G20 trade meet exposes fault lines over global rules

Milwaukee: A meeting of G20 trade ministers in Milwaukee has opened a wider debate over the future rules of global commerce, with the United States pressing major economies to reconsider long-established trade principles while seeking coordinated action against industrial overcapacity, forced labour and vulnerabilities in global supply chains.

Commerce and Industry Minister Piyush Goyal is representing India at the two-day meeting hosted by United States Trade Representative Jamieson Greer, where differences over the World Trade Organization’s Most-Favoured-Nation principle, tariffs, Chinese industrial capacity and government intervention in trade have emerged as key issues.

The gathering is taking place at a time when the global trading system is increasingly divided between governments seeking to preserve WTO-centred multilateral rules and the Trump administration’s emphasis on reciprocity, domestic manufacturing and the use of tariffs to address what Washington regards as unfair trading practices.

The United States has placed four broad questions before ministers: eliminating forced labour from global supply chains, updating the Most-Favoured-Nation principle, opposing the weaponisation of food trade and confronting structural excess production capacity.

Of these, the debate over Most-Favoured-Nation treatment could have the most far-reaching consequences.

MFN is a central principle of the WTO system under which a trade advantage granted by one member to another generally has to be extended to other members. Washington argues that the existing system has failed to ensure reciprocity when countries maintain widely differing tariff structures and economic practices.

India, however, arrived in Milwaukee emphasising its support for the multilateral trading system.

The Commerce Ministry said India would work toward “a rules-based, open, inclusive, transparent, equitable and non-discriminatory multilateral trading system, with the World Trade Organization at its core, while ensuring adequate policy space for developing countries.”

The difference illustrates one of the fundamental questions confronting ministers in Milwaukee: whether problems in global trade should be addressed primarily through existing multilateral rules or through a greater emphasis on reciprocal treatment and coordinated action among like-minded economies.

The first concrete outcome emerged Wednesday from steel.

Members of the Global Forum on Steel Excess Capacity agreed on a new “Milwaukee Framework” designed to strengthen coordinated action against excess production.

China, the world’s largest steel producer, is not a member of the forum. Neither is India, the world’s second-largest producer, making the distinction between the G20 meeting and the separate steel forum important.

Asked whether participating countries had agreed to raise tariffs against Chinese steel, Greer said governments would determine their own measures.

“Well, every country will do what they think is appropriate,” he said. “We want to coordinate those measures. The United States has taken robust measures, and it probably makes sense for other countries to do that too.”

The steel debate is part of a larger dispute over industrial overcapacity and the role of state support in international competition.

Washington and several other market economies have increasingly raised concerns about subsidies, below-market financing and production that exceeds domestic demand, particularly in China.

The argument extends beyond steel to strategically important sectors including electric vehicles, batteries and clean-energy manufacturing.

For emerging economies such as India, however, the debate also raises questions over how international trade rules distinguish between what advanced economies regard as market-distorting subsidies and industrial policies used by developing countries to build domestic manufacturing capacity.

Forced labour is another major item on the Milwaukee agenda.

The United States wants stronger international action to prevent goods produced with forced labour from entering global supply chains. While there is broad support for combating forced labour, questions remain over enforcement, traceability and the obligations imposed on importers to establish the origins of components and raw materials.

Food trade could prove another sensitive area.

Washington has called for G20 members to oppose the “weaponisation” of trade in food. The issue intersects with longstanding disagreements over agricultural export restrictions, food security and the policy space available to developing countries.

India has traditionally defended flexibility for developing economies on food security and agriculture within the WTO system.

Underlying all these discussions is a broader disagreement over tariffs.

The Trump administration argues that trade policy should protect domestic manufacturing, strengthen supply chains and produce more reciprocal economic relationships.

That philosophy was visible in the choice of Milwaukee as the venue.

G20 ministers toured Rockwell Automation on Wednesday as the administration sought to showcase American manufacturing.

Greer said the United States deliberately brought trade ministers to Milwaukee so they could see American factories and “see what we’re trying to protect.”

But several countries attending the meeting have themselves faced US tariffs or trade pressure.

Canada is among the countries navigating that tension.

Canadian International Trade Minister Maninder Sidhu is attending the ministerial, while Ottawa seeks to manage its economic relationship with Washington and diversify trade with other partners. Sidhu is also expected to meet India’s representative Thursday.

Brazil has meanwhile produced one of the first significant bilateral developments from Milwaukee.

Brazilian Foreign Minister Mauro Vieira and Minister of Development, Industry, Trade and Services Marcio Elias Rosa met Greer, with Brazil and the United States agreeing to establish a working group to discuss a possible trade agreement following tariff tensions between the two countries.

The same Brazilian ministers also met Goyal as India pursued its own bilateral diplomacy on the sidelines.

Goyal separately met Polish Finance and Economy Minister Andrzej Domański.

“Discussed new avenues to further strengthen trade & investment ties, and how the India-EU FTA can create new opportunities for businesses and deepen economic cooperation between India & Poland,” Goyal said after the meeting.

The Commerce Minister also met Blake Moret, chairman and CEO of Rockwell Automation, and sought greater investment in India.

“India’s rapidly evolving manufacturing landscape, expanding industrial base, and strong technological capabilities present exciting avenues for collaboration in industrial automation and digital transformation,” Goyal said.

He invited Rockwell Automation “to leverage India’s skilled engineering talent and supportive policy environment to build resilient, tech-driven supply chains for the world.”

For New Delhi, however, one of the most closely watched developments remains its trade negotiations with Washington.

India and the United States are seeking to advance negotiations toward a bilateral trade agreement and an interim arrangement.

The Commerce Ministry said before Goyal’s visit that his US engagements would form part of efforts to advance “a balanced and mutually beneficial India-US Bilateral Trade Agreement (BTA) and finalise an interim deal in line with the Joint Statement of 7 February 2026.”

The ministers therefore have two parallel tracks.

Inside the formal sessions, governments are debating fundamental questions about WTO rules, reciprocity, industrial policy, supply chains and the role of tariffs.

Outside them, ministers are pursuing bilateral trade agreements, investment opportunities and solutions to disputes that have become increasingly difficult to resolve through the multilateral system alone.

The G20 Trade Ministers’ Meeting continues Thursday, when further bilateral engagements are expected, and Greer is scheduled to hold a press conference.

Attention will also turn to whether ministers can find common language on the most contentious issues, particularly Most-Favoured-Nation treatment, industrial overcapacity and food trade.

The outcome could indicate whether the world’s largest economies can still reach meaningful consensus on trade — or whether international commerce is moving increasingly toward reciprocal arrangements, bilateral agreements and coalitions of countries sharing similar economic policies.

IANS