WASHINGTON, DC - APRIL 20: International Monetary Fund Managing Director Christine Lagarde talks with reporters during a news conference at the World Bank and IMF Spring Meetings April 20, 2017 in Washington, DC. According to the IMF's World Economic Outlook, the global economy is projected to grow 3.5-percent in 2017, up from its previous forecast of 3.4-percent in January. Chip Somodevilla/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==
WASHINGTON: International Monetary Fund (IMF) managing director Christine Lagarde said on Thursday she believes the IMF can work with the Trump administration to improve the global trading system, but cautioned against jeopardising open trade as a growth engine.
Lagarde told a news conference at the opening of the IMF and World Bank spring meetings in Washington that the IMF saw the need to reduce subsidies and other trade distortions that limit competition, but also said “protectionist measures” needed to be avoided.
“From the various contacts that I’ve had with the administration so far, I have every reason to believe that we will make progress, that we will cooperate all together in order to support and indeed improve the system as we have it,” Lagarde said.
She added that improvements must ensure a “level playing field” for trade, adopting a phrase often used by Trump administration officials.
But as she was speaking, US President Donald Trump was preparing to sign an executive order to study whether steel imports into the United States could be restricted for national security reasons under a law passed in 1962.
Lagarde said that the rising number of World Trade Organisation dispute cases and rule violations showed that “there is clearly an issue that needs to be addressed.”
She said the WTO dispute settlement system has room for improvement. Although the United States regularly uses the system to try to remove unfair trade restrictions and subsides, Trump administration officials have complained that countries often ignore its rulings.
But the IMF chief said that such improvements can only come through multilateral dialogues, like those occurring at this week’s meetings of the IMF, World Bank and G20 finance ministers.
“We believe very firmly in this institution, in the value and virtues of dialogue, cooperation, reciprocated assessment,” she said. “We will contribute our part where we have competence and where it is our mission.”
The Trump administration has complained about Germany’s high trade surplus with the United States. Lagarde repeated her view that Germany should take steps to reduce its current account and trade surpluses by encouraging more consumption. - Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
