End trade tensions to spur growth, finance chiefs urge
washington — The heads of the IMF, OECD, World Bank and WTO made a joint call for the world to resist a rising tide of US-led protectionism and return to the path of liberalisation that had lifted millions out of poverty.
Ahead of this week’s annual meetings of the International Monetary Fund and World Bank in Bali, IMF managing director Christine Lagarde called for global policy makers meeting on the Indonesian island to focus on de-escalating trade tensions this week.
Hanging over the meetings is both President Donald Trump’s titfor-tat tariff war with China and his assault on the World Trade Organisation — a global trade system that he argues has worked against US interests and workers for too long.
Lagarde pointed to Trump’s recent renegotiation of the North American Free Trade Agreement with Canada and Mexico as one reason for hope alongside EU efforts to close new trade deals.
“Let us try to use that momentum to turn tension into rapprochement,” she said on Wednesday.
But she also warned that the global trading system was under threat and that the risks of further disruption remained.
Jim Yong Kim, the World Bank president, said slowing global growth was already starting to have an effect on poverty reduction around the world. He warned that trade tensions were causing companies to put investment decisions on hold, something that would further hinder growth.
“Every country will feel the negative effects,” he said.
Roberto Azevedo, the WTO’s director-general, said the organisation’s members had started to acknowledge the need for reform of the institution and global trading rules. There was also a near-universal acknowledgment that globalisation had not benefited everyone in the world and that more needed to be done to help those left behind.
But he warned that abandoning the WTO, as Trump has threatened to do, and killing the multilateral trading system that had evolved since World War II would mean walking away from decades of work that had broadly benefited the world.
Angel Gurria, the head of the Paris-based Organisation for Economic Cooperation and Development, called for more to be done to find multilateral solutions to problems such as excess global steel capacity. —