IMF calls for de-escalation of trade disputes

IMF managing director, Christine Lagarde. Source: IMF

Managing director of the International Monetary Fund (IMF), Christine Lagarde, called for a de-escalation of current trade disputes when she addressed an IMF-World Bank annual meeting in Bali today.

She said that policymakers would need to work together and she remained hopeful that a constructive discussion could be entered into since globally there was an appetite to improve and expand trade.

“Think of the flurry of welcome discussions and proposals to strengthen the World Trade Organisation, or think of all the new trade deals, such as TPP-11 and the African agreement, and the progress made on the US-Mexico-Canada deal,” said Lagarde. “So let us use that momentum to turn tension into rapprochement.”

A further imperative, she added, was for the global trade industry to join together to fix and modernise the global trade system by looking at the distortionary effects of state subsidies, improving the enforcement of intellectual property rights, and taking steps to ensure effective competition in order to avoid market-dominant position excesses.

This, Lagarde noted, meant the unlocking of the full potential of e-commerce and other tradeable services.

She added that domestic policies ensuring inclusivity in global trade needed to be implemented as trade could be crucial to transformation efforts by boosting productivity, spreading new technologies and making products more affordable.

This includes scaled-up investment in training and social safety nets so that workers can upgrade their skills, transition to higher quality jobs, and earn more.

“In Asia, for example, trade has been instrumental in creating the world’s largest middle classes, and around the globe economic integration has boosted per capita incomes while creating millions of new jobs with higher wages,” added Lagarde. “And yet, we know that some workers, and some communities, are heavily affected by the human cost of disruption, whether from technology, or trade, or a combination of both.”

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