Highlights of the meeting of finance ministers of the G-20 in Fukuoka

The trade war and the slowdown in global growth were the main topics of the G-20 meeting at the weekend in Fukuoka. The meeting was among the group's finance ministers. Now the burden is on central banks to act, though many believe that their arsenal has gone.

At the end of the meeting, ministers have warned that as trade pressure rises, the risks to the global economy will rise. Now the ball is in the field of Trump and Xi, which are expected to meet at the G-20 leaders meeting later this month in Osaka.

It is the rising protectionism that has been put on the agenda. Though ministers recognize that global growth has stabilized, they have warned that risks still remain. Above all, trade and geopolitical tensions have intensified.

Trump's decision to refuse the tariffs to Mexico came during the meeting. Of course, this was welcomed by the other attendees. BoJ chairman Harihuko Kuroda said positively that this is a good development of the situation not only for the US and Mexico, but for the whole world as well.

At the meeting, finance ministers remained unanimous not to devalue national currencies to win a competitive advantage. Mnuchin said that monetary policy can be a good solution to any trade conflict. He also added that any proposal to impose tariffs on a country that deliberately devaluates does not necessarily mean weakening the lucky dollar.

The US will respond with the necessary measures against any country that purposely devaluates its currency to boost its exports.

The rapid penetration of the digital economy, especially in the G-20 countries, has prompted many representatives to think about how tax legislation should be applied as well. According to Bruno Le Maire, France's Finance Minister, an international solution has to be found, including how to precisely measure digital activity and sales, exchange and use of data.

The Japanese Finance Minister, Taro Aso, puts the debt issue to the fore. Issues related to transparency and lending on this subject were its main themes. The French are pushing for a platform to ensure lending in a much more transparent way, thus fighting the fight against corruption and improving financial stability. This will limit market turbulence and improve credit ratings.

Another topic at the G-20 finance ministers' meeting was aging. Unanimously, the participants agreed that there must be urgent reforms - fiscal, monetary, financial and structural. Different ways of measuring productivity and growth and approaches to investing in different skills were also part of the ideas that were being discussed. The ministers also commented on the involvement of more women in the labor force, and this particular theme is heightened over the talks about economic productivity.

The turmoil among global carmakers was also a topic to be discussed. LE Maire said France is ready to drop its stake in Renault to 15% to improve the partnership with Nissan Motor. But he said that would not happen soon.

The comments came after the failure of the negotiations between Fiat and Renault earlier. Fiat withdrew its offer to the French after attempting to politicize the negotiations.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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