Italy's Padoan says G7 did not discuss trade protectionism

Gladys Abbott
May 20, 2017

US Treasury Secretary Steven Mnuchin said the United States reserved the right to be protectionist if it thought trade was not free or fair.

That divergence augurs for potential disagreements when the nations' leaders gather in Sicily later this month - an event which marks Trump's first major worldwide summit as U.S. President. Italian Economy Minister Pier Carlo Padoan, the G7 host, said Trump´s plan to slash taxes on businesses was "ambitious" and he was keen to hear more about it from Mnuchin.

Many G-7 countries had been particularly concerned about the US rolling out a border tax that could choke exports to the country.

Finance Minister Taro Aso and U.S. Treasury Secretary Steven Mnuchin on Friday agreed that the two countries will cooperate in strengthening sanctions on North Korea.

Greece's creditors, including the European Central Bank and the International Monetary Fund, will be in Bari.

The G-7 nations, meeting in Bari, southern Italy, said in a statement that they are "working to strengthen the contribution of trade to our economies" - a repetition of the language used at the Group-of-20 gathering in March that fell short of an explicit promise to avoid protectionism.

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But he said the continued uncertainty about the direction of U.S. policy represented a risk, echoing comments made on Friday by Japanese Finance Minister Taro Aso. Under the administration of Donald Trump, the U.S. are feeling disadvantaged in global trade, not least due to other major currencies being undervalued compared to the dollar and unfavourable trade deals that the United States had signed up to in the past 25 years.

Mnuchin spoke after face-to-face meetings with major trade partners such as Germany, Japan and Canada on the sidelines of the Group of Seven finance ministers' meeting in Bari, Italy.

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The ministers were expected to commit to stepping up worldwide cooperation on the issue after a global onslaught that hit computer systems in in almost 100 countries on Friday.

According to The AP, "one partner openly pushing back was Canadian Finance Minister Bill Morneau, who rejected as "baseless" duties the USA imposed on some Canadian lumber imports".

The G-7 countries have called for taking steps to make the global economy work for everyone.

They also vowed to cooperate more against cyber crime, finance the global anti-terror fight, and promote a fair tax system including digital economy.

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

The G-7 is composed of Britain, Canada, France, Germany, Italy, Japan and the U.S.

In a final statement, the ministers said, "we reiterate our commitment to worldwide economic and financial cooperation and we remain determined to use all policy tools - monetary, fiscal and structural - individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth".

The group's agreements, presented in the form of a final statement, aren't legally binding; instead they represent the leaders' political commitment to follow through.

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