Fierce arguments anticipated at WB-IMF Spring Meeting

Tuesday, 2018-04-17 12:43:58
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International Monetary Fund chief Christine Lagarde said governments "need to steer clear of protectionism in all its forms."(Photo:Reuters)
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NDO – The Spring Meeting of the World Bank (WB) and the International Monetary Fund (IMF) has been officially opened in Washington DC, USA and will run until April 24. The topics covered at conference usually focus on discussions of the global issues concerning the economy, finance, employment, and the environment, among others. However, in the current context of profound disagreements on many issues between the US, China, and Russia, analysts forecast that this year’s spring meeting will present something of an imbroglio due to the arguments related to trade conflicts, currency, and economic sanctions among nations.

The WB-IMF Spring Meeting takes place as economic conflicts, especially trade conflicts, have been increasing significantly over recent days. The contradictions mainly stem from the constant blows dealt by US President Donald Trump’s administration to its partners, and there are no exceptions to its traditional allies, such as the European Union (EU), Japan, and the Republic of Korea (ROK). The US’s protectionist policies have been enforced in an increasingly tough manner for more than a year since President Trump came into power. With a slogan of “America First”, the White House leader withdrew the US from the Trans-Pacific Partnership (TPP). The United States is also negotiating a free trade agreement (FTA) with RoK and is negotiating the North American Free Trade Agreement with Canada and Mexico. All these moves are aimed at restoring the domestic economy, dealing with the countries Trump sees as “stealing American jobs,” and addressing the trade deficit.

However, the story about the US’s trade protectionism doesn’t stop there. By the end of March, the US announced its decision to impose import tariffs of 25% and 10% on steel and aluminum products, respectively, from China and other trade partners, including the EU. The European leaders have warned of retaliation if the US puts up barriers to their goods. The trade policy under the slogan of “America First” is also pushing the US closer to a trade war with China.

Not limiting itself to the field of import tariffs, the US’s trade war is also expanding into the monetary sector, as China, Germany, Japan, the ROK, and Switzerland have been included by the US Department of the Treasury on the list of countries with “inappropriate currency policies”, as said by Washington, and need to be monitored. On April 13, India was also added to the US department’s Monitoring List.

As for another power, Russia, in addition to the import tax issue, the contentiousness of its relationship with the US is growing as a result of the Trump administration’s economic sanctions aimed at Moscow concerning the wars in Ukraine and Syria. US Ambassador to the UN Nikki Haley reported on April 15 that the US is preparing new sanctions against Russia. With regard to the disagreements among major powers on the war in Syria, analysts have warned that the war reflects the efforts made by Western nations to determinedly maintain the old order, and that the world is facing the risk of a new Cold War between many major powers.

As the disagreements between the US and other powers are proceeding seriously, analysts stated that, despite being the host country, the US will be on the receiving end of numerous criticisms from its trade partners at this year’s WB-IMF Spring Meeting. The conference will not simply be a platform for discussing the common development issues of countries, but it is also a forum for conveying the worrisome messages about the possible collapse of the current global commercial system.

In her speech delivered ahead of the Spring Meeting last weekend, IMF Managing Director Christine Lagarde warned that “the system of rules and shared responsibility is now in danger of being torn apart.” The IMF chief urged governments to stay away from trade protectionism in all forms. This will certainly be an important message sent by the IMF to the 2018 WB-IMF Spring Meeting, as well as to the Washington administration.