IMF, World Bank appeal for an end to trade wars

The leaders of the International Monetary Fund (IMF) and the World Bank appealed to their 189 member countries on Friday to resolve widening disagreements on trade and other issues, warning that the divisions threatened to make the consequences of a global slowdown even worse.

IMF Managing Director Kristalina Georgieva said a variety of factors were taking a toll from a trade war that has engulfed the world’s two biggest economies, the United States and China, to spreading weakness in Europe linked to Brexit and rising geopolitical tensions in the West Asia.

“Trade tensions are now taking a toll on business confidence and investment,” she said in her opening address to the finance officials.

World Bank President David Malpass said the slowdown in global growth was hurting efforts to help the

700 million people around the globe mired in extreme poverty, especially in nations trying to cope with a flood of refugees from regional conflicts.

“Many countries are facing fragility, conflict and violence, making development even more urgent and difficult,” he said.

Georgieva, a Bulgarian economist who had been the No.2 official at the World Bank, recognised the accomplishments of her IMF predecessor, Christine Lagarde, the first woman to head the IMF, who was in the audience for the speech.

“As someone who grew up behind the Iron Curtain, I could never have expected to lead the IMF,” Georgieva said, noting that she had personally witnessed the devastation of bad economic policies when her mother lost 98 per cent of her life savings during a period of hyperinflation in the 1990s in Bulgaria.

She said the world was currently caught in a synchronised slowdown with nearly 90 per cent of the global economy experiencing weaker growth this year. Because of this, the IMF projected earlier this week that global growth would only reach 3 per cent this year, the weakest performance in a decade.

The IMF and World Bank meetings were expected to be dominated by the trade disputes which were triggered by the Trump administration’s get-tough policies aimed at lowering America’s huge trade deficits and boosting US manufacturing jobs. So far those efforts have made little headway.

In addition to the battle between the US and China, higher US tariffs went into effect Friday on $7.5 billion in European goods coming into the US in a dispute involving airplane subsidies.

French Finance Minister Bruno Le Maire told reporters at the IMF on Friday that the real winner of a trade war between the US and the European Union would likely be China. He said the EU was ready to negotiate a settlement to avoid the tariffs but so far the United States has rejected those efforts.

The IMF and World Bank meetings were expected to be dominated by the trade disputes which were triggered by the Trump administration’s get-tough policies aimed at lowering America’s huge trade deficits and boosting US manufacturing jobs