The United States, which was dealt a trade policy slap-down at a G20 summit, pushed its ideas too fast at a time when the mood for co-operation has waned, the IMF chief said Saturday. The Group of 20 summit knocked back US proposals for binding targets to address global trade imbalances, and on Friday produced a watered-down statement that put no pressure on China to adjust the value of the yuan.
"The United States tried to push an idea too fast, at a time when the foundation for co-operation is not as strong as it was during the crisis" that shook the world economy in 2008-09, said IMF chief Dominique Strauss-Kahn. The sense of unity displayed as the economic crisis unfolded, when nations came together to protect the global economy, has diminished during the recovery phase, the fund's managing director told AFP.
"There was a risk... that everything would disintegrate and that the very point of the existence of the G20 would eventually vanish. That has not been the case, but don't expect the whole world to play a team game." Strauss-Kahn, speaking on the sidelines of an Asia-Pacific Economic Co-operation forum summit in Japan, said debate sometimes came across as a conflict, but that it was in fact a healthy process.
"The Americans will continue to make proposals. Anyway, it's helpful because we need the debate to take place," he said. "If everyone doesn't agree then it can appear to be a conflict. But that's how ideas are put forward. So I'm not sure we need anyone to be more cautious, but we should not expect the debate to be concluded at once."
On the tit-for-tat allegations between the US and China which accuse each other of manipulating their currencies to make exports more attractive, Strauss-Kahn noted that "everyone thinks that others should make more effort than oneself".
"The Chinese are making efforts to move their central growth engine towards a model that is less focused on exports and more on domestic demand. It will not happen in five minutes but it must be done as soon as possible," he said.
"On the other hand, it is also necessary for the developed countries to make efforts to modify their own deficits. Everyone has their job to do at home."
Strauss-Kahn said the G20 leaders "understand very well on an intellectual level that there can be no individual actions" but that the international community "must learn to work together again". He said that this spirit of co-operation may not be revived until "two, three, four more G20s have been held". The G20 has now met five times since the grouping held inaugural crisis talks in November 2008 in Washington.
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