G-20 summit acquiesces to US, drops free-trade pledge

Franceís Finance Minister Michel Sapin (R) and Bank of France governor Francois Villeroy de Galhau attend a press conference after the G20 Finance Ministers and Central Bank Governors Meeting in Baden-Baden, southern Germany, on Saturday. (AFP)
Updated 19 March 2017
0

G-20 summit acquiesces to US, drops free-trade pledge

BADEN-BADEN: Financial leaders of the world’s biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist US after a two-day meeting failed to yield a compromise.
Breaking a decade-long tradition of endorsing open trade, G-20 finance ministers and central bankers made only a token reference to trade in their communique on Saturday, a clear defeat for host nation Germany, which fought the new US government’s attempts to water down past commitments.
In the new US administration’s biggest clash yet with the international community, G-20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after US President Donald Trump called global warming a “hoax.”
In a meeting that some said was at times 19 against one, the US did not yield on key issues, essentially torpedoing earlier agreements, as the G-20 requires a consensus. Still, the dialogue was friendly and non-confrontational, leaving the door open to a future deal, officials who attended the meeting said.
“This is my first G-20, so what was in the past communiqué is not necessarily relevant from my standpoint,” US Treasury Secretary Steven Mnuchin said.
“I understand what the president’s desire is and his policies, and I negotiated them from here,” Mnuchin said. “I could not be happier with the outcome.”
Seeking to put “America First,” Trump has already pulled out of a key trade agreement and proposed a new tax on imports, arguing that certain trade relationships need to be reworked to make them fairer for US workers.
“We believe in free trade, we are in one of the largest markets in the world, we are one of the largest trading partners in the world, trade has been good for us, it has been good for other people,” Mnuchin said. “Having said that, we want to re-examine certain agreements.”
International trade makes up almost half of global economic output and officials said the issue could be revisited at a meeting of G-20 leaders in July.
While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute.
“It is not that we were not united,” German Finance Minister Wolfgang Schaeuble said. “It was totally undisputed that we are against protectionism. But it is not very clear what (protectionism) means to each (minister).”
He added that some ministers did not have a full mandate to negotiate since they were not fully in charge of trade issues.
Others suggested that the G-20 leaders’ meeting in Hamburg this July could be the real opportunity to bring the US on board.
“It is not the best meeting we had, but we avoided backtracking,” EU Economic Affairs Commissioner Pierre Moscovici said. “I hope in Hamburg the wording will be different. We need it. It is the raison d’etre for the G20,” Moscovici said.
The communique also dropped a reference, used by the G-20 last year, on the readiness to finance measures against climate change as agreed in Paris in 2015.
Trump has suggested global warming was a “hoax” concocted by China to hurt US industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions.
Leaders also upheld their commitments to financial sector regulation, supporting the finalization of bank rules known as Basel III, provided they do not significantly raise overall capital requirements.


Abu Dhabi, Shanghai plan exchange focusing on China trade

Updated 24 April 2018
0

Abu Dhabi, Shanghai plan exchange focusing on China trade

DUBAI: The emirate’s international financial center, has agreed in principle with the Shanghai Stock Exchange to cooperate in establishing an exchange focusing on China’s foreign trade and investment, ADGM said on Monday.
The partners signed a memorandum of understanding to develop the exchange in Abu Dhabi. It would cater to companies and investors involved in China’s Belt and Road initiative, a Beijing-backed drive to win trade and investment deals along routes linking China to Europe.
“At ADGM, we have the international platform to serve different kinds of enterprises and investors — global, regional and local — seeking exposure to the Middle East and North Africa and Belt and Road projects,” said Richard Teng, chief executive of ADGM’s Financial Services Regulatory Authority.
Teng said he could not give specifics of which instruments the new exchange would trade or when it might open, saying this would depend on demand among stakeholders in both ADGM and Shanghai.
Chinese financial institutions have approached ADGM to discuss the financial environment in Abu Dhabi and their development needs in the six-nation Gulf Cooperation Council (GCC), he added.
Trade and investment ties between China and the GCC have been growing rapidly. The region is a big oil supplier to China, and Sino-United Arab Emirates trade exceeded $46 billion in 2016, according to Beijing’s official Xinhua news agency.
Ultimately, the new exchange will support not only the Belt and Road initiative but also the internationalization of the Chinese yuan in the region, Teng said.
Abu Dhabi is trying to build up ADGM, which opened in October 2015 and is smaller than the international financial center in neighboring Dubai, as part of a drive to develop its economy beyond oil exports.