G7 Finance Ministers Meet In Italy

Owen Stevens
May 20, 2017

Canadian Finance Minister William Morneau, right, talks with President of the German Central Bank Jens Weidmann as they exit the Castle of Bari, venue of the G7 of Ministers of finance, in Bari, southern Italy, Friday, May.

In the final communique, the ministers and governors only mentioned that they were "working to strengthen the contribution of trade to our economies".

Finance ministers and central bank governors from the world's seven biggest economic powers have kept their watered-down promise to promote free trade, as the new USA administration's reluctance to commit to a full-throated defence against protectionism remained firm. Since taking office, his administration has issued a report that names two G-7 countries, Germany and Japan, for special monitoring due to their large trade surpluses with the USA and has sparked a trade battle with Canada, another G-7 country, by imposing higher tariffs on imports of Canadian softwood lumber.

Mnuchin told reporters that he did not think Friday's attack showed the financial system was unprepared but he said more could still be done at the company level.

But he said the continued uncertainty about the direction of USA policy represented a risk, echoing comments made on Friday by Japanese Finance Minister Taro Aso.

Whilst the message of the meeting was predominantly a repetition of the G20 meeting held in March, reiterating the nations' commitment to free trade, the US Treasury Secretary Steven Mnuchin hinted the US no longer intends to contribute to strengthening worldwide trade ties between nations, putting their own economic interest first. A U.S. Treasury spokesman said Mnuchin will brief his counterparts in Bari on the Trump administration's still-emerging plans to revamp the U.S. tax system - with major cuts for businesses - and ease regulatory burdens.Reflecting tensions over Trump's attitude to protectionism, there will be no formal discussion of trade in Bari, Italian Treasury officials said.

Trump has proposed slashing the USA corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought back home.

Trade was kept off the official agenda during the meeting. The Organization for Economic Cooperation and Development, a group representing many advanced economies, has urged the U.S.to lower its corporate tax rate.

"While many potential policy responses are largely domestic, some of them require, by definition, a collective effort", it stressed.

In their closing statement, the finance ministers warned that long-term growth could remain subdued and that steps need to be taken to make the global economy work for everyone.

Mnuchin said he "couldn›t be happier with the last two days".

Meanwhile, the Group of 7 (G7) countries - consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States - said they were not going to be caught flatfooted again. The European Union also attends meetings of the group.

Other reports by VgToday

Discuss This Article

FOLLOW OUR NEWSPAPER