Former Morgan Stanley Asia Chairman Stephen Roach was deeply dismayed by the recent G-20 financial leaders’ meeting, which he said was “indicative of a U.S. economy that is backing away from multilateralism.”
Financial leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise, Reuters reported.
Breaking a decade-long tradition of endorsing open trade, G20 finance ministers and central bankers made only a token reference to trade in their communique on Saturday, a clear defeat for host nation Germany, which fought the new U.S. government's attempts to water down past commitments.
Roach said G-20 leaders dropping their traditionally strong support of free trade was "disturbing" and reflected rising protectionism in the U.S., CNBC.com explained.
"It's pretty disappointing when you get finance ministers from leading countries in the world who, out of the blue, are unable to validate the commitment to anti-protectionism which is the underpinning globalization," Roach, a senior fellow at Yale University's Jackson Institute of Global Affairs, told CNBC.
"That's an obvious reflection of the shifts in the political winds in the United States and indicative of a U.S. economy that is backing away from multilateralism," Roach said. "It was a disturbing meeting," he said.
Instead of "globalization as a force that is bringing us together, (Trump) feels it is a force that is punishing American middle-class workers," Roach explained.
Roach said to keep an eye on China.
"History tells us that countries that are not attentive to doing reforms, rebalancing and restructuring and boosting productivity at home, if they spread their wings globally, ultimately they're overextended and will get into trouble."
Meanwhile, "the G-20 communiqué explicitly reflected U.S. intentions to establish trade protectionist measures," Ipek Ozkardeskaya, senior market analyst at London Capital Group, told Reuters.
"As the world's number one economy is preparing to set significant barriers against the world, investors are increasingly worried," she said.
(Newsmax wires services contributed to this report).
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