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Sunday, April 23, 2017, 09:40

Global finance leaders grapple with globalization fears

By Associated Press

Global finance leaders grapple with globalization fears
From left, World Bank's Vice President for Sustainable Development Laura Tuck, World Bank Group President Jim Yong Kim, Christine Lagarde Managing Director of the International Monetary Fund, and Colombia's Finance and Public Credit Minister Mauricio Cardenas turn for a group photograph during Carbon Pricing Leadership Coalition Second High Level Assembly at the 2017 World Bank Group Spring Meetings in Washington, April 20, 2017. (Carolyn Kaster / AP)
WASHINGTON — Global finance leaders on Saturday dropped a sharp condemnation of trade protectionism and references to climate change from a closing statement that wrapped up the spring meetings of the 189-nation International Monetary Fund and the World Bank.

We all want free and fair trade and that is what is reflected in the communique

Agustin Carstens, Head, Bank of Mexico

This year's meetings were dominated by a debate over how to respond to a rising tide of anti-globalization sentiment evidenced in the United States by the election of President Donald Trump, who pledged during last year's campaign that he would reduce America's huge trade deficits which he blamed for the loss of millions of good-paying factory jobs.

In its communique, the IMF urged nations to avoid "inward-looking policies," but it did not include tougher language the IMF had used in an October statement in which it had called on all countries to "resist all forms of protectionism." The new statement also dropped any mention of the threat of climate change.

Trump has threatened to impose punitive tariffs of up to 45 percent against Mexico, China and other nations he believes are competing unfairly with American workers. During his presidential campaign he called climate change a hoax.

At a closing news conference, IMF Managing Director Christine Lagarde and Agustin Carstens, head of the Bank of Mexico and chair of the IMF's policy committee, sought to downplay the changes.

Lagarde noted that strong language condemning protectionism and promoting efforts to combat climate change, while taken out of the communique, remained in a separate document setting out the IMF's policy agenda.

Carstens said that it was important on the issue of trade to recognize the viewpoints of different countries.

"We all want free and fair trade and that is what is reflected in the communique," he told reporters when asked why the language on protectionism had been dropped.

A similar change on the issue of protectionism was made in a communique that the Group of 20 major economies issued last month in Baden-Baden, Germany.

At a joint appearance with Lagade on Saturday, Trump's Treasury secretary Steven Mnuchin said that the internal debate over the wording of the IMF communique had taken much less time than the debate over the wording of the G-20 communique last month. He said that the administration's goal was to make trade more fair and was not aimed at erecting protectionist barriers.

Mnuchin was also asked about the administration's tax plan, which Trump said Friday would be unveiled next Wednesday. He did not provide details of the tax plan, which Trump has said would provide a "massive" tax cut for Americans.

The spring IMF and World Bank meetings took place against the backdrop of an improving global economy, helped by better performances in the United States and China, and in a rise in commodity prices which has helped many developing nations. The IMF's latest economic forecast projects global growth of 3.5 percent this year, which would be the fastest pace in five years and up from 3.1 percent last year.

Despite the brighter outlook, the IMF's closing communique warned of a number of risks ranging from weak productivity growth to high debt levels and "heightened political and policy uncertainties."

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