In previous posts and comments on this Blog, it was underlined by many that, on the issue of currency manipulation, international trade law cannot be seen in "clinical isolation" from the role of the International Monetary Fund (IMF). Article XV of GATT 1994 makes this clinical isolation difficult and it is not obvious that the definition of a subsidy in the SCM Agreement can do the job alone . It seems by now that this connection has became clear for policy makers.
Here are some significant excerpts from a statement delivered by U.S. Treasury Secretary Henry Paulson in Washington April 14 at the spring meeting of the IMF and World Bank:
"For the IMF to remain modern and relevant, it must re-invent itself,"
"For us, reform of the IMF's foreign exchange surveillance is the linchpin on which other reforms depend, and we look forward to action in this important area very soon after these meetings,"
"IMF staff must do a better job in addressing foreign exchange surveillance on a day-to-day basis."
Finally, and this may please emerging nations, Paulson said the IMF's modernization process also must involve a complete overhaul of its structure of governance, with a greater role for developing nations:
"The fund no longer looks like the world economy in which we live, and marginal reforms that do not fundamentally alter relative quota shares are insufficient - bold action is needed to boost the share of dynamic emerging market countries."