IMF's Christine Lagarde downplays differences with Trump White House

World finance leaders are gathering on US President Donald Trump's home turf to try to nudge his still-evolving policies away from protectionism and show broad support for open trade and global integration.
Lagarde (above) acknowledged discontent over globalisation and the political winds it has whipped up in recent years.
Lagarde (above) acknowledged discontent over globalisation and the political winds it has whipped up in recent years.PHOTO: REUTERS

WASHINGTON (AFP) - The head of the International Monetary Fund on Thursday (April 20) downplayed differences with the new Trump administration over free trade, kicking off semi-annual meetings amid signs of friction with the White House.

"From the various contacts that I have had with the administration so far, I have every reason to believe we will make progress," IMF managing director Christine Lagarde told reporters.

With its 189 members gathering in Washington this week, the fund faces the unusual challenge of a US government now noisily at odds with some of the IMF's most important positions, including trade liberalisation, financial regulation and climate change.

US Commerce Secretary Wilbur Ross this week dismissed some IMF concerns as "rubbish."

Washington has also called on the fund to pay closer attention to member countries' efforts to affect exchange rates and other imbalances that harm the United States.

Lagarde said on Thursday that the fund would press for "a fair and level playing field," adding that that meant "no use of distortive measures, no protectionist measures going forward."

But she also used the occasion to renew her organisation's warnings against the lure of protectionism while hailing the global economy's improving outlook.

The fund this week bumped up its forecasts for global growth slightly to 3.5 per cent for this year, a rare upward revision reflecting a rosier view of conditions in Asia and Europe.

"The IMF is not a trade organisation, but we are concerned about trade because it has been a major engine for growth," Lagarde said.

The fund has had to contend with rising political currents on both sides of the Atlantic that threaten to upend the prevailing international order on trade.

Major candidates in elections due to be held in France this weekend are opposed to trade integration and US President Donald Trump has vowed to renegotiate or exit from the North American Free Trade Agreement.

In her opening remarks, Lagarde acknowledged the discontents of globalisation and the political winds it has whipped up in recent years, saying the fund would press for policies that make growth more equitable.

"We need to make sure that this momentum is sustained and that we continue to have that growth and, more importantly, that that growth is shared more equitably," Lagarde said.

That includes fairer taxation, job training assistance and infrastructure investment as well as forward-looking measures to address unsustainable debt and pension schemes, she said.

"All countries, of course, should guard against what I have called the self-inflicted wounds, such as restrictions, subsidies and other trade distortions that reduce competition and economic openness," Lagarde said.

"We are very pleased to see that trade is picking up. Is trade going to continue to increase and grow? We do so think so," she added.

"Is there room to improve that? Of course."