April 21, 2018 / 4:10 AM / 3 months ago

IMF must better police external imbalances: Treasury's Mnuchin

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Friday that the International Monetary Fund needed to “step up to the plate” to police large external imbalances, demand the dismantling of trade barriers and protection of intellectual property rights.

Secretary of the Treasury Steve Mnuchin testifies before the House Committee on Appropriations on Capitol Hill in Washington, U.S., April 11, 2018. REUTERS/Aaron P. Bernstein

In a statement to the IMF’s steering committee, which meets on Saturday, Mnuchin said countries which have large and persistent external surpluses must do more to carry their share of the adjustment.

“The IMF must step up to the plate on this issue, providing a more robust voice and consistently noting when members maintain macroeconomic, foreign exchange, and trade policies that facilitate unfair competitive advantage or lead to imbalanced growth,” Mnuchin said.

The statement reflects the Trump administration’s view that the IMF, through its country surveillance and policy advocacy efforts, can help rein in what are seen as China’s trade abuses.

The inclusion of a reference to intellectual property follows U.S. threats to impose tariffs on imported Chinese goods over allegations that Beijing has misappropriated American intellectual property through various industrial policies, including joint venture requirements for foreign firms.

“We strongly believe that unfair global trade practices impede stronger U.S. and global growth, acting as a persistent drag on the global economy,” Mnuchin said. “Ensuring that trade is free, fair, and reciprocal will boost global trade and support stronger, more sustainable growth.”

Mnuchin said the Trump administration welcomes the IMF’s efforts to improve the External Sector Report, the IMF’s assessment of currency valuations.

“At the same time, we urge the IMF to speak out more forcefully on the issue of external imbalances, including by providing clear policy recommendations for countries with large surpluses, in support of more balanced global growth,” Mnuchin added.

Reporting by David Lawder; Editing by Shri Navaratnam

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