15/05/17

OECD says new deal will help fight tax avoidance

U.S. Treasury Secretary Steven Mnuchin is due to explain Trump's plans to cut business taxes and regulation, and explain Trump's push for what he considers more balanced trading relationships, reports Click Lancashire.

Relations between the new U.S. administration and its main world partners are warming up despite lingering reservations over Donald Trump's "America First" economic agenda, officials said Friday as G7 finance ministers met in Italy.

Some economists, including those from the International Monetary Fund, have expressed concern that Trump's fiscal policies could stoke inflation and bring on faster-than-expected Federal Reserve rate hikes, while new USA trade barriers could also slow global growth. Trade was however expected to feature in bilateral talks, particularly with Japan and Germany, both large net exporters suspected by Trump of benefiting unfairly from their respective dollar exchange rates.

Mnuchin said that after meetings in Bari and a broader finance summit in Baden-Baden, Germany in March, "people feel a level of comfort" in understanding the Trump administration policies.

The China deal came just months after Trump was attacking Beijing in an election campaign in which he promised to restore trade barriers if he felt they were needed to protect USA interests.

Officials from the Group of Seven are also taking the opportunity to hear more about the Trump administration's economic proposals from U.S. Treasury Secretary Steven Mnuchin.

The deal would allow USA companies to ship liquefied natural gas to China and tackles a range of long-standing barriers, ending a ban on imports of US beef and moving a step closer to allowing Chinese poultry on American supermarket shelves.

"There won't be a specific session on issues of trade and protectionism but it could come up in the broader discussion on the state of the world economy", said an Italian official involved in preparing the meeting. A Canadian ministry statement called it a "productive discussion" and that Canada committed to working out a durable solution.

Pier Carlo Padoan, Italy's minister of economy and finance, said he is watching the USA approach "closely" for lessons other countries can use in reforming their tax codes.

The Italian hosts say the meeting themes will include making economic growth benefit more people; coordination among global financial organizations such as the worldwide Monetary Fund and the World Bank; and efforts to stop companies from dodging taxes by moving income across borders.

The China deal, securing better access to the big Chinese market for USA beef, natural gas and some financial services, was welcomed by Mnuchin. "We're going to try to get this done as quickly as we can".

He said the administration was focused on growth, "and growth in the United States is good for the world economy".

Earlier, the finance officials warned that long-term growth could remain subdued and that steps need to be taken to make the global economy work for everyone.

Italian Finance Minister Pier Carlo Padoan said that Saturday's morning session on cybercrime was "unfortunately very timely", an apparent reference to the wave of ransomware attacks reported Friday in dozens of countries in which files were locked and money demanded to unlock them. The G7 countries are Canada, France, Germany, Japan, Italy, the United States, and the United Kingdom; the European Union also attends the informal forum.

The group's agreements aren't legally binding; instead, they represent the leaders' political commitment to follow through.