International Monetary Fund Christine Lagarde (L) talks to US Federal Reserve Chairwoman Janet Yellen (R) at a breakfast meeting at the IMF Headquarters in Washington, DC on 22 April, 2017 [Image: IMF]Days after US President Donald Trump signed a “Buy American, Hire American” executive order, member countries of the International Monetary Fund have pledged to “avoid inward-looking policies” to keep the growth momentum.
The International Monetary and Financial Committee (IMFC), the IMF’s steering body, however, dropped its past pledge to resist all forms of protectionism, according to the communique released on Saturday.
“We will also work together to reduce excessive global imbalances by pursuing appropriate policies. We are working to strengthen the contribution of trade to our economies,” it said.
Asked about the change of wording on trade, Mexico’s central bank governor Agustin Carstens, who heads the IMFC, said protectionism is “a relative term” and there is no country in the world that doesn’t have any sort of restriction on trade.
“Instead of dwelling on what that concept means, we managed to sort of put it in a more positive and more constructive framework,” he said at a press conference, adding the membership agreed to counsel against inward-looking policies and work to strengthen the contribution of trade to their economies.
“This was a very strong consensus, and I think that is a more positive or constructive way to address issues that at the end of the day have to do with free and also fair trade,” he argued.
Meanwhile, on Saturday German Foreign Minister Sigmar Gabriel praised China for their stance towards open trade.
“We are carefully observing that China is speaking out more and more for open system of world trade and against protectionism,” Gabriel said.
Beijing is seeking to usurp America’s traditional role as the champion of free trade and open markets even as US President Donald Trump continues to stress on a protectionist stance.
Trump on Tuesday ordered a review of the U.S. visa program for bringing high-skilled foreign workers into the country. He also ordered a review of government procurement rules favoring American companies to see if they are actually benefiting.
“With this action, we are sending a powerful signal to the world: We’re going to defend our workers, protect our jobs and finally put America first,” Trump said.
On Saturday, the IMF statement also warned of heightened political and policy uncertainties.
“There was also clear recognition in the room that policies going forward are going to be needed in order to move from that growth momentum to more sharing and more inclusive growth,” Christine Lagarde, managing director of the IMF, said at the same press conference.
“We need to secure what has been conductive to growth, and what has served the international community over the last few decades,” she added.
TBP and Agencies
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