Disputes Within the G20
The office of the U.S. Trade Representative said yesterday that a “small number” of G20 trade ministers rejected U.S. calls to curb industrial overcapacity and policies “not based on market mechanisms,” revealing divisions within the group of the world’s largest economies.
The United States, which holds the rotating presidency of the G20 this year, issued the statement a day after a trade meeting in Milwaukee showed that only two countries, Mexico and Argentina, joined a Washington-led statement calling for greater efforts and cooperation to exclude goods produced with forced labor from supply chains.
The rejection by the overwhelming majority of G20 countries comes after the administration of U.S. President Donald Trump imposed tariffs of 10% or 12.5% on goods from 59 countries and the European Union, alleging that they were not adequately enforcing the ban on forced labor, according to Reuters.
The office’s statement did not name the countries that objected to the statement on overcapacity. However, China had objected to a similar G20 statement condemning forced labor and economic policies not based on market mechanisms that lead to export surpluses, during a finance ministers’ meeting a month ago in North Carolina.
The statement said, “The draft ministerial statement received the support of all members except for a small number, with some of them firmly rejecting the establishment of this track toward cooperative action” on overcapacity, adding that this had caused “great disappointment” for the U.S. G20 presidency.
China’s industrial overcapacity and government support for industry have been among the key issues at this year’s G20 trade ministers’ meetings led by the United States. Beijing rejects accusations that its industrial policies have led to overcapacity, accusing Western countries of using the issue to justify protectionist trade measures.
The United States said that G20 trade ministers reached a consensus on condemning the use of food as a weapon, with members agreeing not to use food trade or agricultural production inputs as a tool for economic or political coercion.
In the joint G20 statement, ministers defined the use of food as a weapon as taking actions aimed at “slowing, stopping, disrupting, or diverting food and agricultural production input flows” for the purpose of exerting coercive pressure to extract geopolitical concessions unrelated to the subject.
Following pressure from Trump, which included the threat of a U.S. ban on diesel exports, G7 countries agreed yesterday to release approximately 100 million barrels of diesel reserves in an attempt to lower prices in the United States, where they had reached record highs. Diesel is widely used in agricultural production.
