Foreign Trade

G-20 Leaders Find Trade Compromises but Are Split on Climate

7/9/17
from The Wall Street Journal,
7/8/17:

Communiqué reflects differences between U.S., other nations on climate change.

Leaders from the Group of 20 countries vowed Saturday to fight protectionism and secure fair trade, finding a broad consensus after President Donald Trump’s defiantly unilateral stance exposed a rift between the world’s leading economies. In light of the broad political pushback against globalization and the rise in antiestablishment forces in recent years, however, the G-20 stepped back from an unequivocal commitment to free trade for the first time since its inaugural summit in 2008. Instead, it recognized the need for defensive measures in pursuit of balanced trade. In another unprecedented move, the group broke from unanimity in its final communiqué, splitting off the U.S. position on climate change from that of the other members.

In the summit’s concluding statement, the G-20 noted “the importance of reciprocal and mutually advantageous trade and investment frameworks.” But in a nod to concerns of Mr. Trump and other leaders over trade imbalances, the group also said it would “strive to ensure a level playing field.” The phrase seemed to reflect concerns of the U.S. and some European member states over China’s expanding footprint in the global economy.

Securing the support of Mr. Trump, whose “America First” policies pose a potential clash with the international economic order, was the dominant theme among officials as the gathering drew to a close. “The negotiations on the climate issue reflected dissent—everyone against the United States of America,” said German Chancellor Angela Merkel, who held the rotating G-20 presidency over the last year. “And that the negotiations on the trade issue were especially tough was also a result of the United States taking certain positions.” In a tweet on Saturday, Mr. Trump wrote: “The #G20Summit was a wonderful success and carried out beautifully by Chancellor Angela Merkel. Thank you!”

A European official said the talks demonstrated that a new—and different—international consensus on economic issues could be slowly rebuilt despite the challenges thrown up by Mr. Trump’s positions. One bellwether will be an international effort to curb the world’s excess capacity of steel, as Mr. Trump considers unilateral measures to protect the U.S. market. On Saturday, the G-20 agreed to outline by November steps to temper the global overcapacity upending local markets. “All things considered, my impression is that we’re getting back in small steps in many areas to a greater degree of business as usual,” the official said. Yet some leaders warned the statement won’t close deep divides on trade that have emerged since Mr. Trump’s election. French President Emmanuel Macron took swipes at Mr. Trump and others during the two-day summit for equating fair trade with avoiding bilateral deficits. Brandishing his smart phone during the session on trade, Mr. Macron said many products consumed in G-20 countries rely on global production chains, according to delegates. Mr. Trump had left the room when the French leader spoke, they said. “A text does not efface tensions that exist and will continue to exist on this subject for a long time,” Mr. Macron said during a press briefing as the summit concluded, describing the trade approach adopted by the U.S. president as “a profound error.”

The U.S. wasn’t alone in its views on trade, officials said. On some points, such as promoting support for defensive measures against unfair trade, Mr. Trump was joined by other leaders, including the Turkish and EU presidents and Mr. Macron.

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