Group of 20 (G20) finance ministers and central bank governors meeting in Washington this week called for immediate and co-ordinated efforts to provide more clarity on trade tariffs and curb the heightened uncertainty that has engulfed financial markets and put global financial stability at risk.
“Uncertainty is a tax with no revenue and we cannot let the uncertainty become the new normal,” said Reserve Bank governor Lesetja Kganyago, who co-chaired the G20 finance track meeting with finance minister Enoch Godongwana.
The meetings had been expected to be tense, given the trade war sparked off by the steep across the board tariffs the US imposed earlier this month and the growing trade tensions between the US and China, in particular.
However, US treasury secretary Scott Bessent, who did not attend the G20 finance track meeting in Cape Town in February, did make an appearance at the Washington meeting.
Kganyago said the benefits of globalisation had been discussed and all the G20 members backed an open, rules-based trading system with the World Trade Organisation at its core.
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They agreed, however, that the current trade rules would have be relooked at to ensure fairer trade, and the G20 and IMF members should make co-ordinated efforts to de-escalate and reduce increased trade barriers and trade tensions.
Asked how the G20 sought to de-escalate trade tensions, he said the way to do so was to be engaged in dialogue.
“There was also a very strong view that the global financial system and financial markets have witnessed heightened volatility but remained resilient,” Kganyago said.
This was in large part thanks to the regulatory reform agenda the G20 embarked on in the aftermath of the global financial crisis of 2008/09, which had shielded the system.
The meeting did not issue the traditional communique or a chairman’s statement.
The consensus required to agree on communiqués has become increasingly elusive in recent years amid tensions among G20 members over conflicts in Europe and the Middle East, as well an increasingly bloated agenda.
SA’s presidency had taken a decision not to issue a communiqué after this particular session, but was working towards one at the next meeting in July, Kganyago said.
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