US should not surrender global economic leadership

US Treasury Secretary Jacob Lew called Monday for the US to maintain its global economic leadership and not cede it to others like China in a tide of protectionist sentiment.

With some US presidential candidates advocating a pullback from the post-World War II Bretton Woods structure that rebuilt the global economic structure guided by the World Bank and International Monetary Fund, Lew said the next administration needs to remain committed to those principles.

"If we want it to work for the American people, we need to embrace new players on the global economic stage and make sure they meet the standards of the system we created," he said in a speech at the Council on Foreign Relations.

"The worst possible outcome would be to step away from our leadership role and let others fill in behind us."

Lew argued that the Bretton Woods system, with its focus on increasing cooperation on trade and financial regulation and on fighting poverty, had underpinned a quadrupling of world per capita income since 1950.

"American leadership was essential to the creation of that system and the progress it yielded," he said.

In recent years, the system made possible rapid response through the IMF and World Bank to the Ebola crisis in West Africa and the economic and political crisis in Ukraine.

It also helped make effective US sanctions on Iran, Russia and North Korea, Lew argued.

The administration of President Barack Obama, now in its final year, has faced persistent resistance in Congress to support for the IMF, cooperation with China, and to two Obama-driven international trade treaties, one spanning the Pacific and another cross-Atlantic deal with the European Union.

A number the current candidates to replace Obama, led by Republican hopeful Donald Trump, have campaigned on opposition to the trade deals and putting up more barriers to foreign competitors.

Lew argued that the global system does better when the United States is leading, and that institutions like the World Bank and IMF "amplify US influence on the global stage."

In addition, he added, the United States and China, the two largest economies, "have a unique responsibility to work together to advance shared prosperity, maintain a constructive global economic order, and make progress on critical challenges like climate change."
Source:AFP