Trump The Powerful – G20 Finance Chiefs Chickened Out Of “Free Trade”



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Mar 20 2017
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The annual meeting of 20 finance ministers from the world’s top 20 leading economies this year has raised millions of eyebrows. The traditional scripts would normally see a pledge supporting globalization and free trade, while opposing all forms of tariffs and rejecting protectionism. Just when globalists and liberalists expect the leaders to stand up, they chickened out instead.

 

As the G20 meeting closed on Saturday, the meeting saw how 19 of its members dared not go against one member – the United States. Fearing the young Trump administration could upset the global economic order, the rest of 19 financial leaders decided it would be best not to offend President Donald Trump, preferring to be bullied and intimidated instead.

G20 Meeting Germany 2017 - Meeting Venue

The 2-day meeting ended with no compromise after opposition from United States – delivering a humiliating defeat for host nation Germany. Chancellor Angela Merkel has been vocal against President Trump’s protectionism policy, and has even boasted that European Union can continue with free trade and globalization, even without the U.S.’ participation.

 

Without any meaningful resistance from G20 which comprises representatives from China, Japan and European countries, it appears Trump would have a smooth sail promoting his “America First”. Calling it a bad deal, the U.S. president had already signed an executive order against former president Barack Obama’s signature trade deal – Trans-Pacific Partnership (TPP).

No Deal – Trump Signs An Executive Order To Kill Bad Deal TPP

Trump administration has also started the process to renegotiate the NAFTA (North American Free Trade Agreement) with Mexico and Canada. To prevent his boss from losing face, German finance minister Wolfgang Schaeuble argued – “It is not that we were not united. It was totally undisputed that we are against protectionism. But it is not very clear what (protectionism) means to each (minister).”

 

While the Group of 20, comprises 19 nations plus the European Union, struggles to find a substitute word for “anti-protectionism”, U.S. delegate Steven Mnuchin said trade agreements need to be “free and fair” and balanced. The AP reports that Wolfgang Schaeuble suggested there had been tension during the two-day meeting.

G20 Meeting Germany 2017 - German Finance Minister Wolfgang Schaeuble and US Treasury Secretary Steven Mnuchin

The U.S. representative, Treasury Secretary Steven Mnuchin, said that while America remains committed to free trade, the country wants to re-examine some trade deals and correct their excesses. Mnuchin happily said – “I understand what the president’s desire is and his policies, and I negotiated them from here. I couldn’t be happier with the outcome.”

 

Besides Steven Mnuchin, Federal Reserve Chair Janet Yellen was there to represent the U.S. in Baden-Baden, Germany. But it was Mr. Mnuchin who attracted attention with foreign leaders seeking to meet with him. As President Trump’s representative, Mnuchin was described by some European officials as friendly but “tough.”

President Donald J Trump

This marks a win for President Donald Trump and his anti-globalization agenda. Former Morgan Stanley Asia Chairman Stephen Roach said – “It’s pretty disappointing when you get finance ministers from leading countries in the world who, out of the blue, are unable to validate the commitment to anti-protectionism which is the underpinning globalization.”

 

But free trade isn’t the only jewel G20 finance chiefs failed to protect. In another major international clash, Trump administration teamed up with Saudi Arabia to condemn “climate change”. As a result, the G20 has also dropped a pledge to fight against climate change as agreed in Paris 2015. Trump has accused global warming as a “hoax” cooked up by China to hurt U.S. industry.

Donald Trump - Climate Change

On Thursday, Trump’s administration proposed a 31% cut to the Environmental Protection Agency’s budget as climate change is considered a “waste of money”. French Finance Minister Michel Sapin said he regretted that a meeting of world financial leaders had failed to reach satisfactory conclusions on climate change and trade.

 

While his boy easily wins against 19 powerful nations in Germany, Donald Trump was having fun trolling and insulting German Chancellor Angela Merkel at home. Merkel who paid her first visit to Trump was taken by a brutal surprise when the U.S. president took to twitter and claimed that Germany “owes vast sums of money to NATO and United States.”

 

 

 

Earlier, there was slight confusion in the Oval Office when both Merkel and Trump failed to stage a handshake for cameras when requested by journalists. Later in a joint press conference on Friday, Trump expressed “strong support” for NATO but reiterated his belief that member nations do not contribute a “fair share”.

 

According to NATO’s official guidelines, member nations are expected to spend at least 2% of their country’s gross domestic product (GDP) on defence. However, only a handful of the 28 members actually meet that target. NATO countries – including giant economies like Germany, Canada, Spain, and Italy – haven’t been spending 2% of its GDP on defence.

Donald Trump Refuses To Shake Hands With Angela Merkel

Germany and France only spend 1.19% and 1.78% respectively of their GDP on NATO’s defence. In comparison, the U.S. spends the highest proportion of its GDP on defence – 3.61%. Greece is the highest spender from the EU, contributing 2.38% of its GDP, follows by UK (2.21%), Estonia (2.16%) and Poland (2%).

 

The U.S. contributes the most – about 22.14% of the alliance’s roughly US$2 billion operating budget annually. Besides calling NATO alliance “obsolete”, Trump has hinted that US defence of a NATO ally would depend on whether the country was contributing proportionally to the alliance’s defence spending.

 

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