Lots of common ground

Baden-Baden (dpa) – German Finance Wolfgang Schaeuble acknowledged on Friday that the world's leading finance ministers were struggling to agree to a statement reaffirming their commitment to free trade and rejection of protectionism in the face US economic nationalism.  

"There is some discussion on whether we take the wording from previous meetings or whether we change them," Schaeuble told public broadcaster SWR amid reports Washington is objecting to references to support of free trade in the conference's final communique.

He was speaking as Group of 20 finance ministers and their central bankers gathered in the German resort town of Baden-Baden for a two-day meeting that is likely to be dominated by the global uncertainty unleashed by President Donald Trump's "America First" agenda.

But Schaeuble, who is to host the meeting, expressed confidence that Germany and the US can forge a common ground on trade at the meeting of the finance ministers and their central bankers.

"I believe we will come to an agreement," Schaeuble told broadcaster SWR as the meeting got under way.

"They are of course for free trade, and I think we can find a joint position in Baden-Baden," he said.

European financial markets, however, drifted lower as the meeting in Baden-Baden got under way.

While the eurozone's bluechip EuroStoxx 50 edged down 0.3 per cent to 3431 points in early trading, the US dollar was treading water at 1.067 dollars against the euro as investors waited for results from the G20 meeting.

The Trump White House's commitment to a strong greenback is one of the themes at the talks of the world's leading industrial powers and emerging economies with the US Treasury Secretary Steven Mnuchin likely to press G20 nations to allow their currencies to rise.

This comes after the Trump White House lashed out at nations such as Japan, Germany and China for manipulating their currencies so as to guide them lower and to boost exports, consequently hitting US competitiveness.

Currency manipulation and protectionism form part a series of interrelated - and contentious - policy issues that have emerged as Trump attempts to reshape the global economic order so as to promote US economic issues.

Crucial to this will be whether the G20 ministers agree to renew their long-standing commitment to free trade and a rejection of protectionism in their final statement released on Saturday.

The question of the G20 stance on protectionism and the Western community's drive in recent decades for multinational trade deals and the role of global trade organizations is expected to be one of the first issues discussed by ministers in Baden-Baden.

The G20 ministers will also be keeping an eye on Washington, where Trump and German Chancellor Angela Merkel are due to hold their first face-to-face talks later Friday.

In a bid to increase manufacturing jobs, Trump has also threatened to slap an import tax or border tax on companies.

The administration has also gone after Germany's large trade surplus with the US, accusing Berlin of undervaluing the euro in order to have an advantage over its trade partners.

"It is not our desire to get into trade wars," US Treasury Secretary Steven Mnuchin said following a meeting in Berlin on Thursday with Schaeuble ahead of the Baden-Baden conference.

Mnuchin said Trump supported free trade but that "it had to be fair," stressing that countries should not manipulate their currencies because it would jeopardize economic growth.