IMF chief says all members believe in free, fair trade

Reuters: International Monetary Fund Managing Director Christine Lagarde said on Wednesday that the 70-year-old multilateral institution will keep evolving to meet the needs of its 189 members, but added that none are opposed to free and fair trade.

“The institution is changing and we will continue to do that in order to adjust to the needs of the membership,” Lagarde said at a forum at the start of IMF and World Bank spring meetings.

“And we will be listening to all members as they themselves change over the course of time. But everything I have seen leads me to believe that all members believe in the virtue and the value of free, fair and global trade,” Lagarde told the Bretton Woods Committee. The IMF and World Bank meetings are starting amid concerns over the Trump administration’s commitment to multilateral cooperation as it embarks on an “America First” trade agenda that aims to slash US trade deficits and take steps to shut out more imports. Responding to a question about these concerns, Lagarde said that all of the Fund’s members were keen to examine ways “to make sure that trade benefits all under conditions that are fair and constitute a level playing field. We will continue to try to deliver on that front.”

She said China was not likely to make major strides toward needed reforms to its economy that would rein in growing debt levels until after the country’s 19th Party Congress in the fall of this year.

“It’s our assessment that the policies that would be needed are probably not going to be put in place until...maybe a little less than a year from now,” Lagarde said. “Once the Congress is over, then we are likely to see more movement than what we see at the moment. Everything that we hear, every analysis that we conduct, drives us to that conclusion.”

However, she said China was taking some steps to shrink excess capacity in its coal sector and to a lesser extent, steel. She said that she hoped that stronger actions would be taken by November or December.

Asked whether the Fund would consider providing more frequent assessments of currency valuations than its once-a-year External Sector Report, Lagarde said that was not likely because of the “very heavy-duty work” needed to assess the currencies of 29 countries representing about 80 percent of global gross domestic product, an undertaking that required extensive local engagement and analysis.