Tue, Jul 26, 2016 - Page 7 News List

G20 vows ‘inclusiveness,’ but payoff may take time

POPULIST PRESSURE:The move is a response to the strong and fast-growing shift toward economic nationalism around the world, an analyst said

Reuters, CHENGDU, China

Japanese Deputy Prime Minister Taro Aso speaks during a G20 news conference on Sunday in Chengdu, China.

Photo: EPA

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.

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.

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