USA treasury secretary Steven Mnuchin moves to ease trade fears

Katie RamirezMar 19, 2017

"We both agreed on the importance of maintaining a series of past pledges (over currencies) by the G-7 and G-20 countries", Aso told reporters after his first meeting with Mnuchin on the sidelines of a meeting of Group of 20 finance chiefs in Baden-Baden, Germany.

The meeting of 20 finance ministers from the world's largest economies ended after two days with no agreement supporting the group's decade-old tradition of promoting free trade and rejecting protectionism.

"We were all convinced that world trade leads to global growth", Schaeuble said during a news conference after the talks.

The first meeting of G20 financial ministers after US presidential election takes place against the backdrop of possible protectionism measures repeatedly announced by US President Donald Trump.

Trump's top trade adviser, Peter Navarro, previously accused Germany of using a "grossly undervalued" euro in order to gain advantage over the USA and its own European Union partners.

Europe wants to keep G-20 language rejecting protectionism but the US wants reciprocal treatment or fair trade.

But Mnuchin suggested that the United States may in future look to renegotiate long-standing deals, including those agreed within the framework of the WTO.

On Friday, Finance Minister Taro Aso and U.S. Treasury Secretary Steven Mnuchin agreed to maintain existing worldwide agreements on currencies, including a pledge to avoid competitive devaluations.

"I regret that our discussions today were not able to reach a satisfactory conclusion on two priorities that are absolutely essential in today's world", French Finance Minister Michel Sapin said. "We are for free, regulated global trade, with rules respected by everyone".

Trump, whose tough protectionist talk helped win him the presidency, has withdrawn the United States from a trans-Pacific free trade pact and attacked export giants China and Germany. A joint statement to be issued Saturday is likely to repeat the past stance on forex.

PHOTO Japanese Finance Minister Taro Aso, left, and U.S. Treasury Secretary Steven Mnuchin meet for talks ahead of the G-20 Finance Ministers meeting in Baden-Baden, southern Germany, Friday.

Some advocates, like the International Monetary Fund, readily concede that the benefits of free trade have been uneven across societies, as less skilled workers lose out and the better trained prosper. "But it wasn't clear what one or another meant by that".

In relation to Berlin, Mnuchin told reporters on Thursday he had listened to Schaeuble's argument that Germany's export surplus was as a effect of the European Central Bank setting the interest rates for all 19 euro area countries. This more casual meeting of finance ministers will be followed by a formal gathering of national leaders in Hamburg, Germany, in July.

The gathering will help set the tone for global commerce and finance and will give Mnuchin a chance to clarify what the USA position is.

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