The world’s financial leaders may no longer explicitly reject protectionism or competitive devaluations of currencies, a draft communique of their meeting next week showed, promising only to keep an open and fair international trading system. Finance ministers and central bank governors from the world’s 20 largest developed and developing economies will meet on March 17-18 in the German town of Baden Baden to discuss the world economy.
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It will be the first meeting of G20 finance ministers attended by the new US administration of President Donald Trump, who has more protectionist policy views on trade. The changes to the draft communique, which will still be worked on before publication on March 18, seem to accommodate the new US position. The draft drops the phrase adopted by G20 finance ministers last year to “resist all forms of protectionism”. It also no longer contains the sentence, used in previous G20 statements to “refrain from competitive devaluations” and to “target our exchange rates for competitive purposes.”
Instead, it says: “We will maintain an open and fair international trading system” and “We reaffirm our previous exchange rate commitments.” For years, previous G20 communiques included a phrase that “excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will consult closely on exchange markets.” This sentence is now also missing.