The Finance Ministers and heads of Central Banks of the world’s 20 economies opened the first major G20 meeting to be held in Argentina yesterday, focusing their agenda on trade, infrastructure, and cryptocurrencies.
This week’s meeting is part of a larger process leading up to the summit at the end of the year involving the heads of government.
As a forum for the economies representing 85 percent of the world’s Gross Domestic Product (GDP) and 75 percent of the world trade, the G20 has its roots in financial issues; the meetings yesterday laid the groundwork for the final communiqué to be released today.
As chair of the G20, Argentina has taken the lead at setting the agenda for this year’s Leaders’ Summit, with the finance track picking the infrastructure investment and the future of work as priorities for the closed-door meetings. However, trade seemed to be on the minds of all participants from the beginning.
The meeting has drawn the presence of global economic decision-makers and as such, the brewing concerns of a move toward protectionism – namely steel and aluminum tariffs implemented by the US – made an appearance on the first day.
Treasury Minister Nicolás Dujovne used his meeting with US Treasury Secretary Steven Mnuchin to reiterate his request for Buenos Aires to receive an exemption for Argentine products on the steel and aluminum tariffs that have been announced by Washington. Dujovne’s request is further to the same appeal made by President Mauricio Macri in a phone call with US President Donald Trump and a trip to Washington by Trade Secretary Miguel Braun. At the time of the phone call, the Casa Rosada had indicated that the White House planned on considering such an exemption.
US Trade Representative data shows that Argentina brought in US $332 million in aluminum sales to the US in 2016, denoting one of the top categories for the country. In total, Argentine aluminum represents 4 percent of the total US imports of the metal.
The concerns voiced by Dujovne were echoed by European Economics Commissioner Pierre Moscovici, who expressed warnings about rising protectionism and the threat of inward-looking policies. The European Union has previously issued warnings about the possibility of tariffs being slapped on its steel and aluminum exports to the United States.
“I hope that tomorrow, the G20 communiqué will show that protectionism is not the solution and we must absolutely avoid that,” Moscovici was quoted as saying by Reuters. “A trade war would be stupid. There would be damage on both sides of the Atlantic.” Moscovici also added that discussions about trade had been “polite” so far.
At a brief press conference after which organizers said that there wasn’t time for any questions, Dujovne said that “finding a consensus will not be easy, but it is necessary in order to embark on an agenda of inclusive trade that Argentina has proposed for the G20 in 2018. That is linked closely to this government’s primary objective, which is to reduce poverty.”
Today’s final communiqué will establish to what extent, if any, the skirmishes over trade will be papered over sufficiently into a meaningful consensus moving forward to the Leaders’ Summit.