Navigation

G-20 finance chiefs warn of FX rate volatility

Reuters

A general view shows the G20 Finance Ministers and Central Bank Governors Meeting in Baden-Baden, Germany, on Friday.

Reuters BADEN-BADEN, Germany (Reuters) — The world’s financial leaders will renounce competitive devaluations and warn against exchange rate volatility, a document showed on Friday, but are likely to struggle to find common ground on trade and financing against climate change.

The difficulty stems from a major shift in the views of the United States, where the new Trump administration is considering protectionist trade measures to curb imports and considers efforts to try to halt global warming a “waste of money.” Finance ministers and central bank governors of the world’s top 20 economies are meeting in the spa town of Baden-Baden in Germany to discuss world economic issues and will publish a joint communique on Saturday.

A draft of the statement showed that, for now, the issue of trade and protectionism is not mentioned at all. This breaks with a decade-old tradition of the G-20 endorsing free trade and rejecting protectionism.

“It’s about the right wording, it’s about the openness of the world trade systems in the final communique,” German Finance Minister Wolfgang Schaeuble said before talks began.

U.S. Treasury Secretary Steven Mnuchin said on Thursday in Berlin that the Trump administration had no desire to get into trade wars, but certain trade relationships need to be re-examined to make them fairer for U.S. workers.

G-20 officials said the United States was ready to accept a phrase backing “free and fair” trade, given that the meaning of “fair” was open to interpretation. Europe was keen on adding that trade should be “rules-based,” meaning subject to rules of the World Trade Organization (WTO).

European delegations have also explicitly rejected protectionism. Facing a standoff, Schaeuble, whose country holds the rotating presidency of the G-20 this year, has floated the idea that the issue of trade might be left out of the communique altogether to avoid a clash.Speech

Click to play

0:00/-:--

+ -

Generating speech. Please wait...

Become a Premium Member to use this service.

Become a Premium Member to use this service.

Offline error: please try again.