The International Monetary Fund on Wednesday urged leaders of the Group of 20 major economies to avoid “myopic” nationalistic policies and to work together in agreed forums to resolve their trade and economic differences.
In a pointed message before U.S. President Donald Trump’s first G20 summit in Hamburg, Germany on Friday and Saturday, the IMF said in an economic briefing note to the leaders that a rules-based and open trading system was vital for world prosperity.
The IMF said myopic pursuit of zero-sum policies can only end by hurting all countries, as history shows.
The IMF said because national policies inevitably interact in a number of vital areas, creating strong spillages across countries, the world economy works far better for all when policymakers engage in regular dialogue.
The IMF’s pitch to maintain multilateral cooperation came as the Trump administration is considering imposing broad new steel tariffs or quotas based on national security grounds, a move that has not occurred since the World Trade Organisation was launched in 1995.
The U.S. Commerce Department is expected to wait until after the G20 summit on Friday and Saturday to issue its review of the steel industry’s national security implications, part of an effort to persuade China and other countries to cut excess capacity in the sector.
It is working on a similar report on the U.S. aluminium industry, also invoking provisions of a 1962 U.S. trade law.
The IMF also said that while the global economic recovery remains on track, with growth this year and 2018 in the 3.5 per cent range, its forecasts do not include a major trade disruption.