LONDON • As global finance chiefs return from their first collective engagement with the Trump administration, they are bringing home a load of unfinished business.

While the weekend meeting of the Group of 20 in the German spa town of Baden-Baden kept up its tradition of a communique to present a veneer of agreement, it only did so by papering over new cracks in the order underpinning the world economy.

Barely hinting at the merits of free trade, the statement's omissions show how global economic diplomacy is now beset with a fault line that could overshadow it for months, if not years.

As recently as last July, the G-20 had promised to "resist all forms of protectionism", a pledge now absent as the previous consensus on commerce is challenged by the recent election of Mr Donald Trump as US President.

Before he and the rest of the group's leaders meet again in Hamburg in July, his counterparts have little more than 100 days to gauge if the removal of those words represents the beginning or the end of his administration's attempt to reset global terms of trade that it abhors as economically unfair.

Said Mr Paul Donovan, global chief economist at UBS Wealth Management in London: "Saying that the G-20 wishes to avoid protectionism does not necessarily make it so - arguably protectionism has risen in the past few years in spite of public pronouncements.

"However, the deliberate change in tone reinforces the idea that on trade, the Trump administration will implement at least some of the campaign rhetoric."

That shift followed hours of wrangling that kept officials in suspense on whether the G-20 would even mention trade, with occasional doubts that a communique might be produced at all.

The US delegation, led by Treasury Secretary Steven Mnuchin, wanted a reference on the need for trade to be "fair" while China, a previously unlikely champion in such matters, led a defence of the existing rules-based regime under the World Trade Organisation.

In the end, ministers agreed that "we are working to strengthen the contribution of trade to our economies", a compromise to salvage what remained of the foundations of an understanding that the G-20 had for long largely taken for granted.

Participants such as Mr Pierre Moscovici, the European Union's commissioner for economic and financial affairs, are now holding out for the Hamburg summit to repair the damage.

"The single most important decision which helped to fend off a type of depression like in the 1930s in the wake of the Lehman Brothers collapse was that we avoided a fallback into protectionism and that we kept the global economy open," Mr Moscovici told reporters.

However, Mr Donovan said such arguments over trade risk being a quarter of a century out of date, because they focus on physical commerce and ignore the changing nature of the economy.

The contours of global trade are different: Mr Trump's complaints about the US trade deficit overlooks a surplus in services that amounts to US$248 billion (S$347 billion), encompassing exports from education to software.

Mr Donovan said he predicts physical commerce will decline in relative importance, because of the virtual economy and the use of robotics to localise production.

"Supply chains are starting to shrink, and that process is likely to continue," he said.

"The question is whether it happens naturally or in a disruptive manner."

BLOOMBERG