Finance leaders downplay differences with Trump over trade
- Author: Zachary Reyes Apr 23, 2017,
Apr 23, 2017, 15:15
World finance leaders on Thursday defended globalization against an assault from President Donald Trump and European populists. Greece's Finance Minister Euclid Tsakalotos is due to meet Lagarde and the German Finance Minister Wolfgang Schaeuble on Friday.
Speaking to bankers just hours after the formal start of the International Monetary Fund and World Bank spring meetings, White House National Economic Council Director Gary Cohn said Washington was prepared to get tougher in the trade arena.
The IMF said its priorities include accommodative monetary policy, growth-friendly fiscal policy, tailored, prioritised, and sequenced structural reforms; safeguarding financial stability and a more inclusive global economy.
Trump tapped into a rising backlash against free trade during the campaign, pledging that he would impose punitive tariffs of up to 45 percent on countries such as China and Mexico which he blamed for pursuing unfair trade practices that were hurting American workers.
Such moves, including a review of "Buy American" rules launched earlier this week, have raised concerns that the Trump administration is looking outside the World Trade Organization for remedies to restrict US imports. Lagarde described protectionist measures as "self-inflicted wounds" that hobble economic growth.
"There was also clear recognition in the room that policies going forward are going to be needed in order to move from that growth momentum to more sharing and more inclusive growth", Christine Lagarde, managing director of the International Monetary Fund, said at the same press conference.
Jim Yong Kim, president World Bank Group in a separate media briefing said the multilateral lender does not plan to change its stance on financing alternative energy projects and mitigating the effects of climate change.
Aso tried to make the case for a trade deal involving the U.S., Japan and 10 other Pacific Rim countries.
The G-20 finance officials generally agreed with the IMF's assessment in its latest economic outlook - that global growth should pick up this year, helped by improving conditions in the United States and China, the world's two biggest economies.
"The IMF has little leverage since its limited toolkit of analysis-based advice, persuasion, and peer pressure is unlikely to have much of an impact on this administration´s policies", said Prasad, now an global trade professor at Cornell University. Melenchon has said he would work to end the independence of the European Central Bank.
In the USA, the Federal Reserve has raised short-term interest rates twice since December, is on target for more increases this year and is weighing whether to begin selling part of its vast portfolio of bonds, a move that also could drive up rates.
"And we will be listening to all members as they themselves change over the course of time".
Crisis legacies, high-debt levels, weak-productivity growth, and demographic trends remain challenging headwinds in advanced economies; while domestic imbalances, sharper-than- expected financial tightening, and negative spillovers from global uncertainty pose challenges for some emerging market and developing countries, the communique said.