The Managing Director of the International Monetary Fund (IMF) Christine Lagarde says trade and global economic growth should be prioritised and sustained. She was addressing the media ahead of the IMF and World Bank Spring Meetings in Washington.
The annual gathering brings together world finance leaders to discuss issues of global concern.
Legarde says, “Our first priority is to maintain growth momentum. Second, and really importantly, we need to reinvigorate productivity, especially by boosting innovation and trade and we need to make that global growth more inclusive. That inclusiveness needs to be identified and supported by policies on three dimensions; within countries, across countries and between generations.”
IMF Managing Director Christine Lagarde said she would work with the Trump administration to improve the global trading system. She added that there was a need to reduce government subsidies for industry and other trade distortions that limited competition, but said "protectionist measures" needed to be avoided.
"From the various contacts that I've had with the (Trump) administration so far, I have every reason to believe that we will make progress, that we will cooperate all together in order to support and indeed improve the system as we have it," Lagarde said in a news conference.
The changes, including improvements to WTO dispute settlement rules, must ensure a "level playing field" for trade, Lagarde said, adding that such changes could only be achieved through multilateral dialogue.
The IMF and World Bank meetings come about a month after U.S. Treasury Secretary Steven Mnuchin insisted that an anti-protectionism pledge be dropped from a Group of 20 communique issued in Baden-Baden, Germany.
Eswar Prasad, former head of the IMF's China department, said the Trump administration may choose to simply ignore the advice of the IMF and other institutions.
"The IMF has little leverage since its limited toolkit of analysis-based advice, persuasion, and peer pressure is unlikely to have much of an impact on this administration's policies," said Prasad, now an international trade professor at Cornell University. Additional reporting by Reuters
Also speaking at at the briefing in Washington, World Bank Group President Jim Yong Kim highlighted issues around famine and the current global economic outlook:
“We're encouraged to see stronger economic prospects after years of disappointing global growth and countries that have the fiscal space need to continue with structure reforms. This is vital to accelerating the sustainable and inclusive economic growth needed to end extreme poverty by 2030. And we will use every tool we have financial and advisory to prevent famine in the future.”