Lagarde calls for stronger international cooperation to address gaps in international rule book
THE AFRICA BAZAAR MAGAZINE
June 29, 2019
The International Monetary Fund’s Managing Director Ms. Christine Lagarde urged world leaders to build a “trading system fit for today’s world” that will help address gaps in the international rule book in areas such as e-commerce, industrial subsidies, agricultural and services.
Ms. Lagarde made the remarks at the end of the Group of 20 Leaders’ Summit in Japan.
“The global economy has hit a rough patch: investment has weakened and trade has slowed significantly, with export and import growth rates at their lowest level since the great financial crisis. Even though the IMF expects growth to strengthen somewhat going forward, the risks to the outlook remain serious,” warned Ms. Lagarde.
She said chief among these risks is trade, underscoring that tariffs and other unresolved trade issues carry a great deal of uncertainty about the future, and are holding back the global economy, even with the resumption of trade talks between the United States and China-– which she said is a welcomed step in the right direction. Reiterating that the priority should be to reduce obstacles to trade—new and old, tariffs and otherwise—and to address the underlying sources of trade tensions and distortions, Ms.Lagarde added that Japanese Prime Minister Shinzo Abe’s announcement of the Osaka Track framework relating to data flow and e-commerce is a great example of putting in place a system to help address some of these issues.
She also also joined other leaders in calling for accelerated reform of the World Trade Organization for the benefit of all economies.
Ms. Lagarde noted that there are other important areas where policy action is needed to restore confidence and help growth, stating that central banks will need to continue to adjust policies with incoming data, and fiscal policy must balance growth support and debt sustainability; and structural reforms can support productivity and employment. She said the G20 should continue its important efforts to address a range of urgent common issues from corporate taxation to financial regulatory reform to corruption and climate change and women’s empowerment.
Ms. Lagarde, who participated at the G20 Leaders’ event on women’s empowerment, where she presented the IMF’s assessment of the issue said “it is as macro-critical for the global economy, pointing to analysis which shows that closing the gender gap could boost GDP significantly in many other countries.”
“While the global economy is currently at a precarious stage, with the right policies and working together, we can overcome the challenges that we face and set the world on a path of stronger, more sustainable, balanced, and inclusive growth,” Ms. Lagarde said.