IMF meeting drops anti-protectionism pledge

By Bill Wilson
Business reporter, BBC News

Image source, Getty Images
Image caption, Financial leaders have been meeting in Washington

Global finance leaders from the IMF and World Bank have dropped a pledge to fight trade protectionism from the closing note of their spring meetings.

An IMF statement said members would "work together" to reduce global trade and current account imbalances "through appropriate policies".

It comes as the Trump administration looks to cut US trade deficits.

It has threatened to impose tariffs on nations that have trade surpluses with the US, including China and Germany.

The administration is aggressively pursuing an "America First" policy.

'Reciprocal trade'

Earlier in the week the International Monetary Fund (IMF) had warned that protectionist policies could choke off improving global growth.

But at the meeting in Washington, US Treasury Secretary Steven Mnuchin said that President Donald Trump "believes in reciprocal trade deals and reciprocal free trade".

"What that means is that if our markets are open, there should be a reciprocal nature to other markets which should be open as well," he added.

He also called for the IMF to step up its surveillance of members' foreign exchange rates.

Meanwhile, Mexican central bank chief Agustin Carstens, who chairs the IMF steering committee, attempted to downplay the significance of omitting the pledge on protectionism, saying it was an "ambiguous" term.

"Instead of dwelling on what that concept means, we managed to put it in a more positive, more constructive framework," he said.

The development comes after ministers from the G20 group of leading industrial nations left their two-day meeting in March without renewing their long-standing pledge to bolster free trade.

They dropped an anti-protectionist commitment after opposition from the US.

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