The Trans-Pacific Partnership (TPP) is an economic "upgrade" with the potential to kick start world markets, International Monetary Fund (IMF) managing director Christine Lagarde said today.
Speaking at the annual meeting of the IMF and the World Bank in Lima today, Lagarde stressed the importance of implementing the free trade deal.
"I am hopeful that, building on the recent TPP agreement, we can restart the stalling engine of global trade. These upgrades will make the global economy more resilient against the increased uncertainty that we face now."
Lagarde's speech follows the successful conclusion of the TPP talks, announced on Monday by trade ambassadors from the participating countries.
Signatories to the deal include the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The agreement is expected to introduce deregulated and streamlined trade between its member states.
Lagarde added that bringing together countries representing 40 per cent of global GDP will be "beneficial for global growth".
Although she admitted that the IMF has yet to be analyse the provisions of the the trade deal, she said it was "bound to unleash some potential".
Opponents of the deal have criticised TPP for excluding BRICS countries, but Lagarde praised its potential to tackle "uncertainties" in global markets. She went on to call out leaders of emerging markets, telling them to "firmly address the buildup of corporate leverage and foreign debt".
Earlier this week, the IMF warned that the global economy was at risk from an $18 trillion emerging market debt pile.
It said most of the weakness came from emerging markets and warned that the global economy may be on the brink of recession, with rising levels of emerging market debt chief among the “triad” of risks facing the globe.
Lagarde, in her speech today, cited China and a shift in US monetary policy as the principal causes of current global economic uncertainty.
Among the other themes of her speech were energy prices and the impacts of climate change, a factor she said "must be integrated into the macroeconomic frameworks of all countries".
Lagarde concluded by saying she wants to see an IMF that is more "agile, integrated and member focused".