G-20 leaders struggle to find compromise on trade policy

In a pointed challenge to President Donald Trump’s “America First” agenda, leaders of the world’s biggest economies this week are touting an approach that breaks with the past 20 years of global trade – sidestep the United States entirely.

WTO Director General Roberto Azevedo told Reuters it would be concerning to see countries making national security demands within the WTO’s dispute settlement system, the global trade court for the its 164 members.

Given the Trumps newest moves a protectionist trade scenario may affect the U.S. economy and the geopolitical order.

Last week China panned the Trump administration’s proposed approach, which would impose new hurdles for Chinese steel producers that are already subject to more than 100 US antidumping and countervailing duties.

At the talks between the State and Defense Departments and their Chinese counterparts, the U.S. had hoped to elevate and focus discussions with China on key issues in order to break through old sticking points. In its communique, the G-20 pledged renewed efforts to combat excess capacity in the steel industry, according to a leaked copy of the text.

In the summit’s concluding statement, the G-20 noted “the importance of reciprocal and mutually advantageous trade and investment frameworks”. The G-20 will “continue to fight protectionism including all unfair trade practices and recognise the rule of legitimate trade defense instruments in this regard”. US President Donald Trump has vowed to slap tariffs on steel imports to protect American industry, and Washington could start levying the charges as soon as July 13.

It was widely expected that last week the Commerce Department would release the results of its Section 232 investigation.

“We can’t say we’re in danger of not having steel for our military; I don’t think we’re anywhere close to that”, Freund said.

The national-security case for tariffs is weak.

Ahead of the summit, G-20 officials cited concerns that Mr. Trump would go beyond his decision to scrap a 12-country trans-Pacific trade pact and renegotiate America’s trade agreement with Canada and Mexico to undermine broader platforms such as the World Trade Organization.

Russian President Vladimir Putin has been clearer than most about his distaste for Trump’s policies.

“And so solutions can only be found if we are ready for compromise and move towards each other, but without – and I stress this – bending too much, because of course we can also state clearly when there are differences”.

His counterparts are bracing for fresh surprises after Trump stunned the world by pulling out of the 2015 Paris climate pact, questioned long-standing North Atlantic Treaty Organisation allegiances and dismissed free trade principles.

Saturday’s sessions were dedicated to tackling migration and a “partnership with Africa”, digitalisation, empowering women and employment. The U.S. president’s initial months in office have been dominated by the fallout from Russia’s meddling in the U.S. election and allegations about collusion between his campaign officials and the Kremlin.

Moreover, trade diplomats fear USA security-based tariffs on steel would widen cracks in the global trading order, after Saudi Arabia, Bahrain and the United Arab Emirates cited national security at the WTO last week to justify their economic boycott of Qatar. Germany is a large exporter of steel and officials there worry they could be caught in any US crackdown. The countries commissioned a study on the steel market to be delivered in August.