G20 must tackle root causes of trade tensions that threaten growth: EU

File Photo: Containers and trucks are seen at a terminal of the Qingdao port in Shandong province, China – Reuters

BUCHAREST (Reuters): The EU will tell a meeting of finance leaders from the world’s 20 biggest economies next week that they must all tackle the root causes of global trade tensions because they are putting global growth at risk, an EU document showed.

Finance ministers and central bank governors of the Group of 20 (G20) major economies are to meet in Washington on 11-12 April to discuss the main challenges to the world economy.

“Current trade tensions put the ongoing expansion at risk and are therefore a source of concern,” a joint position paper agreed by EU finance ministers on Saturday said.

The US and China are engaged in intense negotiations to end a months-long trade war that has rattled global markets. Hopes of a resolution soared after both sides expressed optimism following talks in Beijing last week.

The International Monetary Fund said in its April World Economic Outlook this week that an escalation of the US-China trade war could reduce US growth by up to 0.6% and China’s by up to 1.5%.

“The international community has to tackle the root causes of the ongoing trade tensions by ensuring a level playing field for open and free trade in goods and services, investment and intellectual property rights,” the joint EU statement said.

The US is also in talks with the EU on a trade deal after imposing tariffs on European steel and aluminium last year and threatening to impose tariffs on European cars.

“We reaffirm our commitment to keep the global economy open as well as rules-based, to support an inclusive multilateral trading system with the World Trade Organization (WTO) at its centre and to keep international economic cooperation on track,” the EU said.

Washington has reservations about the WTO which it believes is unable to tackle modern trade challenges and issues such as intellectual property theft.

The EU believes the WTO is the best way to deal with trade disputes but that it should be reformed to address US and its own concerns.