Business News

CCTV Script 20/03/17


This is the script of CNBC's news report for China's CCTV on March 20, Monday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Financial leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise.

Breaking a decade-long tradition of endorsing open trade, G-20 finance ministers and central bankers made only a token reference to trade in their communique on Saturday, a clear defeat for host nation Germany, which fought the new U.S. government's attempts to water down past commitments.

In a meeting that some said was at times 19 against one, the U.S. did not yield on key issues, essentially torpedoing earlier agreements as the G-20 requires a consensus. Still, the dialogue was friendly and non-confrontational, leaving the door open to a future deal, officials who attended the meeting said.

Seeking to put "America First," Trump has already pulled out of a key trade agreement and proposed a new tax on imports, arguing that certain trade relationships need to be reworked to make them fairer for U.S. workers.

While some expressed frustration, like French Finance Minister Michel Sapin, others played down the dispute.

"It is not that we were not united," German finance minister Wolfgang Schaeuble said. "It was totally undisputed that we are against protectionism. But it is not very clear what (protectionism) means to each (minister)."

He added that some ministers did not have a full mandate to negotiate since they were not fully in charge of trade issues.

The changes in the tone of G20's statement has stirred concerns among people who watched the meeting closely, including former US Tresasury Sec Larry Summers.

[Larry Summers, former U.S. Treasury Secretary] "I certainly wasn't encouraged and it certainly wasn't a favorable development."

"If there is a acceptance of protectionism is something that's acceptable globally on a large scale, I think that could be really quite damaging. On the other hand if this is rhetoric and there are frictions in particular sectors but no movement towards the overall tariffs then I don't think this will be hugely consequential."

International trade makes up almost half of global economic output and officials said the issue could be revisited at a meeting of G-20 leaders in July.

Others suggested that the G-20 leaders' meeting in Hamburg this July could be the real opportunity to bring the U.S. on board.

However, if we continue to see protectionism rising, we might face a more hawkish Fed this year.

[ADRIAN MOWAT, J.P. Morgan Managing Director, Chief Asian and Emerging Market Equity Strategist] "If you overlay that with some form of protectionism, which pushes up cost of living in the US, then the FED may be forced to increase the phase of normalizing its rates on the current dots vs 3 moves this year, proved to be inadequate. So thats definately a risk worth looking out for."

Another disagreement now is on fighting the climate change.

In the new U.S. administration's biggest clash yet with the international community, G-20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after U.S. President Donald Trump called global warming a "hoax."

The communique also dropped a reference, used by the G-20 last year, on the readiness to finance measures against climate change as agreed in Paris in 2015, because of opposition from the United States and Saudi Arabia.

Trump's administration on Thursday proposed a 31 percent cut to the Environmental Protection Agency's budget as the White House seeks to eliminate climate change programs and trim initiatives to protect air and water quality.

CNBC's Qian Chen, reporting from Singapore.