(Repeats to add PIX to story slug)
By Jan Strupczewski and Gernot Heller
BADEN BADEN, Germany, March 17 The world's
financial leaders will renounce competitive devaluations and
warn against exchange rate volatility, but they have not yet
found a common stance on trade and protectionism, a draft
statement of their meeting in Germany showed on Friday.
The finance ministers and central bank governors of the
world's 20 largest economies may struggle to present a united
front on protectionism after the new administration of U.S.
President Donald Trump began considering imposing a border tax
that would make imports more expensive.
A G20 draft communique, which may still change and is to be
published only on Saturday, also said that monetary policy will
keep supporting growth and price stability but cannot alone lead
to balanced economic growth.
"We reiterate that excess volatility and disorderly
movements in exchange rates can have adverse implications for
economic and financial stability," the draft communique, seen by
"We will consult closely on exchange markets. We reaffirm
our previous exchange rate commitments including that we will
refrain from competitive devaluations and we will not target
exchange rates for competitive purposes," it said.
These sentences were missing from the earliest draft
communique, but have been re-inserted on the insistence of
several G20 governments and institutions so as not to alarm
markets that a policy change was under way.
"Monetary policy will continue to support economic activity
and ensure price stability, consistent with central banks'
mandate, but monetary policy alone cannot lead to balanced
growth," it said, also repeating the G20 stance from last year.
But the draft, for now, makes no reference to trade and
protectionism issues, breaking with a decade-old tradition of
G20 communiques which have, over the years, used various
formulations to endorse free trade and reject protectionism.
U.S. Treasury Secretary Steven Mnuchin said on Thursday in
Berlin that the Trump administration has no desire to get into
trade wars, but certain trade relationships need to be
re-examined to make them fairer for U.S. workers.
German Finance Minister Wolfgang Schaeuble, whose country
holds the rotating presidency of the G20 this year, told Reuters
the protectionist U.S. stance could force the G20 to leave out
trade from the statement altogether.
"There are differing views on this subject," Schaeuble said,
pointing to "America First" comments by U.S. President Donald
Trump and other senior U.S. government officials.
"It's possible that we explicitly exclude the topic of trade
in Baden-Baden and say that can only be resolved at the summit
of the state and government leaders," he said.
(Additional reporting by Michael Nienaber, Joseph Nasr and
David Lawder; Editing by Balazs Koranyi and Hugh Lawson)