IMF urges G20 leaders to avoid 'myopic' trade policies

Rules-based and open trading system was vital for world prosperity, IMF added

The International Monetary Fund on Wednesday urged leaders of the Group of 20 major economies to avoid "myopic" nationalistic policies and to work together in agreed forums to resolve their trade and economic differences.

In a pointed message before US President Donald Trump's first G20 summit in Hamburg, Germany later this week, the IMF said in an economic briefing note to the leaders that a rules-based and open trading system was vital for world prosperity.

"Myopic pursuit of zero-sum policies can only end by hurting all countries, as history shows," the IMF said. "Because national policies inevitably interact in a number of vital areas, creating strong spillovers across countries, the world economy works far better for all when policymakers engage in regular dialogue and work within agreed mechanisms to resolve disagreement."

The IMF's pitch to maintain multilateral cooperation comes as the Trump administration is considering imposing broad new steel tariffs or quotas based on national security grounds, a move that has not occurred since the World Trade Organization was launched in 1995.

The US Commerce Department is expected to wait until after the G20 summit this Friday and Saturday to issue its review of the steel industry's national security implications, part of an effort to persuade China and other countries to cut excess capacity in the sector. It is working on a similar report on the US aluminum industry, also invoking provisions of a 1962 US trade law.

The IMF also said that while the global economic recovery remains on track, with growth this year and next year in the 3.5 percent range, its forecasts do not include a major trade disruption.