The member states of the International Monetary Fund (IMF) pledged on Saturday to work to reduce the global imbalance but failed to repeat their pledge in the past to resist all forms of trade protection.
The Fund’s Finance Committee, the IMF’s policy guidance body, also reiterated its earlier commitments on exchange rates.
“We will refrain from competitive currency cuts and we will not target our exchange rates for competitive purposes,” she said. “We will also work together to reduce the excessive global imbalance through appropriate policies.
The statement largely adopted the tone of a statement issued by the G20 last month in Baden-Baden, Germany, where US Treasury Secretary Stephen Menuchin said the pledge to fight trade protection was no longer right.
Augustine Carstens, governor of the Central Bank of Mexico, who chairs the IMF’s steering committee, said protectionism was “relative” and “vague.”
“No country has no texts on trade.
“Instead of talking too long about what this concept means, we have been able to put it in a more positive and constructive context.”
Carstens is one of the world’s leading financial officials attending the spring meetings of the International Monetary Fund (IMF) and the World Bank this week.
The aim was to benefit from trade and all members were “biased” by the need for a free and fair trade.
Although the global economic recovery is gaining momentum, growth is “still modest” and warned of growing political uncertainty, said the IMF Finance Committee statement.