Published: Sat, March 18, 2017
Business | By Sandy Mccarthy

German Finance Minister Schaeuble backs London as strong financial centre

German Finance Minister Schaeuble backs London as strong financial centre

The meeting of the G20 finance chiefs represented the White House's first chance to spell out to the global financial leaders details of its fiscal and trade plans, with new Treasury secretary Steven Mnuchin making his debut at a major world economic forum.

Attention at the two-day meeting in the German spa town of Baden-Baden has centered on a joint statement that is being prepared for Saturday. This time, early drafts of the ministers' statement have omitted such unequivocal language, which in the final version could be softened to refer to trade that is "open" and "fair", without the absolute opposition to import restrictions to benefit domestic workers.

Gurria told The Associated Press it was "important to create a comfort zone" where leaders could have their first discussions with the new administration, "to make them feel that this is a place where we can talk, we can ventilate the areas where we have common ground and the areas where we may have differences". Europe was keen on adding trade should be "rules-based", meaning subject to rules of the World Trade Organization (WTO).

Another top priority for Mnuchin at the summit will be addressing currency valuations among the world's 20 top economies. But, the Trump administration is taking a protectionist stance saying it is part of an effort to save USA jobs.

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As the gap widens between the rich and the poor, nationalism, populism and protectionism will find fertile ground and pose a risk to prosperity, Schaeuble told a conference, responding in part to an increasingly protectionist stance from the new US administration. That could be just wording - or it could be the signal of a new era in the global economy in response to Trump's focus on bilateral trade deals and the America First stance. "It is not our desire to get into trade wars, it is our desire to deal with where there is imbalance in certain trade relations".

Mnuchin is scheduled to meet one-to-one with China's Finance Minister Xiao Jie and central bank governor Zhou Xiaochuan.

But the Treasury chief set the stage for the Baden-Baden meeting by repeating Mr Trump's demand that trade had to be fair and warning that currency manipulation by nations to try to guide their exchange rates lower would jeopardise economic growth. That could include job training and education, since the International Monetary Fund says trade and globalization have benefited higher-skilled workers.

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