EU representatives have placed free trade on the top of the G20 agenda ahead of the upcoming summit in Washington, and are also pushing for fairer trading practices amid elevated concerns of a slowdown in global economic growth.
Kristian Rouz — European Union (EU) officials plan to call on the Group of Twenty of the world’s largest economies (G20) to tackle structural and underlying challenges to the international flow of goods and services that threaten to hinder global economic growth.
The EU is set to make its statement at the upcoming G20 forum this week, while also addressing such issues as Brexit and the slowdown in the Chinese economy.
According to reports, the EU’s internal documents suggest the bloc is concerned with the threats posed by higher tariffs, slowing consumer demand, and weakening manufacturing activity across the globe. EU representatives are planning to sound off at the G20 finance ministers’ summit in Washington DC on 11-12 April, focusing on hastening the resolution of the dispute between the US and China over bilateral trade, intellectual property rights, and forced technology transfer.
“Current trade tensions put the ongoing expansion at risk and are therefore a source of concern,” a joint declaration by the EU’s finance ministers, released Saturday, read.
EU officials also said the bloc and China might issue a joint address in Brussels, which could possibly coincide with the G20 gathering.
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The EU and China are expected to highlight the deepening bilateral trading relations, particularly in the wake of Italy’s recent accession to the China-led Belt and Road scheme, which the two nations hope will boost investment and the exchange of technology.
The EU is set to address the possible risks posed by Brexit as well, as the UK’s internal debate over a divorce agreement is taking longer than initially planned. In this light, a ‘no-deal’ scenario is still a possibility. Some investors say this could deal a significant blow to financial markets, not just in Europe, but across the globe.
Vice President of the European Commission Valdis Dombrovskis said EU officials plan to put Brexit on the G20 agenda, and heated discussions are expected. The Trump administration has repeatedly said it would deepen its trading and economic ties with the UK regardless of the outcome of Brexit.
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Some US officials, including National Security Adviser John Bolton, have suggested a ‘no-deal’ Brexit would not pose as big a problem as some investors believe.
However, the EU believes the international trading system is facing elevated political and economic tensions, and that it’s better if they’re defused before they produce tangible risks to global economic expansion.
“The international community has to tackle the root causes of the ongoing trade tensions by ensuring a level playing field for open and free trade in goods and services, investment and intellectual property rights,” the EU said in the joint statement.
The statement’s language somewhat resembles the Trump administration’s calls for free and fair trade internationally. However, it remains unclear if the EU will be able to achieve a trade deal with the US, which both sides have repeatedly called for. US President Donald Trump has threatened to introduce steep tariffs on German auto imports; this has stirred some concerns among German manufacturers.
However, the prospect of fiercer competition from US carmakers in the European market appears to be hardly encouraging, due to weakening auto sales across the EU over the past few months. The bloc’s economic powerhouse Germany is facing elevated risks of a recession.
“We reaffirm our commitment to keep the global economy open as well as rules-based, to support an inclusive multilateral trading system with the World Trade Organisation (WTO) at its centre and to keep international economic cooperation on track,” EU officials said.
This part of the EU’s statement could provoke some Brexit-related controversy. Some UK officials among the so-called hardline Brexiteers have said Britain could leave the bloc without a deal, returning to WTO rules in cross-Channel trade. However, EU officials have threatened severe disruptions in trading relations with the UK in the event of a ‘no-deal’.
However, the bloc’s endorsement of WTO rules in the G20 statement could contradict the EU’s stance on Brexit.
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The US, in the meantime, has a problem with the WTO, as Trump’s trade policies have caused tensions and threats of WTO lawsuits being filed against the US by some of its trading partners. Trump allegedly considered a US withdrawal from the WTO several months back — such speculation was later dismissed by Treasury Secretary Steven Mnuchin.
Nonetheless, US officials believe the WTO makes it harder to prevent problems such as forced technology transfer and non-tariff trade restrictions.
EU officials stressed they are expecting heated debates at the G20 meeting, and it is still unclear whether the US, EU, and China — among other major economies — will be inclined to settle their differences on trade.
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