Global concerns about the possibility of an eruption of a trade war featured prominently as the first G20 meeting of Finance Ministers and Central Bank governors concluded today in Buenos Aires. Also making an appearance was a seeming consensus to consider the implications of what the ministers opted to call “crypto-assets.”
With Argentina requesting an exemption on potential US steel tariffs yet again, US Treasury Secretary Steven Mnuchin calling for “free, fair and reciprocal” trade and French Finance Minister Bruno Le Maire insisting that Europe expects an exemption without condition on the tariffs, there was more talk of trade at the press conferences after the G20 wrapped up than in the final communiqué itself.
As such, the communiqué released by the ministers and governors notes that “International trade and investment are important engines of growth, productivity, innovation, job creation and development. We reaffirm the conclusions of our Leaders on trade at the Hamburg Summit and recognise the need for further dialogue and actions. We are working to strengthen the contribution of trade to our economies.”
The language in the communiqué must be agreed to unanimously by the G20 members and the paragraph was the only one that explicitly addressed trade, a topic which has hung over the meeting on both days. The option to call for more dialogue is in line with the statement released after the Leaders’ Summit in Hamburg last year.
At the closing press conference both Treasury Minister Nicolás Dujovne and Central Bank President Federico Sturzenegger emphasized that the G20 had backed free trade. Responding to questions about trade tensions during the two-day meeting, Dujovne said that “above and beyond the G20 conversations, Argentina reaffirms its commitment to multilateralism and rules-based trade, and the World Trade Organization” while noting publicly that he had asked Mnuchin to exempt Argentina from looking steel and aluminum tariffs.
“There wasn’t a feeling during the meeting that we’re on the verge of a trade war” said Dujovne, arguing that the the tariffs were very specific and wouldn’t trigger a broader conflict. His comments were not echoed by other G20 countries.
Mnuchin, who clearly said that the United States did not seek a trade war but “we don’t fear one”, stressed today that the measures proposed by the Donald Trump administration were not “protectionism but free, fair and reciprocal trade, that we want the same opportunities for our companies that others have in the United States.”
Responding to the possibility of counter-measures, Mnuchin said “we need to be prepared to act in the US’s interest to defend free and fair reciprocal trade. In doing that there is always a risk if we put tariffs on, that other people will reciprocate. That president has said that we are not afraid of getting into a trade war, given the size of our market, given the size of our economy, and given the fact that we have a trade deficit. Having said that, it’s not our goal.”
Speaking shortly after Mnuchin, Le Maire said that there “were no civilized trade wars” and that any trade war would leave only losers. Le Maire as such underlined that he “fully expected an exemption for the European Union” with regard to steel and aluminum tariffs, without conditions, and that he had as such to Mnuchin during the closed-door meetings. By the same token, the French ministers added that he was in agreement that there was “steel overcapacity” on the global scale and offered to explore opportunities to resolve the issue that did not resort to protectionism, pointing instead to multilateral forums to find solutions.
Finding a name for cryptos
The final communiqué also tackled what it called innovation and “crypto-assets,” the term preferred by the Finance ministers and Central Bank governors for cryptocurrencies. For the G20, the cryptocurrencies do not qualify as currencies, but the group have promised to monitor them more closely and to explore the possibility of looking into holding them to anti-money laundering and anti-terrorism financing standards.
The communiqué notes that “we acknowledge that technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly. Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing. Crypto-assets lack the key attributes of sovereign currencies. At some point they could have financial stability implications. We commit to implement the FATF standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation.”
Le Maire did note that the technology underpinning the crypto-assets could be of a benefit to financial markets, in line with comments by Brazilian Central Bank President Ilan Goldfajn.
Sturzenegger made it clear that the matter will be a priority for the Argentine presidency of the G20.