Group of 20 financial chiefs apparently succumbed to the clout of the new U.S. administration of President Donald Trump and dropped their long-held pledge to resist protectionism in their communique released after their two-day gathering through Saturday.
Sources from the G-20 countries downplayed the significance of the disappearance of the phrase resisting “all forms of protectionism,” but some observers say the relevance of the group designed to promote international economic cooperation will still be tested.
As Japan is scheduled to start a bilateral economic dialogue with the United States in April, the country will likely require a delicate balancing act between pursuing its own interests and taking heed of its long-time ally.
“The omission of the part about protectionism clearly reflected the stance of the United States,” said Yuji Kameoka, chief foreign exchange analyst at Daiwa Securities Co.
Kameoka said the United States is unlikely to walk away from free trade but it is gradually tilting toward protectionism to correct its trade imbalances.
“When it comes to bilateral talks, the focus is on how much Japan can resist external pressure from the United States,” he added.
Trump and Japanese Prime Minister Shinzo Abe agreed to launch the economic dialogue, a framework under which Tokyo and Washington will discuss topics ranging from the economy, trade and energy.