The U.S. Trade Representative’s (USTR) office announced on Friday, Oct. 2, that a U.S. proposal to address excess industrial capacity failed to gain full support from Group of 20 (G20) trade ministers. The announcement followed a ministerial meeting held on Thursday, Oct. 1, in Milwaukee, where the U.S., serving as the G20 chair, sought a joint commitment against what it defines as non-market economic policies.
In a statement, the USTR said a draft ministerial text on the issue “was supported by all but a handful of members, a few of whom firmly rejected creating this pathway toward cooperative action.” The USTR office, which did not name the dissenting countries, added that the outcome “severely disappointed” the U.S. G20 presidency.
The topics of industrial subsidies and excess capacity have been a primary focus during the U.S. tenure as G20 chair this year. While the countries that objected to the statement were not identified, China has previously voiced opposition to similar language at other international forums. At a G20 finance leaders’ meeting a month earlier, Chinese officials objected to a statement concerning non-market economic policies. The Chinese government has previously stated that claims its industrial policies create excess capacity are used to justify protectionist measures by other nations.
Separately at the Milwaukee meeting, a U.S.-led statement calling for cooperation to eliminate goods produced with forced labor from global supply chains was signed by two G20 members, Mexico and Argentina. The initiative was presented after the U.S. government imposed tariffs on goods from 59 countries and the European Union, citing its assessment of their enforcement of forced labor bans. The USTR is also conducting a “Section 301” investigation into the trade practices of 16 partners related to industrial capacity.
Despite the disagreement on industrial policy, the G20 trade ministers reached a consensus on other matters. They released a joint statement denouncing the use of food trade as a tool for political or economic coercion. The ministers’ statement defined the “weaponization of food” as measures intended to “slow, stop, block or direct the flow of food and agricultural inputs” to exert coercive pressure.
“We condemn food weaponization, as it poses a significant humanitarian and economic threat,” the joint G20 statement read.
U.S. Trade Representative Jamieson Greer also confirmed on Thursday that he did not seek a joint statement on another discussion topic: reforming the “most favored nation” (MFN) tariff system, a foundational principle of the World Trade Organization. The USTR statement noted that some G20 members had expressed a willingness to consider changes to the MFN principle.
