World finance leaders defend globalization
WASHINGTON (AP) – World finance leaders on Thursday defended globalization against an assault from President Donald Trump and European populists. They argued that blocking free trade would hobble economic growth instead of saving jobs from foreign competition.
World Bank president Jim Yong Kim told journalists that freer trade and more openness were "critical for the future of the world."
Christine Lagarde, the managing director of the International Monetary Fund, said that the answer to the wave of populism gaining support in many countries was to work for "more growth and better growth" in the world economy.
Lagarde and Kim spoke at the opening of three days of discussions among global finance leaders representing the 189 countries that are members of the IMF and its sister lending organization, the World Bank.
The spring meetings, which will also include discussions Friday among finance ministers and central bank leaders from the Group of 20 major economic powers, were likely to be dominated by talk over the Trump administration's efforts to reduce America's huge trade deficits, which Trump during the presidential campaign blamed for the loss of millions of good-paying factory jobs.
The US will be represented at the meetings by Treasury Secretary Steven Mnuchin and Federal Reserve chair Janet Yellen.
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. While he had said that he would brand China a currency manipulator immediately on taking office, the administration sent Congress a report last week that found China was not manipulating its currency.
The Treasury report did put China and five other nations including Japan and Germany on a "monitoring list" which will subject them to increased consultations aimed at lowering their large trade surpluses with the US.
The anti-globalization backlash has also shown up in Europe, playing a factor in last summer's vote in Britain to exit the European Union, and also in the election campaigns in other countries including this Sunday's vote for president in France.
Mnuchin spoke Thursday at a conference sponsored by the Institute of International Finance, an organization representing the world's biggest banks. He said that the Trump administration's view was that "what is good for the US economy is good for the global economy" because stronger growth in the US will have a spillover effect for other nations.
IMF managing director Christine Lagarde speaks during the 2017 World Bank Group Spring Meetings in Washington. The leaders of the International Monetary Fund and the World Bank begin their spring meetings with the mission of strengthening a gradually improving global economy while facing resistance to free trade and political unrest in some countries.