Mon, May 15, 2017 - Page 14 News List

Finance chiefs warming to Mnuchin

CHARM OFFENSIVE:The US Secretary of the Treasury is fronting up an agenda that baffles some of his G7 colleagues, but seems to be making progress on a personal level

Bloomberg

Finance ministers signaled a truce in their trade quarrel with US President Donald Trump’s administration as US Secretary of the Treasury Steven Mnuchin said the G7 is starting to understand where he is coming from.

Mnuchin’s third encounter with the international community, at a meeting of finance chiefs in Italy, deepened ties even as his government’s “America First” policy continues to challenge the global economic consensus. A statement following the G7 summit in Bari, Italy, mirrored watered-down trade language from the G20 two months ago, but ministers afterward suggested an increasingly pragmatic tone to the talks after a stilted start.

“Of course we recognize that there are different starting points, different views in different countries,” the chair of the talks, Italian Minister of Finance Pier Carlo Padoan, told Bloomberg TV, adding that “this is not an obstacle to reaching a common perspective.”

Earlier, he told reporters that “the relationship with Mnuchin improves every time we see each other.”

As with his previous outings in Germany and Washington, Mnuchin is fronting up an economic agenda that leaves some in the international community baffled and frustrated. At both those G20 gatherings, he refused to sign up to a longstanding explicit shunning of protectionism.

While holding firm on that despite attempts to persuade him to give ground, Mnuchin said his colleagues were gaining a better understanding of what Trump’s policies mean for the US and the rest of the world.

“People are much more comfortable today now that they’ve had the opportunity to spend time with me and listen to the president and listen to the economic message on what the economic agenda is, and that’s about creating growth in the United States,” he told reporters after the meeting. “We don’t want to be protectionist but we reserve our right to be protectionist to the extent that we believe trade is not free and fair.”

The final statement from the Bari meeting included a reference to “working to strengthen the contribution of trade to our economies,” a word-for-word reproduction of March’s G20 statement in Baden-Baden, Germany.

Mnuchin’s brand of diplomacy had already showed signs of evolution between that meeting and one in Washington one month later, with his position that trade be “fair” rather than “free” crystallizing into a call for “reciprocal free trade.”

“When he came to Baden-Baden, his comments were tentative — probably because it was his first international meeting and it was soon after he started,” Japanese Minister of Finance Taro Aso told reporters. “This time, his comments were very timely and he explained his points well. Compared with a month or two months ago, the stiffness is gone.”

Even with the apparent thaw in relations, the US still stands apart from the rest of G7 on trade, climate change and other issues. That divergence augurs for potential disagreements when the nations’ leaders gather in Sicily later this month — an event that marks Trump’s first major international summit as US president.

“On some very important points, we see there is a desire for continuity, a desire to work with the G7 and G20 partners,” French Minister of Finance Michel Sapin said in a Bloomberg TV interview. “There are, however, some points on which the American administration doesn’t, at this point in time, feel comfortable expressing a sufficiently well thought-out opinion. These are points on which they continue to reflect.”

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