Buenos Aires (dpa) – The threat of trade wars loomed large over a meeting of the G20 group of major economies on Monday in Buenos Aires, with several countries criticizing the rise of protectionism in the United States.
“There is an absolute consensus for free trade” between Germany and Argentina, German Finance Minister Olaf Scholz said after meeting his Argentinian counterpart Nicolas Dujovne on Sunday.
Brazilian Finance Minister Henrique Meirelles on Monday joined the critics, saying that previous experiences had shown protectionist measures not to be “positive.”
The meeting, organized by Argentina, which took over the G20 presidency from Germany in December, brings together 22 finance ministers and 17 central bankers from 19 emerging and industrialized nations and the European Union. Participants also include representatives of 10 multilateral organizations.
G20 countries were discussing the threat of trade wars against the backdrop of US President Donald Trump’s plans to impose tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium.
In Washington, German Economy Minister Peter Altmaier expressed confidence that a solution could be found to the row over the tariffs between the US and the European Union.
“I am today noon a few per cent more optimistic than I was this morning before the talks started,” said Altmaier, who was holding talks with US trade officials.
Ahead of the G20 meeting, International Monetary Fund (IMF) Managing Director Christine Lagarde said the world economy is increasingly recovering from the 2007-2008 global crisis, with growth expected to accelerate from 3.7 per cent last year to 3.9 per cent this year.
The G20 countries were also focusing on challenges arising from the digitalization of economic activity.
The meeting was expected to call for stricter monitoring of cryptocurrencies, the decentralized and anonymous nature of which can turn them into “a potentially major new vehicle for money-laundering and financing of terrorism,” according to the IMF.
Meanwhile, German and French sources said the two countries would seek international action to tighten taxation of large digital companies. The European Commission is planning a 3-per-cent tax on those companies’ revenues, which would raise an estimated 5 billion euros (6 billion dollars) annually.
“There’s work going on on how to tax profit linked to user participation, it’s not a question of taxing data but of taxing profits derived from it,” according to sources at the French Economy Ministry.
However, the debate is still at a preliminary stage, Meirelles cautioned.
About 15 countries attending the meeting meanwhile agreed to propose to the IMF a multilateral fund to help migrants from Venezuela, hundreds of thousands of whose residents have fled a massive economic crisis.
The proposal will be discussed at a spring meeting of the IMF in Washington, according to Meirelles. “We shall try to influence in every possible way a solution, especially to the humanitarian crisis,” the minister said.
A drop in oil prices has contributed to the economic crisis in the oil-producing nation, which is seeing quadruple-digit inflation as well as a widespread lack of food, medicines and other basic goods.
The G20 meeting was scheduled to end with a joint statement on Tuesday.