WASHINGTON: US President Barack Obama will urge leaders of the world’s major economies to use fiscal policy and other tools to boost growth while paying more attention to angry citizens who feel left behind, Treasury Secretary Jack Lew said on Wednesday.
The United States will also call for the Group of 20 leading economies to keep their steel industries from getting so big that factories are underused, Lew said in a preview of the US message to the Sept. 4-5 G20 summit in Hangzhou, China.
Lew’s comments suggest Washington could press Beijing at the summit on excess capacity in China’s giant state-backed steel industry. The remarks also point to the rising awareness among leaders of advanced economies that support for global trade and financial integration cannot be taken as a given.
“There are very real concerns about globalisation and technology, but the answer cannot be to close ourselves off,” Lew said in prepared remarks at the Brookings Institution.
In the campaign ahead of the US presidential election in November, both major candidates have expressed scepticism over free trade pacts both new and old. Britain voted in June to leave the European Union, another sign of discontent with globalisation. Two landmark international free tree agreements with Asia and Europe — the Transpacific Partnership and the Transatlantic Trade and Investment Partnership — remain in limbo. Both presidential nominees, Democrat Hillary Clinton and Republican Donald Trump, have said they oppose the agreements and Congress appears unlikely to ratify the completed TPP agreement, imperilling a long Obama effort at freer trade with 11 other Pacific Rim countries.
The G20 needs to find ways to boost the living standards of poor and middle-class families, Lew said, saying Obama will press G20 leaders to make banking services universally available.
America has been pressing other G20 governments to spend more when possible to boost the global economy, which has cooled as weaker growth in China reduced demand for commodities like copper and iron. Europe and Japan have also been growing at lacklustre rates.
Obama will also urge more countries to launch reviews of fuel subsidy programs, part of a commitment at the G20 to phase out inefficient programs supporting fuel purchases, Lew said.
Analysts say the G20 summit, on September 4-5, is unlikely to produce breakthroughs, with officials not facing the pressure to act that a crisis can create.
