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IMF drops pledge against protectionism

WASHINGTON International Monetary Fund (IMF) members dropped a pledge to fight protectionism amid a split over trade policy and turned their attention to another looming threat to global economic integration: The first round of France's presidential election.

Concerns that far-right leader Marine Le Pen and far-left rival Jean-Luc Melenchon, both critics of the European Union, could top the field added to nervousness over US trade policy at the IMF and World Bank spring meetings.

"There was a clear recognition in the room that we have probably moved from high financial and economic risks to more geopolitical risks," IMF managing director Christine Lagarde told a news conference.

UPHEAVAL

Ms Lagarde, a former French finance minister who has warned that a Le Pen presidency could lead to political and economic upheaval, said that a policy shift from "growth momentum to more sharing and inclusive growth" was now needed.

A communique from the IMF's steering committee on Saturday dropped an anti-protectionism pledge, adopting language from the Group of 20 nations that the Trump administration sought last month in Germany as it develops a strategy to slash US trade deficits.

Earlier in the week, the IMF had warned that protectionist policies that restrict trade could choke off improving global growth.

Instead, the International Monetary and Financial Committee (IMFC) statement pledged that members would "work together" to reduce global trade and current account imbalances "through appropriate policies".

Mexican central bank chief Agustin Carstens, the IMFC chairman, said most countries have some trade restrictions and that protectionism was an "ambiguous" term.

- REUTERS

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