Sun, Apr 22, 2018 - Page 16 News List

IMF must better police external imbalances: US


The IMF needs to “step up to the plate” to police large external imbalances, and demand the dismantling of trade barriers and protection of intellectual property rights, US Secretary of the Treasury Steven Mnuchin said on Friday.

In a statement to the IMF Steering Committee, which met yesterday, Mnuchin said that countries that have large and persistent external surpluses must do more to carry their share of the adjustment.

“The IMF must step up to the plate on this issue, providing a more robust voice and consistently noting when members maintain macroeconomic, foreign exchange and trade policies that facilitate unfair competitive advantage or lead to imbalanced growth,” Mnuchin said.

The statement reflects US President Donald Trump’s administration’s view that the IMF, through its country surveillance and policy advocacy efforts, could help rein in what it has said are China’s trade abuses.

The inclusion of a reference to intellectual property follows US threats to impose tariffs on imported Chinese goods over allegations that Beijing has misappropriated US intellectual property through various industrial policies, including joint-venture requirements for foreign firms.

“We strongly believe that unfair global trade practices impede stronger US and global growth, acting as a persistent drag on the global economy,” Mnuchin said. “Ensuring that trade is free, fair and reciprocal will boost global trade and support stronger, more sustainable growth.”

He said that the Trump administration welcomes the IMF’s efforts to improve the External Sector Report, the IMF’s assessment of currency valuations.

“At the same time, we urge the IMF to speak out more forcefully on the issue of external imbalances, including by providing clear policy recommendations for countries with large surpluses, in support of more balanced global growth,” Mnuchin added.

Meanwhile, French Minister of the Economy and Finance Bruno Le Maire on Friday said that the EU needs to be exempted from steel and aluminum tariffs announced by the US to work with Washington on trade with China.

“We are close allies between the EU and the United States. We cannot live with full confidence with the risk of being hit by those measures and by those new tariffs,” Le Maire told a news conference during the IMF and World Bank spring meetings. “We cannot live with a kind of sword of Damocles hanging over our heads.”

“If we want to move forward ... if we want to address the issue of trade, an issue of the new relationship with China, because we both want to engage China in a new multilateral order, we must first of all get rid of that threat,” he said.

Trump last month announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports to counter what he has said is unfair international competition.

The exemption of the EU from the tariffs should be “full and permanent,” Le Maire said.

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