A "handful" of G20 trade ministers rejected a U.S.-led push to curb excess industrial capacity and non-market policies, the Office of the U.S. Trade Representative said Friday. Only Mexico and Argentina signed the related statement on forced labor in supply chains, while the group did reach consensus on condemning the weaponization of food trade.
Only two countries back US statement
The U.S. Trade Representative's office said Friday that a "handful" of Group of 20 trade ministers rejected Washington's call to curb excess industrial capacity and non-market policies, exposing divisions within the group. The statement followed a trade meeting in Milwaukee that showed only Mexico and Argentina signing on to a U.S.-led statement calling for cooperation to eliminate goods made with forced labor from supply chains.
The pushback follows the Trump administration's imposition of tariffs of 10% or 12.5% on goods from 59 countries and the European Union over claims those countries fail to adequately enforce bans on forced labor. The USTR is also conducting a second Section 301 tariff investigation into 16 trading partners that show signs of excess industrial capacity, a probe widely expected to lead to new duties in coming months.
The USTR did not name the objecting countries. However, China had objected to a similar G20 statement on forced labor and non-market policies at a finance leaders' meeting a month earlier in North Carolina. The USTR statement said the draft was supported by all but a handful of members, some of whom rejected the cooperative pathway on excess capacity, adding that this severely disappointed the U.S. G20 presidency.
Beijing rejects excess-capacity claims
China's industrial subsidies and excess capacity have been a recurring theme of this year's U.S.-led G20 ministerial meetings. Beijing has rejected claims that its industrial policies have created excess capacity, accusing Western countries of using the issue to justify protectionist measures.
Despite the split on industrial capacity, the ministers did reach consensus elsewhere. The G20 trade ministers agreed to denounce the weaponization of food trade, with members agreeing that trade in food or agricultural inputs should not be used to exert coercive pressure for unrelated geopolitical concessions. According to CNBC: "We condemn food weaponization, as it poses a significant humanitarian and economic threat", the ministers said in the joint statement.
No joint statement sought on MFN reform
U.S. Trade Representative Jamieson Greer said Thursday that he did not seek a joint statement on reforming the "most favored nation" system of published, unconditional tariff rates that underpins the World Trade Organization, a principle that has defined global trade since the end of World War Two. Greer has argued the MFN principle has been abused by non-market-oriented economies such as China that subsidize industries without facing different treatment under the rule.
Source: CNBC
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