Global finance officials, jolted by growing anti-trade and economic nationalism movements behind Britain’s vote to leave the EU and Republican US presidential nominee Donald Trump’s campaign, are intensifying pledges for more “inclusive” growth.
However, some G20 officials and analysts said this will be a long-term project.
Certainly, the benefits of these efforts are unlikely to be seen quickly enough to influence US voters in the November presidential election, where both Trump and presumptive Democratic US presidential candidate Hillary Rodham Clinton have declared their opposition to the 12-country Trans-Pacific Partnership (TPP) free-trade deal.
Photo: EPA
After a two-day meeting in Chengdu, China, G20 finance ministers and central bank governors prominently pledged to pursue policies that promote economic “inclusiveness” and preserve an open trading system, significantly strengthening previous statements on the subject.
“The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness,” the G20 officials said in a communique issued on Sunday.
“We underscore the role of open trade policies and a strong and secure global trading system in promoting inclusive global economic growth, and we will make further efforts to revitalize global trade and lift investment,” the communique said.
TPP OPPOSITION
That is in stark contrast to Trump’s acceptance speech at the Republican National Convention last week, where he promised to be a voice for Americans who have been “ignored, neglected and abandoned.”
“The TPP will not only destroy our manufacturing, but it will make America subject to the rulings of foreign governments,” Trump said. “I pledge to never sign any trade agreement that hurts our workers, or that diminishes our freedom and independence. Instead, I will make individual deals with individual countries.”
Clinton’s running mate, Senator Tim Kaine of Virginia, on Saturday declared his opposition to the TPP deal in its current form, just a week after making some positive comments about the deal’s “high standards.”
This puts him in line with Clinton, who has said she wants to renegotiate the TPP and eliminates another potential “yes” vote should Congress attempt to ratify the deal later this year.
US Treasury Secretary Jack Lew told a news conference on Sunday that the “Brexit” vote pushed a lingering problem to the top of the G20 agenda. “In the wake of Brexit, there was a need to focus on inclusive growth. It’s important that that was a subject of discussion here.”
The shift by the G20 is an acknowledgement by global economic stewards that there is a strong and fast-growing movement toward economic nationalism globally that threatens protectionism, said Paul Sracic, political science professor at Youngstown State University in Ohio’s Rust Belt.
“It’s a first step but it’s too little, too late,” Sracic said of the G20 statement in a telephone interview. “The next US administration, no matter which party, is not going to be as friendly to global economic relationships as the Obama administration has been. The politicians are going to follow the voters.”
POPULISM
IMF deputy managing director David Lipton said that while it would take time to turn around a “rising tide of populism,” G20 countries needed to act to ensure globalization remained an engine of future growth.
“Can it be done quickly? Probably not, but on the other hand, if we get a good start, I think it will be more credible in showing that the system is worth maintaining and pursuing,” Lipton said.
He added there were many policies that could promote greater inclusion in G20 economies, such as better retraining programs for workers displaced by trade, progressive income taxes on the wealthy and tax credits for the working poor, along with infrastructure spending on public transportation, which, among other benefits, allows people to affordably travel to jobs.
Lipton also said other countries might not be able to follow China in improving living standards and developing into major growth engines if global interconnectedness were to suffer.
However, former World Bank economist Chad Brown said policies needed to spread the benefits of growth more equitably will vary widely between countries, making it very difficult to achieve.
“G20 efforts to make growth more inclusive are never too late,” he said. “However, pulling it off may be one of its most difficult endeavors.”
Republican US lawmakers on Friday criticized US President Joe Biden’s administration after sanctioned Chinese telecoms equipment giant Huawei unveiled a laptop this week powered by an Intel artificial intelligence (AI) chip. The US placed Huawei on a trade restriction list in 2019 for contravening Iran sanctions, part of a broader effort to hobble Beijing’s technological advances. Placement on the list means the company’s suppliers have to seek a special, difficult-to-obtain license before shipping to it. One such license, issued by then-US president Donald Trump’s administration, has allowed Intel to ship central processors to Huawei for use in laptops since 2020. China hardliners
A top Vietnamese property tycoon was on Thursday sentenced to death in one of the biggest corruption cases in history, with an estimated US$27 billion in damages. A panel of three hand-picked jurors and two judges rejected all defense arguments by Truong My Lan, chair of major developer Van Thinh Phat, who was found guilty of swindling cash from Saigon Commercial Bank (SCB) over a decade. “The defendant’s actions ... eroded people’s trust in the leadership of the [Communist] Party and state,” read the verdict at the trial in Ho Chi Minh City. After the five-week trial, 85 others were also sentenced on
Conjoined twins Lori and George Schappell, who pursued separate careers, interests and relationships during lives that defied medical expectations, died this month in Pennsylvania, funeral home officials said. They were 62. The twins, listed by Guinness World Records as the oldest living conjoined twins, died on April 7 at the Hospital of the University of Pennsylvania, obituaries posted by Leibensperger Funeral Homes of Hamburg said. The cause of death was not detailed. “When we were born, the doctors didn’t think we’d make 30, but we proved them wrong,” Lori said in an interview when they turned 50, the Philadelphia Inquirer reported. The
RAMPAGE: A Palestinian man was left dead after dozens of Israeli settlers searching for a missing 14-year-old boy stormed a village in the Israeli-occupied West Bank US President Joe Biden on Friday said he expected Iran to attack Israel “sooner, rather than later” and warned Tehran not to proceed. Asked by reporters about his message to Iran, Biden simply said: “Don’t,” underscoring Washington’s commitment to defend Israel. “We are devoted to the defense of Israel. We will support Israel. We will help defend Israel and Iran will not succeed,” he said. Biden said he would not divulge secure information, but said his expectation was that an attack could come “sooner, rather than later.” Israel braced on Friday for an attack by Iran or its proxies as warnings grew of