By David Lawder
MILWAUKEE, Sept 30 (Reuters) - US Trade Representative Jamieson Greer on Wednesday called for G20 major economies to refrain from coercive actions on food trade, tackle industrial overcapacity and re-examine the prevailing post-World War Two tariff system.
In opening remarks to a Group of 20 meeting of trade ministers, Greer laid out the Trump administration's goals to revive American manufacturing through tariffs, trade deals and measures to secure critical supply chains.
The agenda
for the US-led G20 trade meeting follows the Trump administration's pattern of using the forum to focus on China's industrial subsidies, excess capacity and non-market-driven economic policies.
At a G20 finance ministers meeting in Asheville, North Carolina, earlier in September, all G20 member economies except China agreed to take action against "non-market" economic policies and trade distortions that cause over-reliance on exports.
China, a G20 member, has rejected claims that its industrial policies have created excess capacity, and accuses Western countries of using the issue to justify protectionist measures.
"When non-market policies and practices allow production to expand far beyond domestic demand, the consequences spill across borders," Greer said on Wednesday. "Excess production flows into global markets, putting pressure on producers and workers elsewhere."
Greer also took aim at the "Most Favored Nation" tariff system that is the cornerstone of the World Trade Organization, which underpins a global trading system based on equal tariff treatment among members.
The Trump administration over two terms has undermined the MFN principle with tariffs on steel, aluminum and Chinese goods in its first term, and new global and country-specific tariffs in its second term.
"The MFN principle, particularly when applied unconditionally, constrains economies' ability to effectively respond to distortive policies and adapt to changing market conditions," he said in calling for its re-examination.
He said that actions by some countries to withhold food, farm inputs and other agricultural exports pose "serious consequences" for economies across the globe.
Brazil's trade minister Marcio Elias Rosa said after the opening session that there was some agreement among ministers on the idea that trade policies should not distort the distribution of food on humanitarian grounds.
FORCED LABOR ARGUMENTS
Greer also sought to justify US tariffs imposed on 59 countries and the European Union over allegations of lax enforcement around forced labor, saying this provides an artificial price advantage and erodes trust in the global trading system.
Earlier on Wednesday, a group of 28 mostly Western countries agreed on the sidelines of the G20 meeting to work towards erecting more tariffs on steel produced in China and other countries that are major sources of excess production capacity.
The OECD-led Global Forum on Steel Excess Capacity — a group that excludes top producers China and India — also called for countries to refrain from subsidies that sustain existing loss-making steel mills or encourage new ones.
But as Greer seeks consensus around US trade interests, some G20 countries are looking to use the meeting to diversify trade away from their US host.
Canada's trade minister for non-US trade, Maninder Sidhu, is due to meet on Thursday with Indian trade minister Piyush Goyal on the sidelines of the conference as the two countries push for a trade deal by year end.
Canada's US-focused trade minister, Dominic LeBlanc, is not attending the Milwaukee meeting, which comes just as the Trump administration ratcheted up its trade war on Canada on Tuesday, implementing a ban on imports of Canadian alcoholic beverages, motorcycles and dairy products.
Greer told Fox Business Channel that the US was matching Canadian action, but "if the Canadians want a deal, obviously our door is always open."
In a statement ahead of the G20 meeting, Sidhu cited a 17% increase in non-US trade over the past year of $33 billion.
"Every meeting at the G20 is a chance to open more doors for Canadian workers and businesses, and we are moving at speed to seize it," Sidhu said.
(Reporting by David Lawder in Milwaukee, additional reporting by Promit Mukherjee in Ottawa; Editing by Kevin Buckland)
