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G20 finance ministers drop anti-protectionist pledge amid US pushback

US finance officials have refused to sign a commitment to free trade, breaking a decade-long tradition and effectively preventing any deal. Action against climate change has also been dropped following US intervention.

Watch video 01:24

G20 ministers drop commitment to free trade

Finance ministers from the 20 leading world powers (G20) concluded talks in the German city of Baden-Baden on Saturday without agreeing on a joint position that would have explicitly renewed their long-standing pledge to free trade.

Following pushback from US officials, led by US Treasury Secretary Steve Mnuchin, the G20 finance ministers' communique backtracked on past commitments, such as promoting open trade and an outright rejection of protectionism.

Watch video 02:38

DW's Bernd Riegert reports from Baden-Baden

Instead, the ministers issued a mildly worded statement, saying that countries "are working to strengthen the contribution of trade to their economies."

Commitments to multilateral trade systems, including the World Trade Organization (WTO), were also conspicuously missing.

While the G20 remains an informal forum and Saturday's statement is non-binding, it does help set the tone for economic and financial policy for the year ahead.

By contrast, last year's statement called on all G20 states to resist "all forms" of protectionism.

On the meeting's fringe, aid groups, including by the Catholic agency Misereor, urged the G20 to grant debt relief, warning that 116 developing nations were severely indebted - up from 33 countries two years ago.

US trade reservations

The meeting marks perhaps the largest clash yet between US President Donald Trump's administration and the international community. According to reports, officials were looking to replace the group's long-standing opposition to "all forms" of protectionism with a new wording that would reflect US concerns and reference "fair" trade. However, no compromise was found.

German Finance Minister Wolfgang Schäuble, who chaired the two-day summit, played down the significance at a press conference, saying the issue was more about wording than substance.

"It's not true we are not agreed," he said. "It's completely clear we are not for protectionism. But it wasn't clear what one or another meant by that.

"At some meetings, you cannot reach all that you want to achieve. But that is something we can live with," Schäuble said.

IMF chief Christine Lagarde said the new White House simply needed time to "adapt and learn."

Watch video 01:37

Mnuchin, Schäuble play down trade tensions

Mnuchin remained upbeat following the summit and said any resistance to the communique was only to ensure that it accurately reflected what was discussed. The US official added that he would not read too much into the US desire to change the "historical language."

"We will strive to reduce excess global imbalances to promote inclusiveness and fairness and reduce inequality," he added.

"We think there are parts of the WTO that are not being enforced and will look to aggressively enforce things in the interest of American workers," Munchin told journalists.

Trump's quest to fulfill his "America First" election platform have already seen the president withdraw the US from an intended trans-Pacific free trade pact and propose a new tax on goods imported into the United States.

The US president has criticized export giants China and Germany over their trade surpluses, prompting a stern warning from Beijing.

Climate change finance off the table 

Finance chiefs also failed to pledge their support to financing steps to prevent climate change. While it was widely anticipated, the move was decried by environmentalists. Trump has expressed his skepticism on the issue, labeling climate change a "hoax" and cutting funding for the US Environmental Protection Agency.

Greenpeace East Asia's Li Shuo said the G20 statement illustrated a "lack of attention to climate change," and added: "Other countries should not allow this to happen again."

Referring to free trade and the climate, French Finance Minister Michel Sapin voiced "regret that our discussions today were unable to reach a satisfying conclusion on two absolutely essential priorities." 

EU Economy Commissioner Pierre Moscovici said, given that the G20's Baden-Baden gathering was the "first contact with this new administration, it would have made no sense to enter into a fight."

"I hope in Hamburg the wording will be different. We need it. It is the raison d’etre for the G20," Moscovici said, referring to the next G20 summit to be hosted in Hamburg in July. Germany currently holds the G20 presidency.

The G20 is an informal forum on economic cooperation made up of 19 countries plus the European Union.

Debt relief urged

Presenting its "Debt Report 2017" on behalf of 188 other groups on Friday, Misereor said a crisis loomed for poorer, indebted nations similar to bitter hardships of the 1980s.

Many of the 116 nations examined, said the report's authors, were increasingly unable to service previous infrastructure loans because of fallen commodity prices.

Such governments were likely to resort to austerity measures, resulting in social breakdown, warned Misereor, while demanding that broad debt relief be granted by wealthy nations and institutions.

"The debt is going to suffocate them," said Mara Liebal of the grassroots group Jubilee Germany.

Oxfam accused G20 ministers, meeting in Baden-Baden's health spa and casino complex, of failing to crack down worldwide on evaders of tax that could otherwise be invested in debt relief.

Watch video 01:13

Protectionism overshadows G20 meeting

dm, ipj/jm (AP, dpa, Reuters)

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