Finance Minister Jim FlahertyGraham Hughes
The G20 will not shy away from discussing the growing concern over China's currency, says Finance Minister Jim Flaherty.
There are signs that some members of the G20 would prefer to sideline the currency debate in light of the war of words playing out between the organization's two main members, China and the United States.
Some U.S. congressmen are urging the Obama administration to declare China a currency manipulator and impose duties on Chinese imports, and several countries have pressed Beijing to allow the yuan to appreciate. The fact that China has not allowed its currency to fluctuate throughout the global recession has led to criticism that China is giving itself an unfair trade advantage.
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China is pushing back hard, dismissing American criticism and insisting the main threat to economic recovery is protectionism.
Speaking with reporters in Ottawa, Mr. Flaherty said Tuesday the key to broaching the subject next month in Washington and throughout a subsequent series of G7 and G20 meetings this year is to discuss currency issues as well as protectionism.
"The discussions I've had of late ... have included discussions of currency issues. We have some significant global imbalances. There's no point in sweeping important issues under the rug. We haven't at previous meetings and we've been doing this for more than four years. So I expect that it will be a topic of discussion," said Mr. Flaherty.
Canada is hosting the G8 leaders summit and the G20 in late June. Prior to that, there will be back-to-back meetings of the G7, G20, International Monetary Fund and the World Bank in Washington next month. The G20 is also meeting in Korea in early June.
When asked about the potential risk to the G20 in tackling such a thorny issue, Mr. Flaherty said China's concerns must also be addressed.
"I think there's a give and take that has to happen here," he said. "There has to be a continued, persistent fight against protectionism, for example, among those countries who are inclined to take protectionist acts. That's always a concern to a major exporter like China. So when we talk about currency, we also have to talk about protectionist issues, that we don't retreat into a protectionist shell. Certainly Canada is not going there. We're in favour of free trade. We're getting rid of tariffs."