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G20 financial chiefs agree open trade is key to growth-Schaeuble

19 March 2017

Ministers from G20 nations have gathered in the picturesque western German spa town of Baden Baden since Friday for a meeting clouded by fears of growing protectionism fuelled by Trump's stance.

"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.

They see that formulation as a way to hem in the economic nationalism advocated by President Donald Trump's "America First" platform. Despite Mr Trump's robust rhetoric against free trade and trading partners, the new United States treasury secretary insisted he was more interested in solutions that avoided confrontation.

The G20 financial leaders on Saturday reaffirmed their commitment to refrain from competitive currency devaluation, a key agreement as the United States has repeatedly complained that some of its trade partners are using artificially devalued currencies to gain a trade advantage.

The separate issue of climate change has also become a sticking point, participants said, noting that the USA delegation is reticent to sign up to previous pledges to help fund mitigation programmes.

U.S. Treasury Secretary Steven Mnuchin gestures as he arrives at the G20 finance minister meeting in Baden-Baden, southern Germany, Friday, March 17, 2017. "Free trade has led to a lot of bad things happening".

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The failure by ministers to agree on trade and climate action was met with dismay by France, whose Finance Minister Michel Sapin said: "I regret that our discussions today were unable to reach a satisfying conclusion".

Trump's anti-globalisation agenda wins against the bloc's decade-old tradition of rejecting protectionism.

The draft of final joint communique of meeting, which gathered G20 finance ministers and central bank chiefs, has been agreed and includes provisions on global trade, German Finance Minister Wolfgang Schauble said on Saturday. That could include job training and education, since the International Monetary Fund says trade and globalization have benefited higher-skilled workers. He said trade agreements need to be "free and fair" and balanced.

19 countries worth most of the global economy, plus the European Union - are also due to discuss their longstanding ban on manipulating currencies to gain economic advantage. "But it is not very clear what (protectionism) means to each (minister)".

The outcome of the first face-to-face talks between Aso and Mnuchin could be a relief to Japanese officials concerned about the USA piling pressure on Japan over currency policy. This more casual meeting of finance ministers will be followed by a formal gathering of national leaders in Hamburg, Germany, in July.