WSJ : At the IMF, Germany Comes Under Pressure to Stimulate Growth The IMF, back

At the IMF, Germany Comes Under Pressure to Stimulate Growth
The IMF, backed by the U.S., has pressed Germany and others with budget surpluses to cut taxes or raise spending to prop up growth

With the global economy slowing and showing signs it may need support, economists are pointing fingers at Germany and a few other countries that are in a position to provide a lot of stimulus but are choosing not to.

What stimulus measures policy makers can use to support their flagging economies has been a key issue during weekend meetings at the International Monetary Fund in Washington. In its annual report on global fiscal policies, the IMF singled out Germany, Korea and Australia as places where fiscal stimulus could makes sense. Earlier this month, the IMF called on Switzerland to ramp up public spending.

The IMF, backed by the U.S., has pressed Germany and others with budget surpluses to cut taxes or raise spending to prop up growth. Countries with budget surpluses “should certainly make use of it and have the space to invest and to participate in the economic development and growth,” IMF Managing Director Christine Lagarde said, “but not enough has been done on that front.”

Treasury Secretary Steven Mnuchin said he agreed with the IMF’s stance on surplus countries such as Germany. The U.S. is now running large deficits.

The idea behind debt-financed stimulus is that when economies are weak, governments substitute for a lack of private demand through spending or tax cuts. In times of intense stress such as the global financial crisis a decade ago, economists agree that governments should do all they can to prop up growth.

But using large-scale fiscal stimulus to address an economic soft patch has met with resistance from countries like Germany that run a conservative economic policy.

Germany’s finance minister Olaf Scholz fired back at criticisms, pointing to increased public investment, reduced taxes and higher support for low-income families.

“It would be a very nice service if you could tell the rest of the world that they are demanding something we already did,” he said to a reporter at a press conference Friday. Germany’s stable finances put it in a better position to respond to the next recession, he said, and the current global risks aren’t Germany’s finances but rather “man-made” ones including Brexit and trade disputes.


Korea runs an annual budget surplus and Australia is expected to swing to a surplus in the coming years. Unlike Europe, these economies don’t appear to be in need of much stimulus, and their central banks have scope to cut interest rates if needed.

Germany and Switzerland are using annual surpluses to cut debt and prepare for expected budget strains from future retirees. Germany’s position is the most relevant among surplus countries given its dominant role in European growth and politics. If Germany were to launch a big stimulus program, it could encourage deficit countries like France and Italy to ease off measures to bring their budgets closer to balance. European rules set a ceiling on deficits of 3% of gross domestic product, though exceptions are made in times of stress. The U.S. has no such limit.

Germany’s export-dependent economy contracted in the third quarter of last year and was flat in the fourth. A string of weak manufacturing figures suggests it could contract again in the first half of this year. That soft patch will affect the 19-member eurozone, where Germany is the biggest member, and ripple across non-euro countries like Switzerland that rely on Europe for exports.

China’s economic slowdown “has hit the Germany economy hard, and there is a good case for using fiscal policy to smooth [the] adjustment,” said Ken Rogoff, professor at Harvard University, noting Germany’s “huge latitude” from its low public debt, which equals less than 60% of gross domestic product and could shrink to less than 50% by 2022 according to IMF estimates.

Germany has run annual surpluses since 2014 and is expected to do so through 2024, according to the IMF. Tax revenues have increased 8% since 2017, faster than welfare spending, and working Germans today pay the second highest level of income tax of all members of the Organization for Economic Cooperation and Development, behind only Belgium.

The U.S. position is in stark contrast to Germany’s despite facing similar problems with old-age spending. The government has pumped the U.S. economy with tax cuts and higher spending with the aim of generating 3% annual GDP growth rates. Annual deficits are over 4% of GDP.

The hope is that by expanding the size of the economy, the U.S. will be in a better position to service its debt down the road. The usual side effects of stimulus—higher bond yields and rising inflation—have failed to materialize, strengthening the argument of the stimulus camp and weakening Germany’s view that it’s best to keep the powder dry for the next recession.

Germany is “currently learning the hard way that they are the only country around playing according to these rules,” said Carsten Brzeski, an economist at ING Bank.

WSJ : Deutsche Bank-Commerzbank Deal May Rest on a Mountain of ‘Badwill’ The com

Deutsche Bank-Commerzbank Deal May Rest on a Mountain of ‘Badwill’
The combined bank could recognize a profit of more than $18 billion using an obscure accounting method

German banking giant Deutsche Bank AG DB 2.62% will likely depend on an obscure but valuable accounting quirk to make a deal for smaller rival Commerzbank AG CRZBY 2.92% workable.

Deutsche Bank has told investors and others close to the bank that it hopes European Central Bank supervisors will allow wide latitude to use the accounting treatment—known as negative goodwill, or “badwill”—as part of a takeover, people familiar with the talks said.

The two banks have been in formal talks since March over a potential merger, spurred on by the German government. There is no guarantee a deal will happen. Both banks are viewed skeptically by investors and trade at deep discounts to their book value, reflecting poor profits and lingering doubts about the quality of some assets.

A combined bank could recognize a onetime profit of more than €16 billion, or more than $18 billion, using badwill, according to analyst estimates. That profit would be crucial for maintaining the combined entity’s capital ratios, which regulators are likely to increase as a condition of approving a deal.

The badwill number could vary greatly depending on the valuation paid for Commerzbank. It could also shrink if Deutsche Bank, after it executes a deal, decides Commerzbank’s assets are worth less than their current book value. The less badwill that is generated, the more fresh capital from shareholders could be needed.

Deutsche Bank shareholders, who since 2008 have injected more than €30 billion of capital into the bank, are resistant to put in much more. Even with a hefty badwill gain, the combined bank will need fresh cash to lay off employees and close unwanted operations. Asset disposals—such as selling Deutsche Bank’s asset management arm DWS, or Commerzbank’s Polish operations known as mBank—could also be used to raise cash.


“This is not free money that can be used to fund restructuring costs or clean up the balance sheet or return to shareholders,” Jeremy Sigee, analyst at Exane BNP Paribas , wrote in a recent note. “Every penny of it is needed to keep the regulatory capital ratios where they started.”

Badwill lets buyers book a profit if they buy a target for less than net-asset value, or book value, which is the difference between a firm’s assets and liabilities. If a target company is sold for less than its stated book value, then the buyer can treat the difference as a gain.

It doesn’t happen often because buyers normally pay more than a company’s book value. In those cases, the excess paid is recorded as an asset called goodwill, or the value of the intangible bits that may have inspired the deal in the first place, such as the target firm’s brand value.

In Commerzbank’s case, the shares trade at about a third of book value, so even at a hefty premium to the share price, Deutsche Bank will pay far less than book value.


The shares that Deutsche would likely issue to Commerzbank shareholders to pay for the deal, plus the badwill gain, would add up to roughly the amount of equity that Deutsche Bank needs to support the Commerzbank assets it takes onto its balance sheet, according to analyst estimates.

The ECB is also expected to increase the enlarged bank’s minimum required capital to protect against integration and restructuring risks, and because the lender will become more systemically important—it would be the second largest in the eurozone by assets after BNP Paribas.

There are roadblocks to booking badwill profits. For one, Deutsche Bank will have to review the valuation of Commerzbank’s assets and some may have to be marked down. That would cut into the combined group’s final gain.

Jon Peace, a Credit Suisse analyst, thinks even after large badwill gains, Deutsche will need to raise about €8 billion in fresh capital from shareholders. This money could fund about €5 billion of restructuring costs and an estimated €3 billion in write-downs to the value of bonds owned by Commerzbank, many of which are Italian government bonds that currently aren’t marked to market, but held at historic cost.

“If Deutsche wants to pay for some of its restructuring costs up front, it still needs to raise capital,” Mr. Peace said.

Regulators keep a close eye on badwill calculations, and it will be up to the ECB to determine the amount of badwill to include in the bank’s capital ratios. Recent European bank acquisitions have taken advantage of this accounting tool, but involved gains in the hundreds of millions of euros.

Not every cheap bank takeover generates badwill. When Spain’s Bankia SA took over Banco Mare Nostrum SA in 2017, it appeared as if the deal would bring in €1.2 billion of badwill. But after Bankia revalued the books, a mixture of asset write-downs and liability increases erased all of that.

In 2008, U.K.’s Lloyds Banking Group PLC generated £11.2 billion of badwill gains from its takeover of mortgage lender HBOS PLC. But the deal turned out to be disastrous because HBOS’s loan book was much worse than thought. The badwill profits, booked in 2009, were more than wiped out by nearly £17 billion in impairments on bad loans and the group was bailed out by the government.

WSJ : Publicis Agrees to Acquire Alliance Data’s Epsilon Unit for About $4.4 Bil

Publicis Agrees to Acquire Alliance Data’s Epsilon Unit for About $4.4 Billion
Deal for marketing-services business would give Publicis access to more consumer data

French advertising giant Publicis PUBGY 1.03% Groupe SA has agreed to acquire Alliance Data Systems Corp.’s ADS 2.95% marketing-services business for $4.4 billion.

News that the companies were near a deal for the business—known as Epsilon—that works with advertisers on loyalty and email-marketing programs, was reported by The Wall Street Journal on Saturday.

The move gives Publicis access to more consumer data and help modernize its business at a time when advertising holding companies are under pressure to become less dependent on traditional functions like crafting TV commercials and print ads, which have waned as new digital marketing has surged.

One of the world’s largest ad companies, Publicis owns agencies such as Saatchi & Saatchi, Leo Burnett and Publicis Media. Its firms work on behalf of companies such as Samsung Electronics Co., General Motors Co. and Procter & Gamble Co.

Late last year, Alliance Data said it was exploring a sale of its Epsilon business, which had $2.18 billion in revenue in 2018, and that proceeds of any deal would be used to reduce debt and return capital to shareholders through stock buybacks or dividends. Epsilon has more than 8,000 employees in 70 offices around the world.

Alliance said in a release Sunday that it plans to use the net proceeds of $3.5 billion from the deal to buy back shares and pay down debt.

The deal is the largest acquisition Publicis has made since being founded in 1926. It is the first major purchase by Chief Executive Arthur Sadoun, who took the reins in 2017, replacing long-time CEO Maurice Lévy.

The deal comes as Madison Avenue faces challenges brought on by the rise of digital advertising and the growing power of Alphabet Inc.’s Google and Facebook Inc. The sector has also been dented by marketers taking more of their ad functions in-house as well as new entrants including consulting firms like Accenture PLC.

Shares of Publicis have dropped more than 15% over the past year.

Publicis, along with its rivals, has reorganized its operations and shed less-profitable businesses. It shelled out $3.7 billion to buy U.S. consultancy Sapient in 2015, as part of an effort to transform itself into a digital tech company.

Ad giants have long used their size and purchasing power to negotiate the best prices for their clients. But the rise of digital marketing has upended the business and made consumer data a critical ingredient in marketing and advertising.

Customer information helps marketers and agencies craft relevant ads for consumers, target those messages at the right people and measure their effectiveness. Without access to large amounts of data, agencies and marketers have to rely more heavily on the tech giants, which tend not to share much consumer data with advertisers.

Alliance Data bought Epsilon in 2004 to help it expand into loyalty-marketing services and bolster its private-label credit-card business. Its Conversant division, bought for $2.3 billion in 2014, helps brands match consumer’s offline and online behavior.

FT : Apple seeks up to $27bn in legal battle with Qualcomm US court case between

Apple seeks up to $27bn in legal battle with Qualcomm
US court case between iPhone maker and chip supplier over chip royalties set to begin

About $30bn will be at stake in what could be one of the biggest US corporate lawsuits as Apple and Qualcomm, the chip company, head to court in San Diego on Monday.

Tim Cook, the Apple chief executive, is expected to give testimony in a four-week trial in a federal court in which the iPhone maker and four companies in its supply chain are suing Qualcomm for up to $27bn in damages for overcharged chip royalties. 

Qualcomm, which has denied wrongdoing, is seeking at least $7bn in back-payments from Apple and its suppliers in addition to billions in damages. 

“This is a huge dispute. The amount of money at stake potentially dwarfs any other intellectual property or antitrust case,” said Mark Lemley, a law professor at Stanford University. By comparison, Apple won $1bn from Samsung in a patent case in 2012, and Hewlett-Packard won $3bn from Oracle in a contract case in 2016. 

The San Diego trial is the centrepiece of a lengthy dispute between the two companies that has sprawled across the US, China and Europe and may affect Apple’s ability to launch a mobile phone equipped for 5G, the next generation of mobile internet. 

“This is by far the most significant [case] we’ve seen so far, for both sides,” said Geoff Blaber, analyst at CCS Insight. For Qualcomm, it “stands to shape the future of their business”, but it could also weaken Apple’s “bargaining power” and cost the iPhone maker billions. 

The dispute began in 2017 after Apple told its manufacturers — who paid Qualcomm royalties and were reimbursed by Apple — to stop paying the chipmaker, on grounds that prices were too high.

Apple and its suppliers argued that Qualcomm overcharged for royalties since 2013 and that the high fees on each phone containing its chips represented anti-competitive gouging. 

Apple is also seeking $1bn in rebates it says Qualcomm withheld after a series of competition regulators opened investigations into its business model, and about $2bn in restitution for royalties.

The outcome of the trial is particularly significant for Qualcomm’s licensing business, which generated 64 per cent of the company’s total earnings before tax in 2018 on less than a quarter of total sales. 

If the case tips in Apple’s favour, other Qualcomm licensees are likely to question the rates they are paying, and the “future of the business model” could come under pressure, said Mr Blaber.

Qualcomm’s share price has been volatile since 2016, as investors have grappled with uncertainty and declining licensing revenues prompted by the dispute. Potential damages alone could be more than four times the $5.7bn Qualcomm generated in net income in 2016.

If Apple wins on its licensing claims, that segment of Qualcomm’s business “would remain profitable — just less so”, said Joshua Landau, patent counsel at the Computer and Communications Industry Association. Qualcomm might also face a “short-term hit” from having to repay licence fees.

But there are high stakes for Apple: it may be forced to pay hefty back-payments, while the dispute with Qualcomm has left it reliant on Intel, which has yet to release a 5G chip. If Apple’s 5G iPhone is delayed beyond its planned 2020 release, it may fall further behind in China in particular.

Depending on which way the case appears to be moving, there may be “increasing pressure on Apple to settle”, said Mr Blaber.

Apple declined to comment on the date by which it would need to have changed chip suppliers to include their hardware in phones released in 2020. The industry standard is around 10 to 12 months ahead of commercial launch.

As the number one patent licenser by revenue worldwide, some of Qualcomm’s cellular IP is included in chips made by its rivals — which phonemakers must pay for. 

A win for Apple in San Diego could make it easier and cheaper to license Qualcomm’s technology and have a “pro-competitive impact on the industry as a whole”, said Mr Landau. That would be a boost to Apple if it wanted to design its own chips.

In a related case, which is awaiting a judge’s ruling, the US Federal Trade Commission has alleged that Qualcomm unfairly forced Apple to buy its wireless chips between 2011 and 2016 in return for charging lower royalty payments.

Judge Lucy Koh’s ruling could influence the judge and jury in San Diego if she reaches a verdict first. There is no guarantee such a ruling will come in time, however. While Judge Koh said she was “generally fairly fast”, a case of “this magnitude obviously is going to take longer than your average law and motion matter”.

FT : Finance ministers say global growth will ‘firm up’ Spring meetings of IMF a

Finance ministers say global growth will ‘firm up’
Spring meetings of IMF and World Bank conclude on more positive note for economy

Finance ministers and central bank governors finished the spring meetings of the IMF in a more positive mood, saying that global growth was likely to “firm up” in coming months, leading to an improved outlook in 2020.

Having started the week with downgrades to forecasts for the global economy, the closing communique reflected a pervasive view of ministers that the fund had been a little too gloomy in its prognosis.

The ministers and central bank governors on the IMF’s governing body stressed that there remained significant risks for growth from trade tensions, a lack of clear tools to deal with any downturn that might arise and potential shocks such as Brexit, but still expected the economic data to improve.

Financial markets have been much more positive about the global outlook, sensing an easing in trade tensions and a low probability of a disruptive Brexit, and it is beginning to be reflected in economic data, such as positive surprises in European industrial output.

Christine Lagarde, managing director of the IMF, said the global economic situation remained “delicate”, but would improve if countries “do the right thing” and “do no harm”. In saying this, she stressed the importance of resolving US trade tensions with China.

Mario Draghi, president of the European Central Bank, said the risks had not disappeared, but stressed that the threat of a disorderly Brexit had waned and the Chinese stimulus of its economy appeared to be having an effect. He said the eurozone economy was also showing “remarkable resilience” with jobs being created, a strong service sector and incomes and wages rising “almost everywhere, not just in core [eurozone] countries”.

Some close observers of the international economic scene said that the IMF had been too gloomy in its outlook. Angel Ubide, head of economic research for global fixed income at Citadel, said: “The world is in a different place from where it was at the end of last year. The US-China trade conflict is now less of a concern, and the global economy is getting a boost from the U-turn in monetary policy. Tightening is now off the agenda for a long while”.

The Federal Reserve has reversed its previous plans to raise interest rates much further this year, which helped market sentiment that global financial conditions would not tighten more in 2019.

But the Fed’s move to loosen policy following severe pressure from US president Donald Trump raised concerns in the Washington meetings that people would lose confidence that central banks based their decisions on evidence and data rather than having them forced on them by politicians.

As the meetings ended, Mr Draghi said the pressure on the Fed was a concern because it undermined the credibility of central banks, not just in the US, and that could undermine economic performance across the world.

“I am certainly worried about central bank independence in other countries, especially in the [US], the most important jurisdiction in the world,” he said.

FT : US willing to face ‘repercussions’ from China on trade — Mnuchin Mnuchin su

US willing to face ‘repercussions’ from China on trade — Mnuchin
Mnuchin suggests Washington will meet Beijing’s demand for ‘two-way’ enforcement deal

The US is willing to face “repercussions” from China if it fails to comply with the terms of a likely deal to end the trade war between the world’s two largest economies, Steven Mnuchin, the US treasury secretary said, suggesting the US will meet Beijing’s demand for a “two-way” system to enforce the agreement. 

Speaking on Saturday in Washington, Mr Mnuchin said that both the US and China would be making “certain commitments” in the deal that would have to be respected and enforced on both sides of the Pacific Ocean. 

“I would expect that the enforcement mechanism works in both directions, that we expect to honour our commitments, and if we don’t, there should be certain repercussions, and the same way in the other direction,” Mr Mnuchin said. 

Beijing and Washington are now in the final stretch of talks to resolve their trade dispute, with US president Donald Trump saying that he expected to know if an agreement was possible by next month. 

Until now, the discussion over enforcing and implementing a deal has mostly been focused on US demands for a system to ensure that China complies with its pledges in the deal, including promises to purchase more American goods and move towards a more market-based economy. The US has demanded that it be allowed to impose penalties on China unilaterally, and without retaliation, if it finds that Beijing has flouted the deal. 

But Mr Mnuchin’s comments, reported by Bloomberg News, suggest that China also has serious concerns about the US sticking to the agreement. The main US commitment in the deal is expected to be the lifting of existing tariffs on Chinese imports, probably over time and according to a certain schedule — and Beijing may well wonder if Mr Trump will follow through given his unpredictability. Last month, Wang Shouwen, China’s vice-minister of commerce, said that any enforcement mechanism had to be “two-way, fair and equal”. 

In recent days, Mr Mnuchin had already said that “enforcement offices” would be set up both in the US and China to monitor the deal, another indication that some reciprocity would be included on the enforcement side of the agreement.

However, while allowing China to impose punitive measures on the US for failure to comply further narrows the gap between the two sides on the way to a deal, the US administration’s acceptance of this could raise eyebrows in corporate America, since they would likely be on the receiving end of those countermeasures. 

“If such an arrangement were agreed and reciprocal, it would expose US companies to adverse actions by China, which the US would have committed not to challenge in the WTO,” Daniel Price, managing director of Rock Creek Global Advisors, a Washington-based consultancy, and a former senior economic official in the George W Bush administration. “The right unilaterally to retaliate for non-compliance looks a lot different if it’s reciprocal. I can’t imagine the US business community would be enthusiastic about that,” he added.

Although Mr Mnuchin is a key player in the negotiations, the talks are being led by Robert Lighthizer, the US trade representative who is known to hold more hardline views on China. Mr Lighthizer’s office did not immediately respond to a request for comment on whether the US had accepted that the enforcement mechanism would be reciprocal.

Mr Mnuchin said that he expected more conversations over the phone with top Chinese officials in the coming week, to establish whether a new round of face-to-face talks was necessary. The US and China have been negotiating a deal to end their trade war since December, when Mr Trump and Xi Jinping, the Chinese president, struck a truce in the aftermath of the G20 summit in Buenos Aires, Argentina.

Despite multiple rounds of talks, and claims of significant progress by the negotiators, several deadlines to finalise a deal in March and April have slipped, making May or even June the most likely date for an agreement. 

>>> Barrons weekend summary: positive cover story on CVS; positive features on C

Barrons weekend summary: positive cover story on CVS; positive features on CVX, ALC, PINS

* Cover story: CVS plans to expand its HealthHUB locations nationwide, making healthcare simpler and more local, part of the company’s plan to become the “new front door of health care”; Now that it has acquired Aetna, CVS is “deeply entangled in how medicine and care are administered, priced, and paid for, and how the government’s role might change”; Its assets “leave it uniquely well positioned for a future when consumers gain more control over health care, and prices fall. Time to buy the shares.”
* Features: 1) Todd Boehly’s Eldridge Industries has produced everything from annuities through its insurer to a stock it successfully spun off into the market for retail investors—the simple version of his method “is that he builds a box and then puts assets in it”; 2) Positive on Pinterest: Bulletin-board startup has an attractive high-growth business, is close to profitability, and, most important, appears willing to price the deal to sell—a form of restraint that could pay off in a sector where unicorns feel pressure to aggressively price IPOs; 3) Positive on ALC: World’s leading eye-care company, recently spun off from NVS, should be able to improve operations and financial results now that it’s independent, and investors should “raise their sights on the stock” despite its high valuation; 4) Positive on CVX: Wall Street has punished the energy giant for its move to acquire APC, but the logic of the deal makes sense, because Anadarko’s oil assets are in regions where Chevron already has a foothold, and will allow it to gain scale in crucial areas.
* Tech Trader: Positive on EA, ATVI, TTW: So-called loot boxes—treasure chests that gamers either earn through game play or buy with digital currency by spending real money—have long generated billions in high-margin profits for gaming companies, but regulators are taking a closer look, and critics say it’s akin to gambling for young people.
* Trader: The 10-year Treasury yield rose 0.057 percentage point to 2.56% this past week, its highest in nearly a month—a sign the yield curve, which briefly inverted three weeks ago, is no longer signaling a recession, at least for now; Cautious on DIS: Disney is poised for a good year with its core businesses, and the stock could continue to rise, but the long-term outlook is much cloudier; “Maintaining guidance for the full year after a weaker first quarter means companies are predicting a re-acceleration of earnings to growth later in 2019—that’s effectively a higher bar, and could mean disappointment for investors later on if earnings trends don’t reverse.”
* Interview: Karina Funk, co-manager of the Brown Advisory Sustainable Growth fund, believes that companies that embed sustainability in their business can provide compelling customer value (picks: Danaher, TMO, AZPN, BLL).
* Profile: Aram Green, manager of ClearBridge Select, which invests in young, disruptive companies as well as those that have durable growth prospects (top 10 holdings: NOW, SBAC, SHOP, ROST, CSOD, MELI, AAP, WIX, CPRT, SYNH).
* European Trader: The UK has emerged as the top global location to support autonomous vehicles, according to a new analysis conducted by the Society of Motor Manufacturers and Traders, and the sector could generate $81.1B annually by 2030.
* Emerging Markets: Saudi Aramco’s bond debut “was more than a feeding frenzy for yield-starved fixed-income managers. It lifted the curtain on the secretive monopoly’s finances, which look impressive,” showing it to be the world’s most-profitable corporation.
* Commodities: “Silver has been a lackluster performer this year, but as investors’ appetite for gold improves silver might share in the yellow metal’s prosperity.”

>>> Treasury Sec Mnuchin: imbalances must be addressed across Europe; US wants t

Treasury Sec Mnuchin: imbalances must be addressed across Europe; US wants to address trade imbalances
- Seeing good cooperation with Japan on currency; want to include FX provision in any trade agreement to avoid currency manipulation
- Personally takes the responsibility of US Dollar as the world's reserve currency very seriously
- Had discussions with IMF about process for recognizing Guadio as Venezuela's leader

>>> IMF statement: global expansion continues but at a slower pace than was anti

IMF statement: global expansion continues but at a slower pace than was anticipated in Oct 2018; risks remain tilted to the downside
- Global growth will firm up in 2020
- Notes limited policy space, historically high debt levels, heightened financial vulnerabilities and other longstanding challenges
- IMF members recognize the need to resolve trade tensions and support necessary reforms at WTO to improve its functioning
- IMF members will refrain from competitive FX devaluations