WASHINGTON — The head of the International Monetary Fund (IMF), Christine Lagarde, said on Tuesday that politicians who campaigned on promises of protectionism and economic barriers were a threat to global trade.
“There is a growing risk of politicians seeking office by promising to ‘get tough’ with foreign trade partners through punitive tariffs or other restrictions on trade,” Lagarde said, according to prepared remarks.
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Both US presidential nominees Donald Trump and Hillary Clinton have announced their opposition to the Trans-Pacific Partnership, the Obama administration’s signature Pacific trade deal.
Trump has proposed big tariffs on Chinese goods and denounced free-trade agreements between the US, Canada and Mexico. British voters this year also chose to secede from the EU.
In remarks she was due to deliver in an address in Toronto, Lagarde said she was “deeply concerned”. Without naming any candidate, she described an antitrade political climate, noting that the growth rate for global trade stood at 2%.
Prospects for US ratification of the Trans-Pacific Partnership in 2016 appear slim, with US legislators casting doubt that it will receive substantial backing or come to a vote.
“Against this background, recent news about multilateral trade negotiations have been quite discouraging,” Lagarde said, adding that trade reforms could regain momentum “if the benefits are properly explained”. Trade, she said, resulted in more competitive industries, greater innovation and lower prices for consumers.