IMF says building ‘peer pressure’ to follow trade rules

WASHINGTON, Oct 20 (AFP): With trade tensions undermining confidence and global growth, economic leaders are increasingly pushing each other to fix the shortcomings that fueled the disputes, IMF chief Kristalina Georgieva said Saturday.

As the United States and China remain engulfed in a massive tariff battle and with Brexit turmoil continuing on Saturday, trade overshadowed the discussions of finance officials gathered for the annual meetings of the International Monetary Fund and World Bank.

Trade is typically an engine of economic growth. But the current disputes have created uncertainty and growth in international commerce has come to a virtual standstill, Georgieva said, noting that problems go beyond bilateral disagreements and extend to outdated trade rules.

"We need to look into what are the reasons we are not making more progress on trade and they are not just the relations between US and China," Georgieva told reporters.

Among finance officials there was an understanding on "what are the issues that need to be addressed and building more, if you wish, peer pressure for everybody to play by the trade rule book." The IMF projects the US-China trade dispute could shave $700 billion off the global economy by next year, mostly by undercutting confidence and freezing business investment.