bank governors at the G-20 meeting were particularly worried about the mounting trade tensions between the world's two largest economies, the United States and China.
Argentinian Treasury Minister Nicolas Dujovne, whose country is chairing the G-20 this year, called on the two countries to resolve their differences bilaterally.
"Of course we recognize that we are right now facing trade tensions amongst members...The G-20 can play a role in providing the ground for discussion, but of course the difference that still persists should be resolved by the members that are directly involved in the tensions," he told a press conference after the meeting wrapped up Friday.
The comments appeared to be an admission of the difficulty in building consensus among the G-20 members -- Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
Yoshimasa Maruyama, chief economist at SMBC Nikko Securities Inc., said there was an inherent limit to the role the forum can play in resolving internal tensions.
"The G-20 is effective in coming together to achieve a shared goal, such as combatting a financial crisis. But when the conflict is between members, there's not much they can do."
(Getty/Kyodo)
Trump has accused China of "unfair" trade practices and has invoked tariffs on $250 billion of Chinese imports -- nearly half of the products Americans buy from the country -- drawing swift retaliation from Beijing.
Economists fear the levies will hurt growth not only by decreasing international trade but by disrupting established supply chains. Citing such concerns, the International Monetary Fund downgraded its global growth forecasts for 2018 and 2019 earlier in the week.
Raising hopes for a de-escalation of the dispute, Trump and Chinese President Xi Jinping are reportedly arranging to meet on the sidelines of a G-20 summit in Buenos Aires on Nov. 30 and Dec. 1.
Maruyama said the envisioned talks will serve as a jumping-off point for negotiations but an agreement likely will not be reached until next year.
That means trade tensions could continue to dominate discussions at G-20 meetings in 2019, when Japan takes over as chair for the first time. Japan will host the G-20 summit in Osaka on June 28-29.
A senior Japanese government official said Tokyo is looking to focus on disaster prevention, global imbalances and rising debt levels in developing countries.
But the official, who attended the Bali meeting, said Trump's lack of interest in such issues may become a hurdle in organizing the series of meetings.
