Trade imbalances top agenda with Japan as new G20 chair

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Japan will put issues ranging from global trade imbalances to the impact of aging populations on the agenda when it chairs next year’s meetings of leaders from the Group of 20 major economies, government officials said.

At the end of the G20 summit in Buenos Aires, Japanese Finance Minister Taro Aso unveiled the “priority issues” to be taken up by his counterparts and central bank governors next year when Japan takes over the chairmanship from Argentina.

Japan will host a G20 financial leaders' meeting in Fukuoka in western Japan on June 8-9, followed by a leaders' summit in Osaka on June 28-29, 2019.

Japanese finance minister Taro Aso. /VCG Photo

Tokyo will assert that global current account imbalances should be fixed via multilateral policy coordination rather than bilateral trade deals, the officials said. They declined to be identified because they are not authorized to talk to the media.

Excessive imbalances should be adjusted by improving the ratio of investment and saving through macroeconomic policy and structural reform, they added.

Global imbalances had once been a key topic at G20 meetings with a focus on each country's current account balance, or the overall flow of money including, but not confined to, trade.

The leaders of the world's largest economic powers discuss international trade disputes at the 13th G20 summit. /VCG Photo

This approach runs counter to U.S. President Donald Trump's focus on narrowing the U.S. trade deficit using import tariffs and bilateral deals. His “America First” policies and the U.S.-China trade war have overshadowed debates at recent G20 meetings.

Japan's plans underscore Tokyo's view that instead of focusing too much on bilateral trade imbalances, there should be more emphasis on overall capital flows and structural factors behind the U.S. deficit – such as a lack of domestic savings.

Saddled with its own aging population and the industrial world's heaviest public debt burden, Japan will also highlight the issue of aging and its impact on fiscal and monetary policies at next year's G20 meetings, the officials said.

Also on the agenda under Japan's G20 chair will be the need to ensure debt sustainability, given rising debt in low-income countries, and to promote high-quality infrastructure investment.

Osaka Castle Park is one of the most famous historic attractions in Japan. /VCG Photo

The 2019 G20 summit will be the fourteenth meeting of Group of Twenty, which will also be the first-ever G20 summit to be hosted by Japan.

The city of Osaka will host the summit meeting and is one of Japan's economic powerhouses with a population of 2.72 million and a GDP of 20 trillion yen (187 billion U.S. dollars).

Osaka hosted an APEC summit in 1995.

(With input from agencies)

(Cover Photo: Japan's Prime Minister Shinzo Abe (L) and Argentina's President Mauricio Macri (R) shake hands during a meeting in Buenos Aires at the end of the 13th G20 summit /VCG Photo)