Finance ministers from various G20 countries are meeting in Mexico City today to discuss pressing economic issues as the world's largest economy —  the U.S. — prepares to elect its next president.

Officials gathered Sunday to discuss Europe's ongoing debt crisis, international trade imbalances and the U.S. "fiscal cliff" against the backdrop of the election.

The term fiscal cliff refers to the economic quandary facing the next U.S. president. Regardless of who wins on Tuesday, commitments already in place will see a reduction in government spending across numerous departments at the same time as taxes start to rise.

'A fiscal consolidation is coming.' —Jose Antonio Meade, Mexico's finance minister

A host of payroll and business tax cuts and a series of income tax cuts on the super-rich implemented by then President George W. Bush are due to expire in the next few months, just as the first round of taxes related to President Barack Obama’s health-care law are set to begin.

Closing those tax loopholes would bring in more revenue for the U.S. government and help it get closer to a balanced budget, but in the short term, that means less money available for consumers to spend in the real economy.

The last time these issues came up was during the U.S. debt ceiling debate in the spring of 2012, and the uncertainty nearly derailed the global economy at the time.

The U.S. is again on pace to hit its new debt ceiling around the new year, and it seems likely that further spending cutbacks will be promised before lawmakers agree to extend the debt ceiling again and keep the world's largest economy functioning normally.

Experts have suggested hte uncertainty could shave as much as four per cent off America's GDP.

"How the cliff is addressed is critical," BMO strategist Andy Busch said Monday. "To me, there are too many potential negative scenarios."

Canadian policymakers in attendance

Some key players such as U.S. Treasury Secretary Timothy Geithner and Brazilian finance chief Guido Mantega aren't at the G20 meeting, but attending are Canada's Finance Minister Jim Flaherty and central bank governor Mark Carney.

Flaherty told reporters Sunday that the fiscal cliff is the "biggest" international economic risk facing Canada and other countries.

Mexican Finance Minister Jose Antonio Meade said the fiscal cliff will likely be the most pressing issue discussed.

"In recent meetings, the United States has expressed confidence that it will be able to build the political consensuses needed to make adjustments that will send clear signals that a fiscal consolidation is coming," said Meade.

The two-day meeting will wrap up before polling stations open on Tuesday, and ahead of the annual IMF and World Bank meeting in Tokyo.

Europe's debt crisis has been a repeated topic at these meetings, and the issue is again likely to come up — although there's a renewed sense of optimism on the topic.

In a working meeting with delegates late Sunday, Spanish Economy Minister Luis de Guindos was expected to explain his government's labour and banking reforms designed to deal with a crisis that has seen the country's unemployment rate rise to 25 per cent.

An official with the Spanish delegation who declined to be named in line with official policy said de Guindos was not expected to announce any changes in Spain's position on international financial aid.

Spanish Prime Minister Mariano Rajoy said last week that he saw no immediate need to ask for help but did not rule it out in the future.

With files from The Associated Press