April 2, 2019 / 2:19 PM / 16 days ago

Trade tensions put global growth at risk, EU to tell G20

BRUSSELS (Reuters) - The European Union will warn G20 nations that trade tensions are putting global growth at risk and need to be addressed with a speedy reform of the World Trade Organisation, a EU draft document says.

FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, March 6, 2019. REUTERS/Yves Herman/File Photo

The paper, seen by Reuters, sets the EU priorities on trade, global tax reforms and financial rules before a meeting of finance ministers and central bank governors from the Group of 20 nations in Washington on April 11-12.

“Current trade tensions put the ongoing expansion at risk,” the document says, warning that global growth is slowing and might grind to a halt.

EU finance ministers will formally approve the document at a meeting on Saturday in Bucharest.

The EU’s 28 countries will reiterate their calls on the United States and China to put aside their trade friction and engage in the reform of the WTO, which should remain at the center of an open and rules-based global economy, the document says.

To counter risks of a downturn, the EU invites G20 nations to back public and private investment and urges states with high public debt to rebuild fiscal buffers and carry out structural reforms.

The EU also renews its calls for a global deal on the reform of digital taxation in 2020, after its 28 states failed to agree an EU-wide transitional levy on large internet firms.

G20 nations are invited to consider global mandatory disclosure rules for banks, lawyers and other tax intermediaries, the EU document says.

It urged the world’s standard-setter on tax transparency, the Organisation for Economic Co-operation and Development, to update its list of tax havens, which currently includes only the small Caribbean island of Trinidad and Tobago. The EU’s own list has been recently expanded to comprise 15 jurisdictions, including the United Arab Emirates.

EU states will also push their G20 partners to apply common financial rules to avoid market fragmentation and financial instability. They will call on G20 nations to fully apply the Basel III banking reform.

The G20 should monitor and address, if necessary, emerging financial vulnerabilities springing mostly from “non-bank financial intermediation”, such as investment funds, the EU document says.

The EU also commits to step up efforts to counter cyber attacks and to regulate crypto-assets against money-laundering risks.

Reporting by Francesco Guarascio, editing by Larry King

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