WASHINGTON – Treasury Secretary Jacob Lew said Monday that Americans have reaped significant benefits from the international architecture put in place after World War II and the United States would be making a serious mistake to retreat from its global leadership role.
In a speech before the Council on Foreign Relations, Lew sought to counter arguments being advanced by Donald Trump and other Republican presidential candidates that Americans are losing badly in competition with China and other countries in the global economy.
Lew said that the United States needs to embrace new players on the global economic stage and make sure they meet the standards of the trading system that the country helped create.
“The worst possible outcome would be to step away from our leadership role and let others fill in behind us,” he said.
Lew’s comments came in advance of global finance meetings later this week. Lew and Federal Reserve Secretary Janet Yellen will hold discussions with the Group of 20 major economies on Friday in advance of the spring meetings of the International Monetary Fund and the World Bank.
Yellen was scheduled to meet later Monday at the White House with President Barack Obama to give the president an update on the U.S. and global economy. The administration said that Yellen and Obama would also discuss progress made in implementing Wall Street reform measures passed after the 2008 financial crisis.
Lew never referred to Trump or other GOP critics by name. But he asserted that America’s participation in the global trading system and its support for organizations such as the IMF had reaped significant benefits for U.S. workers.
“The rules-based system was a major reason that the global financial crisis never turned into a second Great Depression,” Lew said. “The United States and other nations were able to co-ordinate efforts through the G-20 and the IMF to avoid the downward spiral of protectionism and predatory macroeconomic policies that characterized previous eras.”
Going forward, Lew said the administration would be working with U.S. allies to further modernize the IMF to improve its oversight of the way nations manage their exchange rate policies and trade balances.
“The IMF should continue to promote greater transparency among its members when it comes to economic data, especially as it relates to foreign reserves,” Lew added.
Lew did not single out any countries. But the United States has been pushing for years for China to do more to allow its currency’s value to be set by market forces. American manufacturers contend the Chinese yuan is still significantly undervalued, which gives it unfair advantages in competing with American companies.
When taking questions, Lew was asked about U.S. presidential candidates’ extensive attacks on globalization and whether trade liberalization has led to lost American jobs.
“People have legitimate worries about an economy that for decades now has not provided the kind of opportunity for them and their families that they have a right to expect,” he said.
Lew said it was important to address the root problems by providing better educational opportunities so workers have the tools needed to compete in a global economy.