European Union flags fly outside a newly constructed part of the Europa building on March 10, 2017 in Brussels, Belgium. (Carl Court/Getty Images)
European Union finance ministers will tell a G20 meeting this week that they will resist protectionism and that financial rules introduced after the 2008 crisis must be kept in place.
A document prepared by the EU ministers, which appears aimed at the United States, sets out the position of all European delegations for the G20 gathering of ministers and central bankers in Baden Baden in Germany on March 17-18.
“We reaffirm our commitment to keep the global economy open, resist protectionism and keep global economic cooperation on track,” says the paper, seen by Reuters.
An early draft communique for the G20 meeting suggested on March 7 that the world’s financial leaders might no longer explicitly reject protectionism, breaking with a decade-old tradition.
Instead, following the change of administration in Washington, they might promise only to keep an “open and fair international trading system,” wording which some officials see as a way to accommodate the protectionist views of President Donald Trump.
The draft communique, however, could change substantially, following discussions on March 17-18, G20 officials said.
The European Union ministers’ document also appears to argue against Trump’s plans to roll back U.S. legislation, called the Dodd-Frank Act, introduced to prevent another financial sector crisis like that one in 2008.
“Avoiding a rollback in the financial regulation agenda is necessary,” the document says.
The document also appears to address remarks by Patrick McHenry, the Vice-Chair of the House of Representatives’ Financial Services Committee, in letter to Fed Chairman Janet Yellen about the international role of the Fed.
McHenry wrote that the U.S. central bank should stop “negotiating international regulatory standards among global bureaucrats in foreign lands without transparency, accountability, or the authority to do so.”
The European document says: “International coordination and continued participation of all G20 members in international fora on financial regulation is of fundamental importance.”
European Commission Vice President Valdis Dombrovskis said in February that while the United States had every right to redefine its national interest, Europe was entitled to say that international cooperation on financial governance was in everyone’s interest.
“We are sensitive to talk of unpicking financial legislation which applies carefully negotiated international standards and rules,” Dombrovskis said.
“It is difficult not to notice when the Chair of the Federal Reserve is criticized for her approach to negotiating international rules and standards, or when an American President talks about ‘doing a big number’ on Dodd-Frank.”