2019 G20 Summit Japan

Leaders from the Group of 20 acknowledge that trade and geopolitical frictions have escalated, as they wrapped up a summit in Japan dominated by the US-China trade war.

"Most importantly, trade and geopolitical tensions have intensified," the G20 leaders say in a statement. — AFP

source: philstar.com

G20 frets over global economy amid US-China trade war

FUKOUKA, Japan —The world's top finance policymakers Sunday weighed the impact of ballooning trade tensions on the global economy amid differences over the extent to which they are dragging on growth.

Finance ministers and central bank chiefs from the G20 group of the world's top economies are expected to note the "downside risks" to the global economy from trade battles, notably between the top economic superpowers China and the US.

Japanese Finance Minister Taro Aso, who is hosting the talks, told reporters as the first day of talks wrapped up on Saturday that the world economy should "firm" in the second half of the year but "downside risks still remain."

Aso said "market confidence could be eroded" if there were no rapid resolution to the ongoing trade war between Beijing and Washington, which has seen the world's top two economies impose billions of dollars of tit-fir-tat tariffs and threaten even tougher action.

IMF chief Christine Lagarde singled out trade tensions as the "major" headwind facing the global economy, adding that it was a "significant risk on the horizon," in an interview with Japan's Nikkei daily on Sunday.

Lagarde has previously described the trade wars as a "self-inflicted wound" and warned that US-China tariffs so far imposed and threatened could trim 0.5 percentage points off global GDP growth next year -- an amount $455 billion larger than the entire South African economy.

Meanwhile, French Finance Minister Bruno Le Maire said there was a "real risk" that "this global economic slowdown could turn into a global economic crisis due to trade tensions."

"A worsening of the international climate and a real trade war would lead to an even more marked slowdown in global growth, with a direct impact on our jobs, companies, factories and sectors," Le Maire told AFP in an interview on the sidelines of the meeting.

A Japanese official who declined to be named briefed reporters that "very many countries voiced concerns that escalation of the trade friction is a very significant downside risk to the world economy. That is a fact."

'Big economic opportunity' 

However, the treasury secretary from the US, which continues to threaten more tariffs on China if there is no trade deal, played down the risk of a global economic conflagration.

"Clearly there is a slowdown in Europe, there's a slowdown in China, there's a slowdown in other parts. I don't believe that's as a result of trade tensions. That slowdown has gone on for the last year," Steven Mnuchin told reporters on Saturday.

He acknowledged that other policymakers had voiced concerns over the economic impact of a prolonged trade war but pointed to a potential boon for other countries.

As companies move out of China in order to avoid US tariffs, "there's going to be a big economic opportunity for a lot of other countries," he said.

"There will be winners and losers," he predicted.

Nevertheless, Mnuchin also pointed to the positive boost to the world economy that could result from a breakthrough in trade talks, likely to be the main focus of a meeting between the US and Chinese leaders at a G20 summit later this month.

"I think if we get a deal, it's a very positive thing for economic growth, for us, for China, for Europe, for the rest of the world. The opening of these economies tends to lead, in my mind, to more growth on both sides," said Mnuchin.

source: philstar.com

All eyes on first Trump-Putin face-to-face at G20

HAMBURG — U.S. President Donald Trump and Russian President Vladimir Putin are set to size each other up in person for the first time on Friday in what promises to be the most highly anticipated meeting on the sidelines of the G20 summit.

Trump has said he wants to find ways to work with Putin, a goal made more difficult by sharp differences over Russia’s actions in Syria and Ukraine, and allegations Moscow meddled in the 2016 U.S. presidential election.

That means every facial expression and physical gesture will be analyzed as much as any words the two leaders utter as the world tries to read how well Trump, a real estate magnate and former reality television star, gets along with Putin, a former spy.

The fear is that the Republican president, a political novice whose team is still developing its Russia policy, will be less prepared than Putin, who has dealt with the past two U.S. presidents and scores of other world leaders.

“There’s nothing … the Kremlin would like to see more than a (U.S.) president who will settle for a grip and a grin and walk away saying that he had this fabulous meeting with the Kremlin autocrat,” Representative Adam Schiff, the top Democrat on the House of Representatives’ Intelligence Committee, said in an interview on MSNBC.

As investigations at home continue into whether there was any collusion between Trump’s presidential campaign and Russia the U.S. president has come under pressure to take a hard line against the Kremlin.

Moscow has denied any interference and Trump says his campaign did not collude with Russia.

On Thursday, Trump won praise from at least one Republican hawk in the U.S. Congress after his speech in Warsaw in which he urged Russia to stop its “destabilizing activities” and end its support for Syria and Iran.

“This is a great start to an important week of American foreign policy,” said Republican Senator Lindsey Graham, who has often been critical of Trump on security issues.

But earlier in the day, Trump declined to say definitively whether he believed U.S. intelligence officials who have said that Russia interfered in the 2016 election.

“I think it was Russia but I think it was probably other people and/or countries, and I see nothing wrong with that statement. Nobody really knows. Nobody really knows for sure,” Trump said at a news conference, before slamming Democratic former President Barack Obama for not doing more to stop hacking.

Senators’ concerns

Ahead of Trump’s meeting with Putin, three U.S. senators wrote to Trump to express “deep concern” about reports that his administration planned to discuss the return to Russia of diplomatic compounds in Maryland and New York that were seized by the Obama administration last year in response to alleged Russian election meddling.

Republican Senators Johnny Isakson and Marco Rubio and Democratic Senator Jeanne Shaheen said returning the facilities would “embolden” Putin and encourage further efforts by Russia to interfere in Western elections. All three are on the Senate Foreign Relations Committee.

The White House declined to offer details on what Trump would request of Putin and what he might offer in exchange for cooperation.

U.S. Secretary of State Rex Tillerson said Trump wanted to talk about how the two countries can work together to stabilize war-ravaged Syria.

“The United States is prepared to explore the possibility of establishing with Russia joint mechanisms for ensuring stability, including no-fly zones, on-the-ground ceasefire observers, and coordinated delivery of humanitarian assistance,” Tillerson said before leaving the United States to join Trump in Germany.

Trump was also grappling with a response to North Korea’s successful test of an intercontinental ballistic missile, which analysts say had a long enough range to reach Alaska.

Curbing Pyongyang’s nuclear ambitions has been Trump’s most pressing foreign policy priority, and he met with leaders from Japan and South Korea on Thursday evening to discuss it. He is also slated to meet with Chinese President Xi Jinping at the G20.

“I’d like to see the president figure out how to engage Russia on North Korea,” said Representative Francis Rooney, a Republican from Florida who is on the House Foreign Affairs Committee.

“What I suggested to the president here a while back was that since we have all these conflicting issues about Russia right now and we’re still reeling from the fact that they took Crimea, maybe this is an opportunity to reset the Russia relationship in a positive manner,” Rooney said in an interview.

source: interaksyon.com

G20 pledges to refrain from currency warfare

MOSCOW - G20 finance ministers on Saturday moved to calm fears of looming "economic warfare" on the currency markets, pledging they would not target specific forex rates or devalue currencies to make them more competitive.

The jitters -- similar to previous disputes with China -- have been set off by Japan's plan of monetary easing to boost inflation and activity by reducing the value of the yen under new Prime Minister Shinzo Abe.

"We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes," said the communique after the G20 finance meeting meeting in Moscow under Russia's presidency.

It echoed a similar recent statement by the G7 richest nations which like the G20 statement was also approved by Japan, whose monetary policy has been vehemently criticised by the West in recent weeks.

The statement made clear that forex rates should be set by markets, and not intervening governments.

It affirmed the G20's commitment to move "more rapidly toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals."

Striving to give the impression of a united front among the world's top 20 economies, the G20 ministers vowed to "work more closely with one another so we can grow together.

British Finance Minister George Osborne had earlier warned of the dangers of slugging out "economic warfare" as countries tried to outdo eachother with successive devaluations.

"Currencies should not be used as a tool of competitive devaluation. The world should not make the mistake that it has made in the past of using currencies as the tools of economic warfare," the British chancellor of the exchequer said.

European capitals fear that devaluations of currencies like the yen would make their own exports less competitive and harm extremely fragile economic recoveries at home.

For the first time in several international meetings, the concerns over currencies have overshadowed the economic troubles of the debt-ridden euro zone which leaders hope is heading to a gentle recovery.

All the G20 states are to a greater or lesser extent faced with the same dilemma -- how to boost fragile growth rates without overextending budget deficits or alienating international partners.

The final communique -- as expected -- stopped short of giving precise budget deficit targets which many governments would have found too tough to stomach.

But it said that "credible medium-term fiscal consolidation plans will be put in place" and implemented taking into account the economic conditions and fiscal possibilities.

Earlier, Britain, France and Germany also launched a new drive to help national budgets by making big business pay full taxes and not minimise payments through schemes such as offshore companies.

The G20 ministers agreed to take measures to combat corporate tax avoidance in coordination with the Organisation for Cooperation and Economic Development (OECD) which is preparing an action plan on measures to be taken in a coordinated move by national governments.

"We are determined to develop measures to address base erosion and profit shifting, take the necessary collective action and look forward to the comprehensive action plan the OECD will present to us in July," the final statement said.

Profit shifting is the practice of shifting profits from the company's home country to pay less tax under another jurisdiction.

source: interaksyon.com