World fi­nance lead­ers de­fend glob­al­iza­tion

The Philippine Star - - BUSINESS -

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.

AP

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.

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