Treasury Secretary Janet Yellen is expected to push her reform agenda for the World Bank, meet with senior Chinese officials and may discuss new ways to limit Russia’s revenue from oil sales on a nine-day international trip set to start Sunday.
Yellen will spend five days in Marrakech, Morocco, where the International Monetary Fund and World Bank are holding their annual meetings. On Oct. 20 she’s scheduled to deliver a speech on World Bank reforms, according to a senior Treasury official who spoke on Thursday with reporters, and will hold a press conference on Oct. 11.
The US reform agenda includes pledging more money to the World Bank to help countries deal with climate change and urging other nations to do the same.
The IMF meetings could also give Yellen an occasion to sit down with Chinese counterparts, though no meetings have yet been announced.
Ties between the US and China have improved over the past few months, and economic relations, in particular, have thawed since Yellen visited Beijing in July — her first visit there as Treasury secretary.
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The two sides have since stepped up communication on economic and financial matters and established two working groups to discuss such issues. A visit by top Chinese officials to the US could be the next step, which may help clear the way for a meeting between Presidents Joe Biden and Xi Jinping in California next month, if Yellen can keep the rapprochement on track.
Other priorities for Yellen during the trip include:
IMF quotas
Yellen will host an “IMF Rountable” on Oct. 11 with representatives from emerging economies. She’s likely to hear reaction to a recent US proposal that IMF quotas be increased without recalibrating country shares to reflect the growth of several developing economies, chiefly China. China now accounts for about 18% of global economic output, yet it has just a 6% voting share in the IMF.
“There’s going to be a lot of discussion about this behind the scenes now that the US has shown its cards,” said Mark Sobel, a former senior Treasury Department official who’s now US chairman of the Official Monetary and Financial Institutions Forum.
A more representative distribution is unlikely for several reasons. European countries would lose out if quotas were realigned more closely with economic size. And while the US might be more willing to consider an increase for China if it played a more active role in debt relief for low-income countries, the US Congress is unlikely to approve support for new quotas.
Debt relief
Another sideline gathering will be for the Global Sovereign Debt Roundtable, a group meant to address issues holding up debt restructuring deals for low-income countries.
Yellen and other officials have been trying to pressure and coax China — the largest creditor to the developing world — into participating more readily in such agreements. Expectations are low for any breakthrough.
Oil price cap
Yellen acknowledged last week that the price cap on Russian oil imposed in late 2022 over President Vladimir Putin’s invasion of Ukraine was faltering. She said the US-led coalition behind the plan to reduce Moscow’s oil revenue without disrupting global supplies would soon look at ways to revive its effectiveness.
That has raised expectations that Group of Seven finance ministers will take up the topic when they, too, meet in Marrakech.
From Morocco, Yellen is scheduled to fly to Luxembourg for a meeting with euro area finance ministers. The European Union is the other key partner group to back the price cap.
Critical minerals
In Luxembourg, Yellen will discuss EU-US economic ties and the way each deals with China, including plans to forge a cooperation agreement on sourcing critical minerals.
Such a pact would help accelerate clean energy and economic resilience in both Europe and the US, according to the Treasury official who spoke with reporters.
While no minerals agreement will be signed during the trip, the official said, a final deal could move forward when European Commission President Ursula von der Leyen and European Council President Charles Michel meet President Joe Biden in Washington on Oct. 20.
