Resolving global trade tensions must be a top priority to preserve an expected modest rebound in global growth, European Union finance ministers will tell G20 counterparts this week amid an escalating US-Chinese trade conflict.
Finance ministers from the world’s 20 biggest economies, the G20, are meeting this weekend in the Japanese city of Fukuoka to discuss the global economy.
China warned its companies operating in the United States on Tuesday (4 June) they could face harassment from US law enforcement agencies, and Beijing also rebuffed US criticism of a Chinese trade white paper as “singing the same old tune”.
Relations between the world’s two largest economies have nosedived in recent months due to a tariffs battle, US sanctions against Chinese telecoms giant Huawei Technologies Co Ltd and US support for Chinese-claimed Taiwan.
“Global growth is bottoming out, with the global economy set to rebound modestly going forward. There are a number of interconnected downside risks to the outlook. Resolving trade tensions deserves the highest order of priority,” a terms-of-reference document prepared for the ministers said.
“A further slowdown would call for timely, differentiated and well-calibrated policy responses,” said the document seen by Reuters. It did not elaborate as to what concerted action the world’s biggest economies could or should take.
European ministers from France, Germany, Britain and Italy will carry the common message from the EU’s 28 member countries to their counterparts from the other major global economies when they meet on 8-9 June.
With the world’s biggest companies deriving their strength from the Internet and the rich EU single market of some 500 million people, the EU ministers will push for tech giants like Google, Amazon, Facebook or Apple (GAFA) to be better taxed than now.
“We need to give the highest priority to finding global solutions to the taxation of the digital economy,” the document said, reflecting euro zone governments’ search for new sources of funding, especially with the prospect of a new, special budget for the euro zone, funded from taxes, from 2021.
The EU ministers also want to regulate globally the so-called crypto assets like bitcoin, to make sure they cannot be used to finance terrorism or launder money.
“We will continue the global regulatory work on crypto-assets, which has already started in relation to anti-money laundering and countering the financing of terrorism,” the document said.