By David Milliken
WHISTLER, British Columbia (Reuters) – The United States should focus on freeing up trade in services rather than imposing tariffs on imported goods, Bank of England Governor Mark Carney said on Thursday after the United States said it would levy tariffs on steel and aluminium imported from the European Union.
Speaking at a meeting of finance ministers and central bank governors from the Group of Seven rich nations in the Canadian mountain resort of Whistler, Carney highlighted the dominance of the services sector in the global economy, though he said that responding to tariffs was not his direct responsibility as a central bank governor.
“But the bigger context we would put this in is to say that this focus on goods trade … is not the right focus in a hyperconnected world where most of the economic activity, most people work, most small businesses, most women, work in the service sector,” he told a panel discussion.
Trade secretary, Liam Fox, speaking shortly after Carney, said he could not rule out retaliatory tariffs.
Carney said that if countries made the same progress on freeing up trade in services as had been achieved on goods trade in the past, both the United States’ and Britain’s total trade deficits would be half their current size.
Separately, Carney said better protections were needed for investors in cryptocurrencies such as bitcoin, and said it would be on the agenda for regulators meeting in Whistler.
“We need to regulate for the people who want to play in that space, if I can put it that way. They deserve the same level of investor protection as investors in other areas, and they are certainly not getting it,” he said.
British regulators, including the Bank of England, are working on a report on cryptocurrency regulation that is due later this year.
Carney has previously said cryptocurrencies are a poor alternative to existing central bank payment systems, but that the underlying technologies may have valuable applications.
(Reporting by David Milliken; Editing by Chizu Nomiyama and Leslie Adler)