G20 finance ministers ditch anti-protectionist pledge and climate change commitment

 
Rebecca Smith
Philip Hammond was among the finance ministers in Baden-Baden
Philip Hammond was among the finance ministers in Baden-Baden (Source: Getty)

Finance ministers from the world's biggest economies have ditched an anti-protectionist commitment following opposition from the US.

The annual G20 meeting of the 20 financial leaders closed without a set agreement on free trade after the US rejected past commitments regarding the open flow of goods.

The leaders noted the importance of trade to the global economy, saying countries were "working to strengthen the contribution of trade" to their economies, but didn't use the tougher language from before, vowing to "resist all forms of protectionism".

Read more: May: UK will offer lowest corporation tax in the G20

Since President Donald Trump has taken office, he has been vocal in pursuing an "America First" policy and has warned firms would face "consequences" if they moved business operations abroad.

On Thursday, US Treasury secretary Steven Mnuchin said the Trump administration had no desire to get into trade wars, but that the President wanted "free and fair trade", and some trade relationships needed to be looked at to make them fairer for US workers.

A commitment to financing action on climate change has also been dropped from the joint statement, published at the end of the meeting with the agreement of all attending delegates, after the US and Saudi Arabia opposed the reference to climate change funding in the agreement.

The final joint statement at the summit in Baden-Baden said: "We reaffirm our commitment to rationalise and phase out, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption, recognising the need to support the poor. Furthermore, we encourage all G20 countries which have not yet done so, to initiate as soon as feasible a peer review of inefficient fossil fuel subsidies that encourage wasteful consumption."

Read more: Trumpian protectionism is raising risks to businesses' global supply chains

The leaders did though, reaffirm a commitment to refrain from competitive currency devaluation and pledge to fight tax avoidance.

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