Japan: G20 summit to debate trade including WTO reform

The Group of 20 summit next week in Osaka will not take any steps that go against World Trade Organization rules, a senior Japanese finance ministry official said. (AFP)
Updated 19 June 2019

Japan: G20 summit to debate trade including WTO reform

  • Japan, which chairs this year’s G20 gatherings, will take a neutral stance in the US-China trade row
  • More ‘concrete’ discussions on trade policy will take place at the G20 Osaka summit

TOKYO: Substantial discussions on trade, including reform of the World Trade Organization, will likely take place at a summit of Group of 20 major economies next week in Osaka, a senior Japanese finance ministry official said on Wednesday.
Japan, which chairs this year’s G20 gatherings, will take a neutral stance in the US-China trade row and urge countries to resolve tensions with a multilateral framework, said Masatsugu Asakawa, vice finance minister for international affairs.
“With regard to differences (on trade) between the United States and China, Japan of course won’t take sides. We will also not take any steps that go against WTO rules,” said Asakawa, who oversaw the G20 finance leaders’ gathering earlier this month.
“Japan will continue to take a multilateral approach in promoting free trade,” he told a news conference.
China and the United States, the world’s two largest economies, are in the middle of a costly trade dispute that has pressured financial markets and damaged the world economy.
Markets are focused on whether US President Donald Trump and his Chinese counterpart Xi Jinping can narrow their differences when they sit down at the G20 summit.
The bitter trade war has forced the International Monetary Fund to cut its global growth forecast and overshadowed the G20 meetings that conclude with the Osaka summit on June 28-29.
At the finance leaders’ gathering, the G20 issued a communique warning that trade and geopolitical tensions have “intensified” and that policymakers stood ready to take further action against such risks.
“The macro-economic impact (of the trade tensions) is an issue of concern,” Asakawa said, conceding it took considerable time for G20 finance ministers and central bank heads to agree on their communique’s language on trade.
More “concrete” discussions on trade policy will take place at the G20 Osaka summit, he added.
The row over trade appeared to spread to currency policy when Trump criticized European Central Bank President Mario Draghi’s dovish comments as aimed at weakening the euro to give the region’s exports an unfair trade advantage.
Asakawa rebuffed the view the Bank of Japan’s massive stimulus program could also provoke the ire of Trump.
He also said the G20 shared an understanding that members would accept any exchange-rate moves driven by ultra-easy monetary policies as long as the measures are not directly aimed at manipulating currencies.
“The BOJ’s ultra-easy policy is aimed at beating deflation, not at manipulating exchange rates. That’s understood widely among the G20 economies,” he said.
Fears of the widening fallout from the trade war have heightened market expectations the US Federal Reserve will start cutting interest rates this year. Draghi said on Tuesday the ECB will ease again if inflation fails to accelerate.
The dovish tone of other central banks has piled pressure on the BOJ, though many analysts expect it to keep policy steady at least at this week’s rate review.


Holiday Inn-owner IHG hit by weak China, Hong Kong bookings

Updated 16 min 7 sec ago

Holiday Inn-owner IHG hit by weak China, Hong Kong bookings

  • IHG’s revenue fall comes amid a general slowdown in the global hotel industry
  • Company opened 13,000 rooms in Q3

Holiday Inn-owner InterContinental Hotels Group blamed lower business bookings in China and Hong Kong protests for a 0.8% fall in third-quarter revenue per room on Friday, the latest company to be pinched by weaker global travel.
The hotel industry in general is feeling the impact of slowing global growth, which is denting business travel. Rival Hilton Worldwide Holdings Inc. warned that lagging growth in China and the China-US trade war would hurt revenue. Raffles owner AccorHotels narrowed its full-year profit guidance, citing uncertainty on China-related issues.
Four months of protests in Hong Kong have taken a toll on tourism, while weak economic data from China has been discouraging.
IHG reported a 6.1% fall in revenue per available room (RevPAR) in Greater China during the quarter, with a 36% drop in Hong Kong. (https://reut.rs/35Lf0Jl)
“While we are certainly not at the stage where business travel has been scaled back on a large scale, the cracks are certainly showing,” AJ Bell’s Investment Director Russ Mould said.
Shares in IHG, which has nearly 5,800 hotels including the Crowne Plaza and Regent Hotels & Resorts brands, fell nearly 2% in early trade on Friday.
The company has been putting more money into China, its fastest-growing market, using new loyalty programs, digital payment options and revamping rooms at Holiday Inn to woo local business travelers. Of the 13,000 rooms IHG opened across its brands in the quarter, 4,100 were in China.
But Chief Financial Officer Paul Edgecliffe-Johnson said the company was seeing more leisure than business travelers, who tend to spend less money on bookings.
Edgecliffe-Johnson said the company had also seen some pressure in the United States as US manufacturing businesses cut spending on conference halls bookings during the third quarter.