Saturday, 29 January 2022

IMF urges reforms of global trade system

WASHINGTON: The International Monetary Fund welcomed signs of a de-escalation in US-China trade tensions but said an urgent updating of trade rules was needed to restore strong growth to the global economy.

Managing Director Kristalina Georgieva said she was encouraged by news of a tentative trade deal reached by Washington and Beijing last week, but urged the world’s two largest economies to work toward a lasting “trade peace.”

Georgieva, speaking with reporters at the IMF/World Bank annual meetings, also called for concerted efforts to reform the World Trade Organization to better account for e-commerce and the service sector, but also to ensure a more peaceful and prosperous world.

Ending trade tensions between the United States and China was a positive step that would help bolster global economic growth, Georgieva said.

The IMF estimated that a tentative trade deal reached by Washington and Beijing last week could reduce the harm done by tit-for-tat tariffs imposed by both countries over the past 15 months. Instead of dragging global growth down by 0.8%, the impact might be limited to 0.6%, she said.

But Georgieva, a Bulgarian economist and the first person from an emerging market to head the global lender, said further efforts were required beyond the potential bilateral trade agreement.

“We are not looking for a small boost in growth,” she said. “We want a bigger acceleration of the world economy and for that we need more than just that.”

Underscoring the role that positive trading relations have played in reducing conflict and promoting peace, Georgieva called for increased efforts to reform the WTO and ensure that future trade agreements were more adaptable, agile and better reflected the changing nature of the global economy.

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