The risks to improving global growth are increased because of the “intensified” trade and geopolitical tensions, said the Group of 20 finance leaders. They however refrained from passing a resolution about the increasing trade war between the United States and China.

A sort of a moderate support for a rules-based multilateral trading system was expressed by the finance ministers and central bank governors gathered for the G20 summit after a bout of not so friendly negotiations which almost derailed the plan for issuing a communiqué.

“Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020,” the G20 finance leaders said in a communique after the end of the meeting.

“However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action,” the communique read.

The communiqué further reiterated the need for preventing global tech giants such as Facebook and Google from using legal loopholes for reducing their corporate taxes and the finance leaders also pledged to construct a common set of rules by 2020 to plug such loopholes.

Increasing of debt transparency on the part of borrowers and creditors was also pledged by the leaders in the communiqué. The statement after the meeting also focused on the issue of sustainable infrastructure development which has come to the forefront and under the scanner of global bodies after emergence of concerns surrounding the massive Belt and Road infrastructure project of China that passes through poor nations who are allegedly forced into a debt trap by accepting debts for infrastructure which they cannot repay.

A clause that proposed to “recognize the pressing need to resolve trade tensions” was excluded from the final draft of eh communiqué after being part of an earlier draft on Saturday. According to reports, this deletion was done at the behest of the United States because the Trump administration wants to bypass any impediment in its strategy of increasing tariffs on Chinese products imported into the US. the final statement also did not include any admission that global growth is being impacted negatively by the increasing U.S.-China trade war.

“The first priority should be to resolve the current trade tensions” even as the global bodies and countries attempt to make international trading rules more suitable to changed times, stressed the Director Managing of the International Monetary Fund (IMF) Christine Lagarde.

The current U.S.-China trade war could reduce global growth and total global GDP output by 0.5 per cent in 2020 which would be greater than the economy of G20 member South Africa, the IMF had warned earlier last week even as the global body still expected an improvement in global growth this year and the next.

Its trade war with China would not have any perceivable impact on the US growth, the US Treasury Secretary Steven Mnuchin said on Saturday and added that measures to insulate consumers from higher tariffs would be taken by the US government.

(Adapted from ChannelNewsAsia.com)

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