RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/89 
10 November 2004 
 (04-4767) 
General Council 
22 October 2004  
 
 
 
MINUTES OF MEETING 
  
Held in the Centre William Rappard
 
on 22 October 2004  
 
Chairman:  Mr. Shotaro Oshima (Japan) 
  
COHERENCE IN GLOBAL ECONOMIC POLICY-MAKING AND COOPERATION 
BETWEEN THE WTO, IMF AND WORLD BANK 
   
1. The Chairman
 welcomed Mr. Rodrigo de Rato, newly-appointed Managing Director of the 
International Monetary Fund, and Mr. James Wolf ensohn, President of the World Bank, and noted 
that their presence, alongside the Director-Gener al, Dr. Supachai, was evidence of the strong 
relationship that existed between the WTO, the IMF and the World Bank.  It also underscored their 
collective commitment to the success of the multilateral trading system, and an understanding that the 
shared objectives of economic growth, financial stability, poverty reduction, and sustainable 
development could not be advanced in isolation, bu t were, in fact, pieces of an interconnected whole.  
He knew that Mr. de Rato and Mr. Wolfensohn pers onally attached high priority to a successful 
outcome to the Doha Round, and viewed it as having  the potential to make a valuable contribution to 
meeting their own institutional objectives, and to  promoting more growth and less poverty throughout 
the world.  He also knew that WTO Members had a shared stake in their continued commitment, 
leadership and support. 
2. As outlined in the Airgram circulated to  convene the meeting (WTO/AIR/2402), it was 
suggested that discussion focus on strengtheni ng cooperation among the three organizations, 
particularly in respect of technical and financ ial support for the Doha Work Programme and its 
implementation.  He proposed that Mr. Wolfensohn, Mr . de Rato and Dr. Supachai be first invited to 
make their opening statements.  He would then i nvite WTO representatives to make their comments, 
and in doing so he encouraged them to keep their statements brief in order to allow Members to hear 
from as many speakers as possible during the morning. 
3. The President of the World Bank , in addition to circulating prepared remarks (Annex 1), 
welcomed the opportunity to continue discussi ons on coherence – begun at the General Council 
meeting held in May 2003 – and on the issues that linke d the three organizations together.  As distinct 
from the last meeting, he felt that discussion c ould begin from a point where it was more widely 
recognized that the issues of trade, poverty alleviat ion, and growth were interconnected.  Just as the 
work of the WTO was not something separate and dis tinct that could exist on its own, nor was the 
work of the Bank and the Fund separate and distinct , existing without trade.  It was clear that 
coherence was required – that an integrated appr oach to the issues of global equity and peace and 
poverty alleviation were all very much tied together. WT/GC/M/89 
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 4. As Mr. de Rato had observed at the recent Annua l Meetings of the Bank and the Fund, global 
economic growth in 2004 was the best in thirty years.  Yet a shadow of terrorism and war was 
hanging over the world, diverting governments' attention, and dimini shing the mood of ebullience that 
might otherwise exist.  The overriding concern for stability and peace was distracting countries from what the three organizations were trying to achieve.  In terms of allocation of resources, the world was 
spending US$ 900 billion on defence and military expenditures – far more than countries were 
currently devoting to poverty reduction and even to trade.  This underscored the importance of 
remaining focused on the underlying causes of instabilit y, which related – in the Bank's judgement at 
least – to the fundamental issues of poverty and equity. 
5. He also noted that the balance in the world was shifting.  At present trends, the developing 
world over the next 25 years would add some 2  billion people – and the developed world perhaps 
only fifty million – to the global population, meaning that 7 out of 8 billion people would live in developing countries (and by 2050 this figure would rise to 8 out of 9 billion people).  Countries 
needed to recognize that they were not dealing with  a situation which was "business as usual"; rather 
there was a fundamental readjust ment of the balance on the planet, moving in the direction of 
developing countries.  As one looked forward to 2050 (when global GDP would no longer be US$ 35 
trillion but US$ 140 trillion, and when the developi ng world would represent, not 20 per cent, but 40 
per cent, of economic output) it became clear that unless countries dealt with this rebalancing – and 
the resulting challenges of employment, growth and equity – there could be no lasting stability and 
peace.  This was not an original judgement by the World Bank.  It had already been raised in the 
Pearson Commission report, in the Brundtland Commi ssion report, and in the Millennium Assembly.  
What linked the three organizations was a common realization that unless progress was made on 
poverty and equity there was no way that there would be a peaceful world.  The driving imperative behind coherence was this changing reality, and th e need for these organizations to work, not in 
separate compartments of a trade negotiation, or a poverty negotiation, or even a macroeconomic negotiation, but by a unified approach to the challenges countries were facing. 
6. It was clear that with the July framework ag reement – and after the resolutions of current 
political events in the United States and Europe – there would be a resumption of the pace and 
penetration of the Doha negotiations before the H ong Kong, China Ministerial Conference next year.  
The position of the World Bank was that the Doha negotiations were a crucial element in addressing 
the challenge of growth;  yet the possibility of successful trade negotiations without attendant support 
from institutions such as the Bank and the Fund was un likely.  It was here that the importance of 
coherence lay.  The World Bank could play a critical  role in helping countries both to take advantage 
of trade opportunities and, where trade liberalizat ion might have an adverse impact, to provide a 
support mechanism that allowed for adjustment.  That meant focussing on infrastructure, trade 
facilitation, capacity building, investment, competitive  markets, and so forth, working, as the World 
Bank was doing, with other institutions within the cont ext of the Integrated Framework. Much of this 
was already ongoing in anticipation of the result of  the current Round of negotiations.  The World 
Bank was also working with countries that curren tly had preferences, and where those preferences 
were disappearing, to see the extent to which there was any adverse impact, and how the Bank could cushion such effects.  In addition, the World Ba nk was working with its clients in the developing 
world to address the question, not just of trade with  wealthy countries, but of south/south trade, and 
where progress might be made.  Thus, the World Bank was available, not as a leader of trade 
liberalization, but as a supplement to the WTO.  But the WTO's effectiveness was, in turn, dependent 
on the complementarity of what the Bank was doing. 
7. He added that granting observer status to th e World Bank in the negotiations would greatly 
assist coherence objectives since the activities both  institutions were undertaking were shared 
activities.  Another area that was key to improving c oherence was the exchange of data.  There were 
certain limitations, at the moment, on the distribution of some data regarding trade, and he very much 
hoped that in the coming months both institutions co uld find ways to overcome these obstacles so that  WT/GC/M/89 
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 the flow of information could be freed up as an inte rnational resource.  In conclusion, he reaffirmed 
that the Bank was anxious to work with the WTO, and that trade needs did not become separate from 
– but rather became part of – the work the Ba nk was doing on poverty reduction (especially in the 
PRSPs), because the results of trad e were integral to the developmen t and poverty alleviation process.  
As WTO Members were well aware, the impact of trade had the potential to far exceed the impact of 
aid, and it was clear to him that most countries in the process of development were more anxious to 
earn their way out of poverty than to receive aid.  They were ready to do it, they were ready to be 
responsible, and the Bank was ready to work with them in any way it could to try to help them 
achieve that objective.   
8. The statement by Mr. Rodrigo de Rato, Managing Director of the IMF , is attached in 
Annex 2.   
9. The statement by Dr. Supachai Panitchpakdi, Director-General of the WTO , is attached in 
Annex 3.   
10. The representative of Nigeria , on behalf of the African Group , noted that the presence of the 
Heads of the WTO, IMF and World Bank was a test imony of the importance they attached to the 
successful implementation of the Doha Developm ent Agenda (DDA).  The African Group believed 
that the present meeting, which was being held a fe w months after the adoption of the July Package, 
offered a unique opportunity for dele gations to share with the three institutions their perspectives on 
what they considered to be the key challenges f acing the international community on issue of global 
coherence.  It also afforded the three institutions an opportunity to share with Members their vision of 
how to contribute, in a concrete manner, to th e achievement of global coherence, within the 
framework of a stable international environment conducive to development. 
11. The African Group went on to outline the econom ic, trade and financial situation currently 
prevailing in many African countries, as a way of highlighting the importance of global coherence.  
The political, economic, trade and financial reform s many African countries had undertaken over the 
years appeared to be paying dividends for a number of countries.  Indeed, according to the 2004 
Economic Commission for Africa Report on Africa,  Africa was the second fastest growing 
developing region in 2003, behind Eastern and S outhern Asia.  The continent's performance was 
underpinned by rising prices for oil and other commod ities, an increase in fore ign direct investment 
and good macroeconomic fundamentals, backed by improved weather conditions.  As a result, real 
GDP had grown by 3.2 per cent in 2002. 
12. Although these signs of progress were encouraging, they fell short of the continent's urgent 
need for more rapid growth.  Unfortunately, Afri ca was still a long way from achieving the 7 per cent 
average growth required to meet the objectives of the Millennium Development Goals of halving 
poverty by 2015.  But it was reassuring that A frica, overall, continued to exhibit better 
macroeconomic fundamentals in 2003.  Fiscal deficits had been largely kept under control, despite the 
challenge faced by many countries of balancing increased spending for poverty reduction with the 
requirements of macroeconomic stability.  Africa's inflation rose slightly from 9.3 per cent in 2002 to 
10.6 per cent in 2003, and regional current account deficits fell from 1.6 per cent of GDP in 2002 to 
0.7 per cent in 2003.  These achievements would have been impossible in an international environment characterized by instability. 
13. For the African Group, global coherence meant creating an international environment that 
allowed Africa to attain its development goals an d, more importantly, to initiate development 
strategies which would lead to poverty reduction and an improvement in the lives of its people.  In 
this respect, the policies being pursued by ma jor developed countries, as well as by the three 
international organizations (WTO, IMF and World Ba nk) charged with the task of ensuring stability 
in the global trade and financial system and with promoting development, needed to be consistent WT/GC/M/89 
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 with the African countries' devel opment goals.  In this regard, th e African Group called upon the three 
institutions to fully support the New Partnershi p for Africa's Development (NEPAD) initiative. 
14. The need for more active cooperation between  the WTO, IMF and the Bank could not be 
over-emphasized.  The three institutions all had a ro le to play within their respective mandates and 
competence in providing support for developing countri es in order to enable them to reap the benefits 
of globalization.  The General Council Decision of  1 August 2004 served as an important reminder of 
the need to achieve enhanced cooperation among part ner institutions and to widen the scope for such 
cooperation.  In this regard, he argued that th e coherence mandate could be delivered upon in a 
concrete manner in the following areas contained in the July Package:  (1) implementing the 
recommendations of the Cotonou Workshop on the deve lopment aspects of the Sectoral Initiative on 
Cotton;  (2) enhancing technical assistance and cap acity building, so that African countries could 
derive benefits from the July Package;  (3) to th e extent that trade facilitation would promote trade, 
addressing this issue in a "coherent" way, which me ant (as the Bank and the Fund had noted in their 
joint letter to the Cancún Ministerial Conference)  taking necessary action to assist African countries 
and all developing countries during and after the trade facilitation negotiations;  (4) providing 
adequate resources to support the Integrated Fram ework (IF) and the Joint Integrated Technical 
Assistance Programme (JITAP);  and (5) supporting A frican countries in meeting the adjustment costs 
associated with implementation of the Uruguay Round Ag reements as well as the eventual outcome of 
the Doha Work Programme.  He emphasized that such support should be in grant form, in light of the 
debt burden experienced by African countries. 
15. In the area of policy advice, the African Group was aware that the IMF and World Bank had 
put in place certain initiatives.  He could not stress more the need for consistency in their dealings 
with African countries.  An important area of cooperation between the WTO and IMF should be the 
consistency of the Fund's advice w ith regard to the rules and disciplines of the WTO.  The African 
Group suggested that the IMF should avoid the imposition of cross-conditionality and additional 
conditions on lending – or, at least,  should ensure that such conditions were less stringent and 
supportive of development efforts in Africa.  The African Group had taken note of the IMF's Trade 
Integration Mechanism (TIM) and the World Bank' s Doha Development Initiative.  These initiatives 
were designed, among other things, to mitigate de veloping-country concerns  regarding balance-of-
payments problems, preference erosion, the phasing out of textile quotas, meeting the needs of net 
food-importing developing countries (NFIDCs), and so  forth.  However, these initiatives were not 
substitutes for the provision of enhanced market access for African countries and the removal of 
distortions in international trade.  The African  Group believed that these initiatives fell short of 
providing the positive impact that was necessary to lift  their countries to a higher stage of growth and 
development.  The Group therefore, inter alia , suggested that more resources be made available to 
African countries to meet any adjustment costs, and that conditions for their access should be less 
stringent.  African countries needed more reassu rance from the IMF and the World Bank that funds 
would be made more readily available and affordab le, and, in most cases, on a concessionary basis. 
16. Regarding the policy advice of the World Bank, the African Group noted that achieving a 
pro-development outcome in the Doha negotiations  was one of the central objectives in the Bank's 
overall mission of p overty reduction.  It also applauded the Bank's useful research, analysis and 
diagnostic studies on obstacles to trade integrati on.  As well, the Group appreciated the Bank's 
outreach programmes designed to explain to de veloping countries how the Doha Round could be 
supportive of development-oriented reforms, to in form countries about the nature and scope of the 
Bank's technical assistance and investments in trade -related projects, and to sensitize countries to the 
gains from trade reforms.  The Group urged the Bank to provide advice that was supportive of 
national development goals.  In this regard, main streaming trade policy into national development 
strategies of African countries under the auspices of  the PRSP process was fundamental to achieving 
global coherence objectives.  Furthermore, the Gro up suggested the need for a concerted effort to  WT/GC/M/89 
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 ensure that there was synergy and consistency be tween the Bank's policy advice to African countries, 
on the one hand, and commitments and obligations  under WTO Agreements, on the other.   
17. On technical assistance and capacity building, the Doha Ministerial Declaration recognized 
their importance in securing the development dimensi on of the multilateral trading system, in helping 
countries implement – and adjusting to – WTO obliga tions, and in participating effectively in the 
Doha Work Programme.  Both the IMF and World Ba nk had considerable expe rience and expertise in 
technical assistance and capacity building, and their support was essential to augment the limited 
resources of the WTO.  Both the IMF and the Bank provided support through their country 
programmes and through collaboration in WTO t echnical assistance activities.  The African Group 
noted the expansion of the Bank's trade-related tec hnical assistance through the appointment of trade 
coordinators in each of the six regional department s responsible for ensuring a strategic approach to 
capacity building.  The Group encouraged the two in stitutions to do more to provide targeted and 
country-specific technical assistance to developing countries. 
18. Technical assistance and support for least-devel oped countries should meet their development 
needs.  To this end, the IF should be strengthene d, and the JITAP should be expanded.  The problem 
of supply-side constraints facing many African count ries should also be addre ssed.  Furthermore, the 
Group was of the view that future trade-related tec hnical assistance should be tailored to the specific 
needs and circumstances of recipient countries,  with less emphasis on general seminars and 
workshops.  It should also be more focused and resu lt-oriented in terms of building real capacity of 
individual Members.  The Group called for more c oordination between the institutions in providing 
technical assistance (including in providing techni cal assistance to countries acceding to the WTO). 
19. It was the African Group's conviction that, with political will and commitment, the 
international community should be able to craft a global coherence strategy that would contribute to 
the achievement by African countries of the inte rnationally agreed upon Millennium Development 
Goals.  Such a strategy would need to encompass, inter alia , the following elements:  first, it would 
need to establish an equitable global trade and financial system that was pro-growth and pro-
development and which allowed African countries to  pursue development strategies to attain the 
Millennium Development Goals.  Second, it would need to provide policy space for African countries 
to pursue trade and financial policies which we re supportive of devel opment goals and poverty 
reduction.  Third, it would ensure that the fo cus of macroeconomic and stabilization programmes 
implemented in Africa were designed to achieve not only a balance-of-payments equilibrium, but also 
to be supportive of overall development goals of  African countries.  Fourth, it would promote 
coherence in policies pursued by the WTO, IMF and the World Bank to ensure that there was no 
cross-conditionality, and that African countries were not called upon to implement "WTO-plus" 
measures of trade and financial reforms.  Fifth, th e Group was of the view that the Bank and the Fund 
should spearhead a policy of total debt write-offs for African countries.  This would have the effect of 
freeing scarce resources that could be channelled towards development programmes, trade and 
investment as well as social and health programmes.   Sixth, it would ensure that policies being 
pursued by major developed countries did not underm ine fundamental development goals of African 
countries, making it more difficult for them to integrat e effectively into the global trade and financial 
system. 
20. In conclusion, the African Group supported further initiatives and meetings to promote 
coherence in global economic policy-making.  All th ree institutions had a stake and role in supporting 
the Doha Development Agenda.  Th e Group believed that collectively they could address some of the 
crucial obstacles standing in the way of Africa's development and particip ation in the multilateral 
trading system.  The African Group stood ready to participate in a process that would address the problems of trade, debt and finance in order to reduce poverty, address under-development and 
improve in a meaningful way the living standards of Africans. WT/GC/M/89 
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 21. The representative of the United States
 welcomed the opportunity to join other Members and 
the heads of the WTO, the World Bank and the IMF in focussing on the shared commitment to 
promoting the Doha mandate to significantly re duce or remove trade barriers and to achieve 
coherence in addressing the development dimension of Doha.  She also appreciated the special efforts 
made by Mr. de Rato and Mr. Wolfensohn to join Members at the present meeting.  The United States 
saw their participation as a signal that trade and development went hand in hand and that Members 
could only gain if the WTO, the Bank and the Fund worked as partners. 
22. The United States welcomed the concrete step s that the Bank and the Fund had taken in 
support of the Doha negotiations.  In this regard, her delegation pa rticularly welcomed the Bank's 
Doha Development Initiative and the Fund's Trad e Integration Mechanism, and their work on 
preferences and revenue issues.  She felt that the joint work of the WTO, Bank and Fund on issues 
such as the Development Aspects of Cotton and the Integrated Framework were examples of good 
coherence in practice.  Her delegation also appreci ated the continued readiness of the Bank and the 
Fund to provide analytical insights, to examine their current policies and facilities, and to adopt 
changes in order to address the adjustment and a ssistance concerns of developing countries in the 
context of the Doha negotiations.  The work of th e Bank and the Fund would continue to be vital in 
finding practical solutions on the road ahead.  For example, it was clear that both the Bank and the 
Fund had a great deal to offer in assisting develo ping countries in the broader aspects of trade 
facilitation which went beyond  current WTO negotiations. 
23. Her delegation agreed with the Secretariat background note (WT/TF/COH/S/9) that in order 
for the Bank and the Fund to support further the Doha Development Agenda, they needed to be 
flexible.  Sometimes this was simp ly a question of perception – i.e., where Members just did not know 
about appropriate services each institution provided .  Continued outreach to overcome this limitation 
was recommended.  She thanked the three staffs for the excellent background note that had been 
prepared to enrich the discussion,  as well as for their work throughout the year in helping Members to 
better understand the issues and concerns that ha d arisen as Members had moved ahead in their 
discussions in the WTO.  The paper ably demons trated the relationship between domestic policy 
reforms and trade liberalization in the last twenty ye ars.  The substantial increase in the global market 
share of the middle-income developing countries and the rise in the importance of South-South trade testified to the importance of supporting continued am bitious reforms in all economies.  No doubt this 
was enhanced by further development of the priv ate sector and the encouragement of innovation to 
stimulate growth. 
24. The challenge Members faced was not only to look  to the Secretariats of the Bank, Fund and 
WTO for coherence, but also to promote coherence among themselves – for example, integrating more fully trade into the PRSP process would be an important step.  The United States would continue to do its part both at the national leve l, through initiatives such as the Millennium Challenge 
Account, and at the multilateral level, through its  participation in the IF process where the United 
States was pleased to serve as one of the two IF Donor Coordinators. 
25. The representative of Brazil
 thanked the Director-General for his presentation, as well as the 
Secretariat for its assessment contained in its backgr ound note, prepared in consultation with the staff 
of the IMF and the World Bank.  He also wished to express Brazil’s appreciation to Mr. Wolfensohn 
and Mr. de Rato for sharing with delegations their very clear, important and action-oriented views.  
26. Over the past years, the General Council had held several dedicated sessions to address the 
question of coherence.  Aside from resulting in a substantive and thought-provoking exchange of 
views on the WTO, the World Bank and the Fund and their respective contributions to coherence in global economic policy-making, these sessions had hi ghlighted the manifold challenges posed by 
global imbalances and, in particular, the need for coherent policy responses.  The review and 
assessment that Members were undertaking on cohe rence could indeed contribute positively to the  WT/GC/M/89 
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 ongoing Doha negotiations and to the overall obje tive of ensuring the positive integration of 
developing countries into the world economy, in gene ral, and into the multilateral trading system, in 
particular.  
27. Success in the Doha negotiations was only part of this complex equation.  As Ministers 
wisely recognized in the WTO’s Marra kesh Declaration on Coherence:  "... difficulties the origins of 
which lie outside the trade field cannot be redressed  through measures taken in the trade field alone.  
This underscores the importance of efforts to improve other elements of global economic 
policymaking to complement the effective implem entation of the results achieved in the Uruguay 
Round".  
28. Members knew that policy actions taken by th e leading economies sometimes reverberated 
asymmetrically throughout the system.  Members needed  to continue to work together to correct the 
prevailing imbalances in the patterns of trade, fina nce and technology flows in order to ensure the 
required degree of global economic stability while generating much desired synergies among macro-
economic, financial and trade policies. In that c ontext, in order to ensure positive development 
outcomes from multilateral trade negotiations, it woul d be highly desirable if competitive domestic 
supply capacity in developing countries were stre nghthened in order to better empower them to 
participate in dynamic global value chains. Insuffi cient supply capacity, lack of competitiveness and 
faulty infrastructure effectively limited the participat ion of developing countries in international trade.  
Hence, if trade was to spur economic development and diversification, subs tantial investment in 
supply capacity, productivity and trade-related infrastructure in developing countries should be 
carried out.  
29. The need for investments in new infrastruct ure and maintenance of existing assets (around 
7 per cent of developing countries' GDP) were tw ice as much as the current level of investment 
(which now stood at 3.5 per cent of GDP).  Accord ing to available data, private investments in 
infrastructure, which had increased from US$ 20 b illion in 1990 to US$ 130 billion in 1997, had 
decreased to US$ 40 billion today, indicating that it had not successfully replaced public investment.  
Indeed, in the 1990s 70 per cent of all infrastruct ure projects were financed by the public sector, 
eight per cent by ODA and only 22 per cent by the private sector.  Public sector participation in infrastructure investment thus remained critical. 
30. Even though multilateral ins titutions' resources were insufficient to fill the gap of 
infrastructure-investment needs in developing countries, their catalytic role was not to be underestimated.  They also rendered a valuable servi ce by signaling to development agents the central 
importance of infrastructure investments in the devel opment agenda.  In Brazil's view, a strong feature 
of the World Bank's Infrastructure Action Plan was to acknowledge both the financing needs for 
projects in developing countries and the reduction in  investments in infrastructure from the private 
sector and multilateral development banks.  Brazil en couraged the World Bank to continue promoting 
capital markets' participation in infrastructure projects through both risk mitigation products and 
institutional strengthening.  As Brazil’s Finance Mini ster, Mr. Palocci, stated in a recent intervention 
at the World Bank/IMF Committee on Development:  “We underline the critical importance of fiscal space issues.  We have closely followed the effo rt made by both the Bank and the Fund in pilot 
countries to increase fiscal space for productive public  investments, especially in infrastructure”.  
31. In order to enhance and upgrade domestic suppl y capacities, developing countries should also 
be able to pursue a pro-active mix of trade and deve lopment policies suited to their conditions, to their 
dynamic comparative advantages and to their evolving  needs and circumstances.  Brazil believed this 
was an element that continued to deserve due consider ation in the WTO's coherence exercises.  In this 
regard, Brazil welcomed the Fund’s initiative to undertake a comprehensive review of its work on 
trade and to maintain a strong working relations hip with WTO as indicated by Mr. de Rato.  WT/GC/M/89 
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 32. Having approved a very substa ntive framework in July, Members had entered a new and 
challenging stage of the Doha negotiations.  With  the Hong Kong, China Ministerial Conference on 
the horizon, Members would now focus on the deta ils, specifics and concrete formulae relating to 
modalities and market access conditions, as well as on the areas of commodities, cotton, services, 
textiles, erosion of preferences and trade facilitation.   This would certainly demand a lot of hard-work 
and preparation and pose major challenges, in particul ar for developing countries.  Initiatives such as 
those undertaken under the umbrella of the Inte grated Framework for Trade-Related Technical 
Assistance to Least-Developed Countries and th e Trade Integration Mechanism should receive 
continued support from the international community.  His delegation congratulated the World Bank 
for increasing its financing for trade-related technical  assistance.  Brazil hoped trade-related technical 
assistance operations would remain mainly dema nd-driven, and be viewed in a comprehensive 
manner to meet the extremely complex negotiations ahead.  
33. Brazil believed Members could all agree that coherence in global economic policy-making 
was one of the prerequisites for a succesful deve lopment strategy leading, among other things, to 
poverty reduction.  He concluded by quoting Presi dent Lula when he addressed the World Leaders 
Meeting for Action Against Hunger and Poverty, held  in New York in September, under his initiative, 
together with President Chirac, of France, President Lagos, of Chile, and President  Zapatero, of Spain:  
"The challenges posed by hunger are huge, and require humility in orde r to recognize that there are no 
readily available solutions or magic formulas.  They  also require boldness, in order to confront this 
challenge with the sense of priority and urgency that the hungry of the world are claiming for."  
34. The representative of Tanzania
, on behalf of the Least-Developed Country (LDC) Group , 
expressed its profound gratitude to the heads of the WTO, IMF and World Bank for attending this 
important meeting and for their statements.  The LDC Group was very supportive of the objectives of 
this meeting and hoped that it would give rise to ne w perspectives on coherence so that the work of 
the three institutions could better serve the devel opment goals and interests of developing countries, 
and of LDCs in particular. 
35. The Marrakesh Agreement establishing the WTO ma ndated the three organizations to achieve 
greater coherence in global economic policy-making through cooperation.  In light of the abject poverty facing LDCs, poverty alleviation was one of the most important economic policy objectives.  
The Group appreciated the concern expressed by multila teral and international organizations for the 
plight of LDCs, the high incidence of poverty, an d the need for concerted measures aimed at its 
alleviation.  The LDC Group believed that an importa nt weapon in this struggle was to stimulate a 
dynamic process of rapid economic growth as a mean s of creating the wealth necessary to roll-back 
the scourge of stifling poverty.  In this regard , the Group welcomed the Integrated Framework as a 
tool for mainstreaming trade into the development strategies of LDCs.  However, the IF Trust Fund 
needed to be substantially augmented if it was to  be able to respond to the enormous and diverse 
challenges faced by LDCs, particularly with rega rd to tackling supply-side constraints.  The 
Diagnostic Trade Integration Studies, therefore, were an important first step in identifying priority 
actions.  However, follow up and implementation n eeded to be given equal importance.  The LDC 
Group believed that close coopera tion among the WTO, the World Bank and the Fund was important 
in this regard. 
36. International support for local development effo rts also had to preserve ample policy space 
for LDCs to identify their development goals an d implement appropriate strategies for their 
realization.  Experience had shown that "one-size -fits-all" approaches did not work well for LDCs.  
The Fund and Bank needed to show the way in pr oviding such policy space to enhance ownership of 
policies and to ensure the sustainability of th e development outcomes of such policies.   
37. For the LDC Group, coherence in global economic policy-making was not about whether 
integration into global economy was good or bad.  It was a bout providing adequate space for  WT/GC/M/89 
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 development policies, including the need to make  special and differential treatment provisions 
effective and operational as the practical manifestat ion of such policy space.  Correct sequencing of 
economic policies – and determini ng how far countries should liberalize their economies – was very 
important.  Reforms in the decision-making and in stitutional governance structures of the WTO, the 
IMF and the World Bank needed to be undertaken to provide for more transparent, participatory, and 
representative governance structures in these institutions. 
38. Finally, the LDC Group was desirous of – and comm itted to – a global coherence strategy that 
would mainstream the following issues:  (1) the enhancement of technical assistance programmes of 
benefit to LDCs, and the provision of  funds in grant form so that countries could undertake projects of 
long-term developmental benefit;  (2) the involvement of all relevant stakeholders in the LDCs policy 
formulation processes (viz PRSPs), as well as a commi tment to take on board their views so as to 
develop truly national pos itions;  (3) according governments policy space to enable them to plan 
country-specific programmes aimed at breaking the ci rcle of poverty; (4) the adoption of policies 
were truly reflective of development;  and (5) total debt write-offs for LDCs.  He concluded by noting 
that the LDC Group remained committed to coopera ting fully with the Chairman, and to supporting 
initiatives and dialogue aimed at furthering the coherence agenda. 
39. The representative of Japan  noted that pursuing policy coherence among the WTO, IMF and 
the World Bank would contribute to sustainable development and poverty reduction in developing 
countries which, in turn, would lead to the st able development of the global economy.  More 
precisely, a series of activities, such as data sharing among organizations, collaboration in terms of trade policy and inter-agency cooperation in techni cal assistance, would contribute to the success of 
the Doha Development Agenda negotiations.  The aim of these negotiations was to achieve 
development in developing countries through partic ipation in the multilateral trading system.  His 
delegation believed that the provi sion of financial facilities by th e IMF and the World Bank would 
alleviate any temporary adverse effects caused by th e acceleration of trade liberalization in developing 
countries.  Japan recognized that the IMF's Trade Integration Mechanism, and the World Bank's Doha 
Development Initiatives were concrete results of the discussion on policy coherence held last year.  In 
this context, Japan also welcomed the communiqu és of the Development Committee and International 
Monetary and Financial Committee earlier this month which emphasized the importance of trade 
liberalization and the strengthening of internationa l trade rules, and which affirmed the commitment 
of the Bank and the Fund to providing necessary assistance. 
40. One of the most difficult challenges that devel oping countries faced in integrating themselves 
into the multilateral trading system was overcomi ng so-called "supply-side constraints".  In WTO 
development discussions, many developing-country  delegates had emphasized the importance of 
tackling this issue – along with improving market access, and giving due consideration to the development aspects of implementing trade rules.  However, the problem of supply-side constraint 
could not be solved by the WTO alone, which was primarily focused on negotiating rules for 
multilateral trade.  In order to deal with the problem  of supply-side constraints, the contribution of the 
Bretton Woods institutions was of the utmost importance. 
41. His delegation wished to highlight the importance of policy collaboration with  regard to trade 
facilitation.  Based on the July decision, Member s had reached an explicit consensus on launching 
negotiations on trade facilitation.  In order to fac ilitate trade – and to maximize the positive impact of 
trade for poverty alleviation – it was es sential that this issue be dealt with in a comprehensive manner.  
Efforts made at a regional level, and in relevant  sectors and organizations, should be synthesized.  
Japan hoped that both the Fund and the Bank would be able to provide appropriate support in this 
area. 
42. In conclusion, he said it was important to consider how Members could follow up on the 
enlightening input provided by both agency heads at  the present meeting.  In the WTO, the Working WT/GC/M/89 
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 Group on Trade, Debt and Finance had been establis hed in accordance with paragraph 36 of the Doha 
Ministerial Declaration.  As a follow-up mechanis m for technical issues, Members might utilize that 
Group to further discuss and explore the issues rais ed by the representatives of the IMF and the World 
Bank. 
43. The representative of China
 welcomed Mr. de Rato and Mr. Wolfensohn to the WTO, and 
thanked them for joining Dr. Supachai and WTO Me mbers to continue their exchange of views on 
further strengthening policy-making coherence amo ng the three international economic institutions 
and enhancing the development pros pects and raising the living standards of people in developing 
countries.  International trade played an importa nt role in promoting economic growth, creating 
employment and alleviating pove rty for developing countries, including the least-developed among 
them.  Enhancing market access for products of export interest and comparative advantage to 
developing countries, formulating (a nd faithfully implementing) a set of balanced and fair trade rules, 
substantially reducing subsidies,  removing both tariff and non-tariff barriers in all areas, and 
providing operational and effective special and di fferential treatment – these comprised the basic 
mandate and main obligations of the WTO.  The D oha Development Agenda, the July package of the 
Doha Work Programme, and the current negotiations  provided a good opportuni ty for advancing these 
objectives.   
44. China expressed its appreciation to the IMF and the World Bank for the useful work they had 
done over the years in their policing-making and re levant operational activiti es to help developing 
countries, including China.  His delegation was also pleased to note the improvements they had made – or were planning to make – in providing macr oeconomic policy advice to developing countries, 
particularly to LDCs and the other poorer countri es, including, for example, through their balance-of-
payment financial assistance programmes and their de bt relief initiatives for Heavily Indebted Poor 
Countries.  China encouraged the Fund and the Ba nk to continue to provi de these supporting activities 
in order to make the various programmes more adapta ble to specific situations, more targeted to the 
difficulties these countries faced, and to allow more countries to benefit from them through more 
flexible and attainable conditions .  This would certainly help de veloping countries create a better 
environment for their efforts in the trade field.  
45. On the issue of coherence among the three institutions, China said that his delegation 
appreciated the positive and constructive attitude of World Bank and IMF in supporting the Doha 
Work Programme which covered almost each and ev ery aspect of the work mandated in the Doha 
Ministerial Declaration.  Over the next couple of  years, China suggested that their main support 
programmes, within their respective mandates, shoul d be focused on capacity building, particularly 
trade-related technical assistance for negotiations on agriculture (including cotton), NAMA, services 
and trade facilitation. 
46. Based upon their long experience observing countries at various levels of development and 
with differing social systems, China encouraged the IMF and th e World Bank to continue their 
research into international economics and trade so as to help developing countries define the 
orientation of their exports and the evolution of th eir trade structures – taking into account the current 
and potential comparative advantage they may have – thus providing them with appropriate advice in 
establishing policies and objectives for negotiations. He noted that both the World Bank and IMF had 
done excellent research work.  His delegation suggest ed that the Diagnostic Trade Integration Studies 
be continued and strengthened within the context of the Integrated Framework.  He hoped these 
studies could even be expanded to cover other sm all and vulnerable economies so as to help them 
identify and address the real constraints and impedi ments to expanding their exports, and to create 
appropriate plans of action.   
47. Developing countries, particularly LDCs and ot her vulnerable economies, could be adversely 
effected to varying degrees and in different sector s by trade liberalization, especially when S&D  WT/GC/M/89 
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 provisions in WTO agreements were not yet effectivel y implemented.  In this regard, China suggested 
that existing adjustment assistance programmes – su ch as the IMF’s Trade Integration Mechanism and 
the World Bank’s Doha Development Initiative - should be further stre ngthened and improved. 
48. In sectors where some developing countries still had special concerns – e.g., agriculture, 
metals and minerals, machinery, textiles and clothing and other manufactured goods – China 
encouraged the IMF and the World Bank to design so me special technical, financial and/or industrial 
structural adjustment assistance programmes to  help these countries address their supply-side 
constraints.  Technological and financial support to help modernize infrastructure and to raise 
productivity in certain sectors could be an option.  This would be conducive both to solving particular 
problems developing countries may face and to addressing the common development cause of the 
entire developing world.  Finally, China supported Mr. Wolfensohn's call to have greater and more 
frequent exchanges of data among the three organi zations, noting that such exchanges could be 
beneficial for trade and development. 
49. The representative of th e European Communities  noted that the main issues identified at the 
last meeting – timely and effective policy advice, support for adjustment efforts, and trade-related 
technical assistance and capacity building – remained valid as orientations for future work.  With the 
Doha Development Agenda firmly back on track afte r the July package, the value of this work was 
only reinforced. 
50. First, trade-related technical assistance and capac ity building should rema in the priority for 
cooperation.  The Bank and the Fund had a key role to play in supporting the efforts of individual 
developing countries to integrate trade consid erations into national development and poverty 
reduction strategies.  This process was essential for de veloping countries if they were to be able both 
to benefit fully from the possibilities offered by the Doha Development Agenda as well as to respond 
appropriately to the competitiveness challenges posed by more open international markets.  It was 
also clear that, following the launch of negotiations on trade facilitation as an integral part of the Doha 
Development Agenda, further focused technical assi stance and capacity building in that field would 
be important.  In this context, he reiterated the Community's appreciation for the work of the Bank 
and Fund and the other agencies involved in the Inte grated Framework.  The Integrated Framework 
remained an excellent example of the coherence mandate at work and the Community was confident 
that all those involved would continue to give th e initiative the support and priority it deserved. 
51. Secondly, achieving the coherence mandate wa s not simply a question of periodic joint 
meetings at the General Council level.   Coherence needed to be part of daily life, not just in the work 
of the Bank and Fund and all othe r actively-engaged agencies and donors, but also in the WTO.  
Coherence-related issues needed to be followed up and explored at a more technical level within this 
organization, and in a more deta iled manner.  Several WTO bodies ha d a role to play here.  The 
Community supported the call by the Director-Gener al to make more use of the Working Group on 
Trade, Debt and Finance in this process, drawi ng on the coherence-relate d element of the Group's 
mandate. 
52. His third and final point was that the Community supported the Director-General – as well as 
the head of the World Bank and IMF – in seeking a quick, pragmatic solution to the question of IMF 
and World Bank observership in the Trade Negotiations  Committee (TNC).  It was nonsense that they 
were not able to be present in the TNC or its s ubsidiary groups.  Obviously, these now included the 
new Negotiating Group on Trade Facilitation, wher e the importance of trade-related technical 
assistance and capacity building was widely ackno wledged.  The Community supported a positive 
decision on this issue. 
53. The representative of Djibouti  wanted above all to underscore the importance of technical 
assistance.  He felt that all developing countries c ould agree that technical assistance was essential to WT/GC/M/89 
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 their full integration into the global trading system.  Developing countries needed to know how the 
system functioned; and in order to know this, thei r high-level officials needed to be appropriately 
trained.  He appealed to the IMF and the Worl d Bank to intensify their commitment to – and 
involvement in – technical assistance, and to be a little more dynamic in this area, as the WTO alone 
could not provide the necessary resources and expertise.   He felt that the presence of the heads of the 
Bank and the Fund at the present meeting was a reflecti on of their awareness of the importance of this 
concern.  In May 2004 Djibouti had hosted an Integrated Framework meeting but unfortunately 
representatives of the Bank and the Fund could not be present.  He wanted to appeal to them to do 
what was necessary to help his country on a bilatera l basis.  He believed that the Doha Development 
Agenda was an area where the WTO,  the IMF, and the World Bank could cooperate in a tangible way 
to achieve better results.  He also believed, as Nigeria speaking on behalf of the African Group had 
said, that the IMF and the World Bank had to examin e the role and effectiveness of conditionality in 
their programmes as it applied to African countries.   One could not ask the impossible from Africa. 
54. The representative of Bangladesh
 welcomed President Wolfensohn and Managing Director de 
Rato to the WTO, and congratulated Director-Gen eral Supachai for arranging a further meeting on 
coherence, and for bringing the heads of the two Bretton Woods Institutions to Geneva.  Coherence 
was a laudable concept.  His delegation was pleased that the three organizations were giving attention 
to it.  The first – and most fundamental - questi on that needed to be addressed was the objective for 
such coherence in policies.  If the objective was to promote economic development, then a second 
issue Members needed to consider was the devel opment paradigm they had in mind.  If Members 
subscribed to the concept of trade-led growth, there was a rationale for linking the policies of the three 
organizations.  However, judging from the actions  of the three organizations, it was questionable 
whether there was a dominant growth philosophy to  which all three subscribed.  Thirdly, Members 
needed to recognize that there were fundamental  differences in the three bodies, and how they 
operated.  The WTO framed multilateral trade rules, and ensured that these rules were followed.  It 
was a forum where countries advanced or guarded thei r respective trade interest s.  Increasingly, as the 
scope of these rules expanded from border to measures,  to domestic policies and surveillance, issues 
arose that had an impact beyond trade.  It was at th is stage that the "mercantilist interests" of the WTO 
should give way to the "development" needs of di sadvantaged countries.  This was also the point 
where the development efforts of the World Ba nk and the IMF overlapped.  Although the WTO was 
not designed to promote economic development, the rules it developed had a profound impact on 
development prospects.  Given the current paradigm  of trade-oriented growth, the overlapping areas 
were vitally important for developing countries. 
55. In a trade-dominated growth strategy, the key emphasis of the interna tional organizations was 
on the policy or "enabling" environment.  While  no-one denied the need for a proper policy 
environment, no amount of so-called "policy fixes"  would generate exports.  What was missing was 
the involvement of private entrepreneurs who woul d actually produce the goods for export.  What was 
also missing was the much-debated policy space that was fundamental to generating growth. 
56. When the Bretton Woods institutions emphasi zed policies of trade liberalization for 
developing countries, they stressed tariff reduction.  Had the institutions considered when this policy 
was – and was not – good for developing industries, pa rticularly if they wished to produce goods for 
export?  There were instances where it might be necessary even to ban imports.  A few years ago, 
Bangladesh prohibited the imports of four categori es of products in which it was thought there was 
promise for the domestic industry.  The WTO agreed to  the ban for seven years.  Already, in two of 
these cases, the domestic industry had flourished and Bangladesh expect ed to soon become 
competitive.  Had Bangladesh blindly followed the course of liberalization, these industries would 
never have developed. 
57. It was not easy to pick winners.  It was far less easy to generate enthusiasm among domestic 
entrepreneurs to invest in an uncertain external environment.  These were examples of how countries  WT/GC/M/89 
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 had taken pains with their private sectors, and with  success.  Even in the European Union, policies 
were pursued to promote the private sector in i ndividual countries with remarkable success.  These 
successes were difficult to achieve, but the difficulty should not deter countries;  nor should countries 
seek easy escape through policy-fixes. 
58. Occasionally, countries had exploited trade preferences to develop their industries.  The 
textiles and clothing industry in Bangladesh was a case  in point.  The quota system actually helped the 
growth of its industries.  Now these quotas were to  be lifted, but before Bangladesh's industries had 
had time to adjust.  The future of this industry was uncertain.  It was predicted that the industry in 
Bangladesh would be seriously affected, as exporte rs would be crowded out by major suppliers.  
Millions of jobs were at stake.  Bangladesh did not have the resources of a developed country to 
provide a cushion for those who might be thrown out of a job.  How were governments to explain to a 
poor worker, who had just managed to lift herself a nd her family out of poverty, that tomorrow she 
might not have a job on account of changing multilate ral rules?  Not only would she fall back below 
the poverty line, but she would also drag down the fa mily that was dependent upon her.  This was the 
human dimension of changing trade rules, and one th at the three institutions had not demonstrated a 
capacity to come to grips with.  Into this milieu, the IMF had come forward with its Trade Integration 
Mechanism which was supposed to offer hope of over coming such a problem.  His delegation felt that 
perhaps the IMF should examine how much money it w as able to offer a country, in comparison to 
that country's need.  It was distressing to see th e Trade Integration Mechanism being offered as a 
panacea – although, of course, oceans were made fr om drops of water, a nd his delegation supposed 
that every drop counted. 
59. When the Bretton Woods institutions urged de veloping countries to liberalize their trade 
regime, they went far beyond what was required in the WTO. This was supposed to be good for 
development.  However, there did not seem to be corresponding, equivalent pressure on developed 
countries to adjust their trade regime to accommodate the interests of disadvantaged countries.  At this 
stage, he wished to compliment President Wolfen sohn who, earlier in the year in Shanghai, had 
expressed the view that the Washington consensu s was dead.  Bangladesh looked forward to his 
institution adopting this view wholeheartedly.  The realization was gradually dawning that each 
country had its own individual needs, and that "o ne-size-fits all" solutions were not the answer. 
60. In conclusion, he noted that Nobel laureate Joseph Stiglitz had spoken at the WTO recently, 
and had put forward his views on what could form elements of a development round.  These elements 
were immensely appealing to a developing coun try such as Bangladesh, and he had even heard 
several developed-country repres entatives express the view that many of his suggestions were 
intrinsically sound.  Members needed  to look "outside the box" if a coherent approach to assisting 
countries to develop through trade was to be successful. 
61. The representative of Chile  noted that the value of the WTO lay in its system of rules, and 
that those rules should make economic sense.  But in some case those rules did not make sense; 
including, for example, rules on anti-dumping, safegua rds, and regional trade agreements.  While in 
the current negotiations Members were engaged in atte mpting to improve those rules, he feared that at 
the end of the present Round Members would still be a long way from eliminating these perverse 
instruments of protectionism.  The challenge was to develop a long-range plan for improving the 
rules-based system in a way that made economic sen se.  His delegation invited the IMF and the World 
Bank, in particular, to help WTO Members to think about how this might be accomplished.  As he had 
noted on other occasions, the WTO itself was not well-designed for open exchanges and strategic 
thinking, in part because Members we re reluctant to risk prejudicing their negotiating positions.   The 
WTO therefore needed to rely on the capacity and the independence of its sister organizations to help 
it to think long-term.  For example, the World Bank could be invited to look at the kind of free trade agreements that were being negotia ted, and to pass judgement on whet her they made economic sense.  
His delegation also fully supported giving observer st atus to the IMF and the World Bank – and other WT/GC/M/89 
Page 14  
 
 international organizations as we ll – and he urged the Director-G eneral and the General Council 
Chairman to work to resolve this  absurd situation.  Finally, he expressed the view that WTO Members 
did a disservice to themselves by limiting such Coheren ce meetings to half-day events – and to such 
formal, non-interactive formats.  It was not necessar y that the heads of the IMF and the World Bank 
be present all the time, but certainly he felt that Members had many important things to say and issues 
to discuss.   
62. The representative of Canada
 noted that his delegation attach ed great importance to coherence 
between international institutions.  Canada welcomed the progress made over the past year by the 
IMF and the World Bank in mainstreaming trade in to their agendas.  Canada also fully supported 
observer status for the World Bank and the IMF,  which could only enhance coherence.  His 
delegation was encouraged by the strong research a nd policy-advice role that had been undertaken by 
the Bank, its considerable expansion of technical as sistance and capacity building efforts, its work on 
trade facilitation and the advocacy role that the Ba nk had been playing on trade.  His delegation was 
likewise encouraged by the Fund's introduction of its Trade Integration Mechanism, its continued 
research and analysis work (such as studies on the eros ion of preferences, trade-related loss of fiscal 
revenue and exchange rate vola tility and trade), and its significant and long-standing assistance and 
capacity-building work. 
63. Canada also believed that coherence started at home – in domestic policy.  It was important 
that countries integrate trade policy and technical  assistance and capacity building into their core 
development strategies, failing wh ich the Bretton Woods institutions would be limited in their ability 
to respond.  The trade strategies that would be the most successful were those that were designed to 
complement general programmes of economic refo rm, such as those related to the regulatory 
environment, investment climate, transportation sy stem and customs procedures.  Canada felt that 
continued attention to integrating trade into th e development strategies of developing countries, 
particularly PRSP's and World Bank Country Assist ance Strategies, was needed.  Since PRSP's and 
other national development plans were increasingly becoming the main platform for policy planning, 
budget allocation and interventions by development partners, mainstreaming trade in these plans was 
critically important. 
64. The representative of Morocco  observed that the three international organizations played a 
central role in financial stability, the fight against poverty and in the expansion of world trade, as well 
as in economic and cultural development.  However,  the decisions taken by these organizations had 
great consequences for the quality of life of all people.   It was important to have close cooperation in 
drawing up of international economic policies.  In  the process of harmonizing rules and generalizing 
measures of economic and trade reform, national gove rnments and international organizations should 
not lose sight of the fact that the final objective was the fight against poverty.  His delegation fully supported President Wolfensohn’s idea of empowering developing countries to make use of their own 
resources and potential.  He appealed to the thr ee international institutions to intensify their 
consultations with Members so that economic prescriptions would correspond to the needs of 
developing countries.  He also noted that the expansion of world trade could do no more than contribute to economic development – and that without common objectives and political will, trade 
alone would not be enough to reach the Millennium Development Goals. 
65. Morocco reiterated its belief in the importan ce of the Doha Round to development, and his 
delegation was encouraged by the agreement on the July package.  His delegation also acknowledged 
the important contribution of the three institutions to technical and financial assistance and to capacity 
building (especially the appointment of Bank regiona l coordinators).  These contributions should be 
increased so as to allow developing countries to partic ipate more effectively and constructively in the 
negotiations, and to help these countries to implemen t their obligations.  When the WTO was created 
in Marrakesh, Morocco had reminded Members about the importance of institutional cooperation and 
coherence, either through existing bodies, or new ones.  He reminded delegations that the WTO still  WT/GC/M/89 
 Page 15 
 
 
 lacked coherence, insomuch as the IMF and the Wo rld Bank still did not have observer status in the 
negotiations – and indeed were waiting in the an techamber of the organization.  This was an 
illustration of incoherence, and Members needed to co rrect it.  Lastly, he expressed the wish that other 
meetings on coherence would be he ld more regularly, and that they would be institutionalized and 
made more interactive.   
66. The representative of the IMF  said he had listened intently to the discussion and noted that 
there was a clear common ground regarding th e importance of coherence among the three 
organizations.  The Fund was committed to main taining and increasing its collaboration with the 
WTO in the future.  As regards conditionality, he  reiterated the Fund’s belief that conditionality 
enhanced policy stability, and gave countries greater resilience in the face of financial shocks.  More 
and more the Fund (and the Bank) was using its prog rammes to achieve a stab le financial framework 
which would in turn allow developing countries to ov ercome their supply constraints. He pointed out 
that there was no conditionality attached to technical  assistance, and that the IMF provided it to all its 
Member countries. 
67. On the subject of investments in infrastructur e, the IMF shared the view that sustained 
infrastructural investments were key to any successful development and growth strategy.  To achieve 
that, the Fund was already working with many Me mber countries to analyze and learn from their 
experiences.  There were four lessons he wished to  highlight:  First, debt sustainability was a key 
issue.  It was impossible to maintain adequate long-term infrastructural investments in countries 
facing debt sustainability problems.  Second, transp arency of public account rules was critical.  The 
Fund believed that it was to the advantage of develo ping countries to ensure that their public accounts 
were trustworthy – and investments were clearly pa rt of public expenditures.  The third issue was 
efficiency of investments.  It was important  for countries to develop and enhance institution 
frameworks that could analyse and promote – both soci ally and economically – the efficiency of their 
public investments.  The fourth major factor wa s the tax base.  A significant weakness of many 
developing countries was a very low tax basis – and yet tax revenues were essential if countries were 
to make needed public investments. 
68. He acknowledged that the Trade Integration M echanism was limited – and that it was not a 
panacea – but he thought it could provide countries with  adequate financing for those with balance-of-
payment problems, taking into account the fact th at trade liberalization would produce – and was 
producing in many countries – enhanced growth, an d that short-term bala nce-of-payment problems 
arising from trade liberalization would be offset in  the medium-term by growth opportunities.  The 
IMF believed that most balance-of-payment pr oblems could be actively and rapidly accommodated 
within the framework of active Fund programmes,  including conditional Poverty Reduction and 
Growth Facility.  Nevertheless the Fund was reviewing its modus operandi  in low-income countries 
with a view to enhancing flexibility to deal with balance-of-payment shocks.  The Trade Integration 
Mechanism was part of this process. 
69. The IMF was firmly of the view that trade reform made economic sense, but also noted that 
the incidence of trade-related conditionality had fa llen by some 80 per cent in IMF programmes since 
the 1990s (as part of a more general streamlin ing exercise).  The IMF also acknowledged that 
negotiating leverage might be a concern, but noted  that many developing countries had successfully 
liberalized between WTO rounds.  The WTO could help  by designing a mechanism in trade in goods 
– as it had done in trade in services – that allowe d for compensation for unilateral liberalization. 
70. As regards the Integrated Framework, he not ed that it focused on technical assistance and 
capacity building, and on mainstreaming trade in  the PRSP process.  While neither of these aims 
could be achieved in the short time frame of the Doha negotiations, the IF Diagnostic Trade 
Integration Studies (led by the World Bank) had b een proceeding at a rapid pace over the past two 
years, and the recent review of the IF, while identif ying certain areas of weakness, also concluded that WT/GC/M/89 
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 process was, on the whole, on track.  The IMF agr eed that there needed to be follow-up on the 
recommendations, and it was willing to increase its trad e-related technical assistance at the request of 
government authorities.  The Fund certainly agreed that capacity building and the mainstreaming of trade in development strategies was key, and that th e IF was now beginning to develop a critical mass.  
Thirteen detailed Diagnostic Trade Integration Studi es had already been done, and 13 more were in 
the pipeline.  The IMF also agreed that furthe r efforts were needed to ensure that countries 
incorporated the results of these studies in their policies.  The IMF had already organized one major 
conference on mainstreaming trade for government offi cials, and it was currently working with other 
organizations to organize follow-up workshops.   
71. The representative of Benin
 supported the statements made by Nigeria and Tanzania on 
behalf of, respectively, the African and LDC Gr oups.  His delegation believed that the present 
meeting was a timely one, taking place as it did after the adoption of the July framework agreement.  
A search for coherence in action and strategies fo r development and poverty e limination should be the 
main objectives of the three organizations.  Th e background note prepared by the Secretariat 
underlined in paragraph 8 the importance of th e production and marketing of cotton for certain 
developing countries.  In paragraph 18, elements  of the cotton agreement were highlighted, in 
particular the role of the Fund and the Bank in providing financial support for developing countries in 
the framework of the sectoral initiative for cotton.  His delegation wished to recall that the Cotonou 
meeting also clearly underlined the role of the Ba nk and the Fund, together with other bilateral and 
multilateral partners, in searching for a solution to the cotton problem.  The Managing Director of the 
IMF and the President of the World Bank had given assurances as regards the treatment of the 
development aspect of sector initiative.  His dele gation welcomed these expressions of support, and 
he hoped that the Cotonou Workshop decision, as well as the July decision, would be implemented as 
soon as possible.   
72. The representative of Pakistan  noted that the presence of the World Bank President and IMF 
Managing Director at the WTO for the second time in 18 months showed that coherence amongst the 
three major global economic institutions was maturi ng.  His delegation agreed with the Director-
General that this sent a powerful signal for achievi ng the objectives of the Doha Development Agenda 
– i.e., trade liberalization and poverty reduction.  Mr. Wolfensohn and Mr. de Rato had clearly noted 
what developing countries were seeking from this de velopment Round in order to make trade fairer.  
If, for example, goods from developed countries attract ed an average tariff of less than two per cent, 
goods from developing countries should not suffer duty  rates five times as much. Nor should farmers 
from developing countries have to stay poor because poorer countries' treasuries were not able to 
compete with the treasuries of rich countries.  There should be a level playing field.  Now that there 
was greater emphasis on services trade, liberalization should not be restricted to those services, such as financial services, where some countries had a much greater advantage.  Yet another major objective was the improvement of rules.  Pakistan hoped that the World Bank and IMF could exert 
their influence to bring fairness at least in th e four areas of the Doha Development Agenda.  
73. Pakistan felt that both institutions had a great deal  to offer in trade-related areas.  The World 
Bank was doing an excellent job on trade facilitation.  They had correctly foreseen that with falling 
tariff rates, it was trade facilitation which would bring greater gains.  The IMF achieved a difficult 
task in Pakistan when it encouraged tax reform a nd tariff rationalization.  When Pakistan was being 
advised to do it, the country did not like it.  Howe ver, Pakistan was now convinced of the importance 
and usefulness of these reforms.  
74. Trade facilitation and tariff reforms – including th e removal of tariff peaks on goods of export 
interest to developing countries – were vital if de veloping countries were not to lose out in the Doha 
Development Agenda, as they had done in the Urug uay Round.  Pakistan looked forward to active 
support of the World Bank in the WTO's trade fa cilitation work and from the IMF for helping the 
NAMA negotiations succeed.  Pakistan fully supported the free exchange of data and coherence at the  WT/GC/M/89 
 Page 17 
 
 
 technical level.  His delegation hoped that cohere nce among these three organizations would enable 
Members to conclude the Doha Round at an early date.  
75. The representative of Jamaica  thanked the two Bretton Woods institutions for the support that 
they were providing directly to developing coun tries and in cooperation with the WTO in trade-
related areas.  This cooperation addressed critically  important issues such as fiscal and customs 
reform, standards, and trade facilitation.  Jamai ca approved of the expansion of the World Bank’s 
trade-related technical assistance, particularly in  the area of trade facilitation – which had assumed 
new relevance with the launching of negotiations.  His delegation also noted – and supported – the 
standards and trade development f acility, and hoped to see its effective and sustained funding, as well 
as increased participation in – and access to – it by developing countries.  He also noted the important 
work that was taking place in the context of the IF, JITAP, and the PRPSs, and acknowledged the role 
that the IMF, the World Bank and other agencies we re playing in these areas.  His delegation also 
noted the important contribution of the IMF’s Tr ade Integration Mechanism and the World Bank’s 
Development Initiative, which were geared toward s enhanced capacity building support to the public 
and private sectors, especially with regard to tr ade facilitation.  The development community – and 
particularly small vulnerable economies, such as Jamaica – supported and welcomed these measures. 
76. Notwithstanding this full support, and the valuab le work that was taking place, his delegation 
wished to use this exchange of coherence to draw attention to an area that needed greater focus.  
Jamaica believed that to abide by the letter a nd spirit of the Marrakesh Decision on Coherence1 would 
require a somewhat broader view of coherence.  He  did not mean to devalue in any way the needed 
and valuable contribution of the three institutions in the area of technical assistance and capacity-
building, both to implement oblig ations and to adjust to the economic consequences of trade 
liberalization.  But his delegation also understood that achieving greater coherence in global economic 
policy-making entailed much more.  Indeed, recalling the Coherence Decision, it was clear that such a 
limited approach to coherence was not intended .  In his delegation's view, coherence required 
attention to "the interaction between the struct ural, macroeconomic, financ ial, and developmental 
aspects of economic policy-making.  The task of  achieving harmony between these policies falls 
primarily on governments at the national level, but their coherence internationally was an important 
and valuable element in increasing the effectivenes s of these policies at the national level".  His 
delegation did not find much evidence of this di mension either in the documentation or in the 
discussion on coherence, despite the fact that the thr ee institutions had such important roles to play in 
these areas in respect of both developing and devel oped countries.  He felt that there was now a 
concept and approach towards coherence that was developing-country centred, that focused on 
technical assistance and capacity building, and supp ort for trade policy reforms and liberalization by 
developing countries.  Jamaica believed that the WTO must move away from what seemed to be a 
view of coherence that seemed only concerned w ith policy needs of developing countries.  These 
needs should of course be addressed, but the coherence debate needed to be widened in order to more 
clearly and fully embrace the relevant policies of developed countries.  Jamaica believed strongly, as 
well, that the issue should not be only how the Bretton Woods institutions could support trade reform and liberalization in the WTO; there needed to be reciprocity.  Coherence should also entail a 
deepening of delegations’ understanding, as trade practitioners, of how the polices of the Bretton 
Woods institutions in the various areas of their own competency might facilitate or impede the 
development and expansion of trad e.  While appreciative of the pr esent meeting, Jamaica hoped that 
in future it might be possible to have a more interactive exchange on the issue.  
77. The representative of Paraguay
 shared the view of those delegations who believed that 
coherence discussions and work should be more in teractive and more frequent.  His delegation also 
believed that the time would come when it would be  necessary for the Bretton Woods institutions to 
meet at the very highest level in order to guide and give direction to this work on coherence.  
                                                      
1 Decision on Achieving Greater Coherence in Global Economic Policy-Making. WT/GC/M/89 
Page 18  
 
 Economic and social development could not be ach ieved in isolation of commercial and financial 
issues.  That being said, these joint efforts must  reflect a global vision.  Paraguay wanted to 
underscore that the infrastructure necessary for trad e (e.g., transport and services) needed to be 
strengthened, an issue that was of particular im portance for countries that had no coastline.  This 
group of countries noted that the cost of their expo rts and imports increased substantially, not only 
because of distances to be covered, but also becau se of the very high level of dependence on services 
and administration in other countries.  This was one of  the main reasons for the lack of investment in 
these countries, their lack of competitivity, and their vulnerability.  This was not to mention the case 
of countries whose trade was virtually strangled b ecause of external political and economic issues.  
Therefore it was important for special attention to  be given to landlocked countries – which were 
amongst the poorest in the world.  Paraguay was thus pleased to see that the WTO was going to 
initiate work on trade facilitation for these countries.  His delegation believed that this would be an 
extremely useful instrument, and Paraguay would cont ribute enthusiastically to  this work.  He drew 
attention to the Almaty Declaration which focused  on the unique requirements of landlocked countries 
– including infrastructure, services, aid, finance, and other issues.  His delegation asked that the 
problems of landlocked developing countries be incl uded in the coherence agenda, and he very much 
hoped that, in future, meetings would be  organized with this objective.   
78. The representative of Switzerland
 believed that the need for coherence in global economic 
policies was self-evident, and that the need to stre ngthen such coherence was generally recognized by 
Members.  He hoped that the present meeting would l ead to concrete results – i.e., to greater daily 
contacts between the WTO and the IMF and the World Bank.  Switzerland believed that the Bretton 
Woods institutions should be more  heavily involved in the process of accession, and in particular in 
three areas:  First, they could assist more in the preparation of analytical programmes and action 
plans, modelled on the Diagnostic Trade Integration Studies.  Second, they had a major role to play in coordinating external assistance in the area of econom ic adjustment and capacity building.  Third, the 
Bretton Woods institutions should be more involved in the development of road maps for accession 
candidates.  The terms and conditions under which the poorest countries accede to the WTO should 
take into account the development challenges that these countries face.   
79. The representative of Nepal
 said that his delegation attached great importance to the issue of 
coherence.  Flowing from the Marrakesh Agreement,  the Doha Declaration calls for achieving greater 
coherence in global economic policy-making.  Coherence for his delegation meant dynamic 
complimentarity in polices undertaken by internatio nal development, financia l and trade institutions, 
and the unity of purpose in pursing those policy op tions aimed at reducing poverty.  Thus, Nepal 
viewed trade reform and liberalization from a comprehensive perspective.  Members were aware that trade had an important role to play in promo ting development and alleviating poverty in many 
countries.  Although trade alone was not a pan acea for poverty reduction, his delegation understood 
that it played a crucial role in promoting growth in today’s globalized world. Otherwise even the 
least-developed countries would not be asking for a more favourable environment for international 
trade.  But trade should be more than a promise fo r the large majority of Me mbers.  The WTO needed 
to focus its efforts on translating these promises into realities. 
80. In that context, Nepal appreciated the establis hment of the International Trade Department in 
the World Bank in 2002.  His delegation was also aware that increased trade-related lending would help to improve the supply-side capability of smal l and poorer countries so that they could fully 
participate in the global trading regime.  The remova l of trade barriers – and trade distorting policies – 
were necessary conditions, but they alone would not be suffi cient for development without 
simultaneously removing the supply side constraints.  Reductions in tariffs would have little meaning 
if countries had little to trade.  Moreover, libera lization alone, without productive capacity building, 
risked pushing countries towards deindustrialization, loss of employment, and high costs adjustment.  
It was in those areas that Nepal looked for co mprehensive analysis – and quick and effective 
interventions – from the international development and finance institutions.  His delegation therefore  WT/GC/M/89 
 Page 19 
 
 
 expected the Bank's involvement to include not just  analytical studies in the context of diagnostic 
trade integration programmes and contributions to the Integrated Framework, but also in pursuing 
those studies to their logical conclusion with an enhanced level of resources and involvement in the 
execution of the action plans.  Simultaneously, wh ile his delegation appreciated the Bank’s support 
for product standards to enhance competitiven ess, countries such as Nepal needed more 
comprehensive help in these areas as well.    The fact was that trade-related work represented a 
relatively small share of the Bank’s overall resource s.  Members needed greater support to promote 
productive capacity building, to build logistics for trade, and to consolidate institutional mechanisms, 
including enterprise development.  In view of th e infancy of Nepal’s industries and its structural 
constraints, it was only by promoting all aspects of trade that his country could expect gains. 
81. His delegation was aware that macroecono mic stability was central to growth.  
Macroeconomic stability mechanisms  should be enforced, while giving due regard to the social-
economic adjustment sensitivities of the countries concerned.  It was extremely difficult to find an 
appropriate balance between the two, therefore flex ibilities continued to be an important strategy for 
all Members.  His delegation was pleased with th e Trade Integration Mechanism’s role in addressing 
temporary balance-of-payments shortfalls, and was enc ouraged to learn that it could also be used to 
address any adverse impacts resulting from agricultur al and other liberalization and the erosion of 
preferences.  This was a welcome developmen t but only if it was coming without additional 
conditionality.  Finally, his delegation noted that  while the international economic and financial 
environment should be supportive of national development strategies, while complimentarity in trade 
liberalization, economic reforms and national development strategi es was important, Members should 
always differentiate clearly between "means" and "ends" – and the end should be the reduction of 
poverty.  
82. The representative of Mexico  observed that the common theme in joint studies seemed to be 
that benefits of liberalization for countries app eared to exceed the be nefits of assistance and 
cooperation provided.  Mexico belie ved that the two issues were comp limentary.  In order to make 
progress in the Doha Round it was very important that countries dealing with preferences and other 
complex issues be equipped to participate fully in  the negotiations.  His delegation believed that 
financial support for structural adjustment, when prop erly designed, was essential.  On the other hand, 
World Bank programmes focussing on the micro sector had to diversify beyond what was limited by 
the preferential system. 
83. His delegation agreed with the emphasis in th e Secretariat's background note on the major 
distortions in the agricultural sector.  Greater c ooperation among the three institutions was necessary 
to reduce these distortions, and would be more than welcome.  Mexico also attached great importance 
to the services negotiations, and in particular mode 4.  It was necessary to id entify clearly the major 
advantages of such liberalization for developing countries.   
84. The representative of Cuba  observed that for her country, which was not a Member of the 
IMF, the present meeting provided a special opportunity  to listen – and make a modest contribution – 
to discussions of coherence among finance, devel opment and commercial policies.  Cuba believed 
that this coherence should encompass the policies of developed countries, as well as developing, with 
a view to creating an environment for more balanced growth of international trade.  Indeed, Article 1 
of the IMF set out the Fund's mandate for encourag ing such balanced development and growth of 
trade.  Coherent development had to take into account financial, economic and commercial realities.  
That being so, Cuba wanted to draw attention to  several issues which her delegation believed were a 
great anomaly in the global economy.  One was the subsidies paid by OECD countries, which 
represented some US$ 330 billion annually, and some US $ 250 billion of which were paid directly to 
producers.  This was one of the fundamental cause s of excessive production in rich countries – where 
costs were high – and of the suppression of deve loping-country production that might be more 
competitive on world markets.  It was well known that rich-country governments supported products WT/GC/M/89 
Page 20  
 
 such as sugar to a degree which matched total pr oduction in poorer countries.  Likewise, in 2003, 
American subsidies to cotton producers were some  US$ 3,700 million – three times the assistance 
given by the US to all of Africa.  These subsidies put downward pressure on world cotton prices – anywhere from 20 to 30 per cent – thus reducing the in come of thousands of poor farmers in Africa, 
Asia, and other poorer regions of the world. 
85. The subsidies issue, in turn, raised the question of debt.  Between 1982 and 2003, the 
underdeveloped countries paid some US$ 5,400 million in servicing their debt which implied that the 
present external debt of the underdeveloped world had in  fact been paid twice over.  In light of this 
situation, Cuba believed that it w as incomprehensible that internati onal financial institutions did not 
totally and fully eliminate and write off the de bts of those countries which were in danger of 
disappearing from the face of the earth.  As regards poverty, her delegation highlighted the fact that 
more than one billion persons survived on less than one dollar a day.  The greatest concentration of 
poverty was in Southern and Eastern Asia;  it was only China that, since the 1990s, was managing to move out of poverty to a certain degree.  Nevertheless, in Latin America, the Caribbean, the Arab world, Central and Eastern Europe , and sub-Saharan African, there had been an increase in the 
number of persons living on less than one dollar a da y.  The struggle to cancel out external debt was 
inseparable from the struggle for a multilateral trad ing system which was more balanced and just. 
86. Given these huge anomalies, her delegation belie ved that technical assistance and capacity 
building was critical, especially in the context of the Doha Development Agenda.  It was essential that 
all Members contribute to this process and ensure that it progressed.  She concluded by noting that coherence – and the mutually supportive polic ies of the Bank, the Fund and the WTO – should 
continue.  All of these institutions had to move towards even greater coherence in order to facilitate 
development which was inseparable from the goal of  achieving a multilateral trading system that was 
more just and better balanced.   
87. The representative of the World Bank
 felt it was difficult to be totally responsive in such a 
meeting, but he wanted to try to address some of the questions and observations raised by Members.  
In response to Brazil he noted that the Bank was very  active in the area of infrastructure, in close 
collaboration with the IMF.  In response to China, he observed that capacity building was at the centre 
of the Bank's activities.  As regards the points raised  by the European Commun ities, he affirmed that 
trade-related technical assistance and capacity buildin g was an important issue for the Bank, and that 
coherence in trade and other areas was integral to its day-to-day work.  In response to Bangladesh, he 
pointed out that the Bank was already engaged in tec hnical assistance in that country, and in particular 
as regards the phase-out of textile and clothing quotas – in the interests of coherence, it would perhaps 
be helpful if the Bangladesh Finance Ministry would te ll the trade Ministry some of the things that the 
World Bank was doing.  He cautioned the representative of Chile that he was very apprehensive about 
giving advice to another institution, largely because he  had never found them to be very receptive, any 
more than the Bank was.  But if Members wanted the Bank to reorganize the WTO he would be very 
glad to do it – all that he needed was the unanim ous vote of WTO Members.  As regards cotton, he 
had already explained the areas in which the Bank was active.  In response to Nigeria, he noted that 
the Bank was vigorously engaged in that country at  the moment, as it was in supporting NEPAD.  As 
regards the points raised by th e United States, he said that the Bank was currently seeking to have 
flexible outreach programmes, and coherence in the framework of its PRSPs.  As regards Pakistan, he 
affirmed that the Bank was trying to make trade fa irer.  He also assured Jamaica that the Bank was 
trying to achieve a broader coherence agenda with  developed as well as developing countries.  He 
took note of Paraguay's concern about the world' s 31 landlocked countries, and assured his delegation 
that the Bank was in fact dealing with most of th em individually – but that it might be a good idea to 
examine them as a group to see if there were any co mmonalities.  He also assured Switzerland that the 
Bank was already actively involved in the whole pr ocess of accession (e.g., in Vietnam and Ethiopia) 
and was undertaking, in cooperation with the German government, a review of its work to date.  To 
Nepal, he noted that the Bank was already gi ving supply-side support, and by 2004-2006 was  WT/GC/M/89 
 Page 21 
 
 
 expected to have allocated no less than US$ 1.5 bi llion for such support.  In response to Cuba, he 
noted that the Bank was working hard on the issue of debt and agriculture.   
88. Mr. Agustin Carstens, Deputy Ma naging Director of the IMF , responded to three issues.  
First, as regards coherence at the technical assistance level, he noted that the IMF would welcome discussions about further strengthening the cha nnels of cooperation (and explaining how Fund and 
Bank policies impact on trade).  In practically every instance, the IMF tried to make trade part of the 
development strategy for countries.  Second, on th e issue of extending coherence to industrial-country 
policies, he mentioned that in its surveillance ac tivities the IMF had been paying particular attention 
to the spill-over effects of polici es undertaken at the national level by industrialized countries.  In 
July, for example, in the IMF's biannual surveilla nce review, the Board asked staff to enhance the 
attention paid to policies spill-overs of industria lized countries, and to have a frank dialogue with 
them about their adverse impact on trade and the ec onomic situation of other countries.  Third, he 
pointed out that the Fund's trade-related technical assistance and capacity building was not limited to 
periodic exercises, but also involved opening regional centres in Africa, the Pacific, and the Caribbean 
- and soon in the Middle East.  He also noted that much of the capacity-building advice and support 
was delivered through the Fund's surv eillance process and its programmes.   The three main pillars of 
the Fund – technical assistance, surv eillance, and use of financing – a ll interacted together to try to 
establish the conditions for countries to achieve  sustained development, growth and poverty 
reduction.   
89. The representative of Egypt
 thanked the Director-General for holding this important meeting, 
which gave Members the opportunity to listen to the views of Mr. Wolfensohn and Mr. de Rato about 
coherence in global economic policy-making – a critical issue for all countries.  Egypt supported the 
statement of Nigeria, the coordinator of the A frican Group, and reiterated its appreciation for the 
valuable cooperation that had been taking place between the WTO and both Bretton Woods 
institutions since 1996, and for the rewarding and pr omising technical assistance that they provided. 
90. However, with the complexity of current trad e themes and agendas, Egypt believed that a 
more cooperative and coherent approach was needed  between the three institutions to ensure that 
issues of poverty, equity and growth (as Mr. Wolfensohn rightly put it) were not treated as separate components, to ensure that trade became an instrument of a pro-growth agenda, and to provide trade 
and development assistance to address financial im balances, especially when such imbalances were 
related to the trade restricting and distor ting policies faced by developing countries. 
91. Egypt also believed that coherence in the wo rk of the three institutions should aim at 
mitigating the possible negative implications of trade liberalization for some developing-country 
members.  Here his delegation referred, more specifically, to the Marrakesh Decision on Net Food-
Importing Developing Countries
2 which needed to be made opera tional as Members agreed on further 
liberalization. 
92. Achieving coherence was a difficult task; even achieving internal coherence within the WTO 
sometimes proved to be a very difficult exercise, as non-trade issues sometimes influenced the process 
and created a biased outcome.  But it was Egypt's firm  belief that the three organizations had potential 
to make a major contribution towards a significantly more coherent global econom y.  For this reason, 
his delegation expressed a sincere wish to see th is Member-driven orga nization arrive very 
expeditiously at a consensual, holistic decision c oncerning observership status for all pending requests 
either for international or regional intergovernmental  organizations, so the way could be paved for the 
valuable cooperation between the WTO and the Brett on Woods institutions to develop even further, 
                                                      
2 Decision on Measures Concerning the Possible Nega tive Effects of the Reform Programme on Least-
Developed and Net Food-Importing Developing Countries. WT/GC/M/89 
Page 22  
 
 with the primary objective of achieving optimal levels of coherence in global economic policy-
making. 
93. The representative of Hong Kong, China
 said that his delegation would welcome the more 
regular presence in the WTO of both Bretton Woods organizations as observe rs.  Coherence required 
mutual understanding, clarity of thought and, equa lly, clarity of speech.  Thus, his delegation was 
always delighted when it came across robustly clear statements, such as the quotation from the World 
Bank, cited at the beginning of the Secretariat No te, on the benefits of "slashing tariff barriers, 
particularly in agriculture", and again its comment, at the end of the note, that the "core constraints 
that hamper trade in goods…are in the areas of trade facilitation and compliance with standards". 
94. His delegation believed that one of the most us eful services the WTO's sister organizations 
could provide was to hold a mirror up to Members;  to  confront Members with how true they were to 
– or how far they fell short of – the fundament al economic principles espoused when the Bretton 
Woods institutions came into being.  Several speak ers had referred to the Fund and the Bank's use of 
conditionality.  Perhaps both institutions would c onsider returning the challenge, and examine the 
degree to which WTO Members had allowed their own conditionality to creep into their work, 
thereby perverting the basic principles of this Organization, and increasing the frictional costs of 
trading in a globalized economy. 
95. He agreed with Chile that the WTO needed the help of the IMF and the World Bank in 
looking forward, beyond the Ministerial Confer ence in Hong Kong, China next December, and 
beyond the end of this Round.  The WTO could congratulate itself on what had already been achieved:  the demolition of the pre-WW II tariff walls through successive rounds of negotiations, 
getting rid off Voluntary Export Restraints and Grey Area Measures and bringing Trade in Services 
under the WTO in the Uruguay Round.  His delegati on hoped to deal with the major distortions to 
trade in agriculture during this Round.  But Me mbers also needed to deal with the residual 
mercantilism so apparent in Anti-Dumping regimes and the abusive use of Rules of Origin in all its 
forms.  The help of the Fund and the Bank in fo cussing minds on the economic damage being done in 
these areas would be welcome. 
96. The representative of Bolivia
 felt that coherence between the WTO and the Bretton Woods 
institutions was an issue of great importance.  The present meeting was timely because the July 
package had been adopted, the negotiations were  back on track, certain Members had adopted 
initiatives to tackle poverty, and the decision had b een taken to launch trade facilitation negotiations.  
Within this framework, and at this technical stag e of the work, her delegation felt it was useful to 
integrate the data and information at the disposal of the three institutions.  This would enable them to 
offer more up-to-date, accurate a nd coherent advice to countries – and to landlocked countries in 
particular – undertaking complex trade and economic reforms.   
97. The representative of Sri Lanka  welcomed the President of the World Bank and the Managing 
Director of the IMF, and thanked the Secretaria t for the background note prepared in consultation 
with the IMF and the World Bank, wh ich his delegation found very useful.  As stated in the first two 
paragraphs of the paper, if Memb ers were to advance their shared objectives of growth, development 
and poverty reduction, then expanded market access lay at the heart of the task.  The great importance 
of this task, and the particularly difficult challeng es lying therein, was clarified in the next paragraph 
which stated:  "In trade in manufactured produc ts, World Bank data show that exporters in 
industrialized countries face, on average, a tariff of 1 per cent on their trade with each other, whereas 
exporters from developing countries to  industrial-country markets face average tariffs of anywhere 
from 2 per cent if they are in Latin America (whe re NAFTA weighs heavily in the calculation) to 
8 per cent if they are in South Asia."  WT/GC/M/89 
 Page 23 
 
 
 98. The levels of market access for Southern Asia n countries in the industrialized markets were 
different again.  Five of the countries in the region had duty-free access into at least one large industrialized market – which had the effect of making the average tariff for countries which did not have such preferential access even higher.  The ex planation for the difference in the average tariff 
paid by India and Sri Lanka lay not only in the product mix, but in the preference utilization and 
preferential rules of origin.  If countries like Sri La nka were to benefit from trade liberalization, then 
its exporters required a level playing field in th e area of market access, particularly in the 
industrialized countries.  Sri Lanka agreed that expa nded market access lay at the heart of the task.  
But were Members going in the right direction? 
99. The background note also provided details of  the benefits of global liberalization in 
agriculture which would be in excess of US$ 350 bi llion for the world as a whole.  The note also 
recognized that middle-income and larger deve loping countries would benefit from agricultural 
liberalization, but that least-developed countries and net food-importing de veloping countries might 
end up as net losers.  The note, once agai n, highlighted some of these concerns. 
100. Only six months ago, at the last regular Ge neral Council meeting, the IMF introduced a paper 
outlining its new "Trade Integration Mechanism".
3  That document, while recognizing that it was 
difficult  to measure the specific impact of trade re forms, identified three possi ble areas in which there 
could be adverse implications from trade liberali zation for some countries – i.e., (i) preference 
erosion; (ii) higher prices for food imports for ne t food-importing developing countries;  and (iii) the 
expiration of textile quotas following the phasing out  of the Agreement on Textiles and Clothing.  The 
paper recognized that the adverse implications  could be serious for countries which were 
simultaneously subject to several of these adverse developments.   His delegation believed that the 
issue of preferences – and preference erosion – should therefore be addressed in a comprehensive manner, as should the impact of higher food prices for NFIDCs.  Sri Lanka was also concerned that 
expiration of textile quotas would ha ve serious implications for his country – although he would not 
repeat the concerns he had recently outlined in th e Council for Trade in Goods.  Here, too, it had been 
recommended that industrialized countries should provide the countries vulnerable to quota phase-
outs with more favourable market access.  His de legation underlined that Sri Lanka welcomed 
assistance from the IMF and the World Bank, but also  felt that Members should first try to find a 
solution to market-access related problems in  the WTO before seeking assistance from other 
organizations. 
101. The Director-General
 echoed all Members in thanking Pr esident Wolfensohn and Managing 
Director de Rato for attending the meeting.  It was organized, not for the sake of image making or 
public relations, but to give substance and meani ng to a shared commitment to coherence among the 
three main international economic or ganizations, not only at this level,  but at all levels – information 
sharing, joint research, cooperative technical assistan ce, including the Integrated Framework and the 
PRSP process, and analysis in the Working Group on Trade, Debt and Finance. He and his colleagues 
had listened to a number of constr uctive suggestions for improving a nd building upon this coherence, 
and he hoped that he could produce the kind of results the Members were expecting from him, 
particularly in the areas of cotton, trade facilitati on, and technical assistance more generally. The task 
now was to continue the good work that was underway , and to operationalize the useful ideas that had 
been generated by the meeting.  The three ag encies now had their homework and would soon report 
back with results.   
102. The Chairman  declared the meeting closed .   
                                                      
3 WT/L/565 and Add.1. WT/GC/M/89 
Page 24  
 
 Annex 1
 
  
Statement by Mr. James D. Wolfensohn,
 
President of the World Bank  
 
 
1. Mr. Chairman, Dr. Supachai, my colleague, Rodrigo de Rato, distinguished Delegates, 
2. I am pleased to be in Geneva again, engaging with you all on a theme that is dear to my heart: 
the topic of coherence in economic policy-making.   Almost a year-and-half has gone by since my last 
visit to the WTO’s General Council for a similar m eeting.  These have been momentous months for 
the multilateral trade system with the unfortunate "detour" at the Cancún Ministerial and the recent 
good news on the framework agre ements reached on August 1st, that seem to put the Doha 
Development Agenda back on track. 
An Insecure World 
3. This year, we are reporting record economic growth.  And yet, somehow, we feel less secure 
about the future.  This, of course, is intimately re lated to our concerns a bout terrorism and how the 
world is evolving.  The danger, however, is that in  our preoccupation with immediate threats, we lose 
sight of the longer-term and equally urgent causes of our insecure world: poverty, frustration, and lack 
of hope. 
4. The numbers are well known.  For example, 2.7 b illion people -- more than half the people in 
developing countries -- live on less than $2 a day.  Of  these, 1.1 billion earn less than $1 a day.  If we 
want stability on our planet, we must fight to end poverty.   
5. The good news is that we know that development works.   Over the last two decades alone, the 
proportion of people in extreme poverty fell by almo st half – from 40 percent (1981) to 21 percent 
(2001).  Life expectancy has increased from 60 years (1980) to 64.6 (2002).  And adult illiteracy has 
been halved to 22 percent. 
Trade and Poverty 
6. Trade liberalization can be a force for poverty reduction, but the ultima te outcome depends on 
many factors, including initial conditions of the co untry undergoing reform, the nature of the reform, 
who the poor are, and how they sustain themselve s.   Most studies confirm a positive association 
between trade and growth, even though the magnitude  of such a relationship is controversial.   
7. But it is important to recognize that trade liberalization is not a "silver bullet"  for 
development.  Its limitations in part reflect th e many other distortions that often characterize 
developing economies.  Moreover, trade liber alization generates both winners and losers.    
8. These considerations underscore the importance of complementary governmental policies to 
deal with trade-liberalization side effects.  Implementation of social safety nets, trade-related 
institution-building efforts, and initiatives to pr omote improved supply-side response (e.g., trade 
facilitation projects) are some of the options to be considered.  WT/GC/M/89 
 Page 25 
 
 
 Multilateral trade negotiations: moving forward 
9. The July package is an important step in th e right direction.  The next stage of the 
negotiations will ultimately determine success or  failure in delivering on the promise of a 
development round.  Therefore, it is important to fo cus now on the substance of  the agreements with a 
view to  ensuring that they have a pro-poor orientation. 
10. We all recognize that the political calendar in some of the main trading nations is not 
particularly conducive to bold political commitments in  the near future.  Still, it is important to keep 
moving since signals of progress in the multilateral front  will help us to diminish the sense of 
insecurity that I mentioned before.   
The Coherence Nexus 
 
11. The responsibility for achieving an ambitious r esult in the DDA negotiations rests with WTO 
members. In pursuing their legitimate national objectives, however, countries should keep in mind 
that international spillovers from domestic actions  can compromise coherence at the international 
level.  The best known example in this context re fers to agricultural policies in OECD countries and 
their impact on developing economies. 
12. Subsidies, trade protection and other types of support to agriculture in high-income countries 
can significantly distort trade.  Support to agriculture in OECD countries, including that provided through import barriers, runs at almost one  billion dollars a day – more than five times
 all 
development assistance.   Phasing out interventions that distort agricultural trade would lead to 
increases in annual income in developing countries on  the order of hundreds of billion of dollars in the 
medium term with a potential significant impact on poverty. 
13. This is not, however, just a North-South issue.  Many developing countries also follow 
protectionist policies in agriculture.  Agricultura l trade barriers in middle-income countries, for 
example, are often of the same order of magnitude as in rich countries.    
14. While the gains from global reform of agricultu re are large, we must recognize that some 
countries now benefiting from preferential access and/ or those that are net food importers may be 
hurt.  But these concerns are not a reason to oppose liberalization by OECD nations -- we must bear in mind that the majority of the world’s poor live in countries that do not receive trade preferences.  
Instead, this calls for carefully designed and sequenced reforms in the countries concerned, 
complemented by generous development assistance  to facilitate adjustment alongside effective 
mechanisms to safeguard the poor. 
15. Distortions in agricultural trade, while the mo st glaring example of policy incoherence, are 
not the only area where inconsistencies between the tr ade and the development agendas can be found.  
It is worth pointing out that: 
• Protection of non-agricultural goods remains an is sue, particularly in the developing world.  
Despite steady progress in bringing down tariffs over the last 15 years, they are still on average 2-3 times higher in developing countries than in industrialized countries.  
Liberalization in developing countries can also be  an important lever for additional growth in 
South-South trade.  
 
• There are also substantial benefits to be attained by increased competition and/or better 
regulation in all modes of service delivery.  The pursuit of these gains should not be postponed.  The multilateral process can help  advance domestic re forms and constrain 
protectionist interests. WT/GC/M/89 
Page 26  
 
 16. We also recognize the importance of special  and differential treatment (S&DT) for 
developing countries.   But S&DT should not be confused with an invitation to free-ride the 
multilateral trade system.  After all one of the ma in benefits of engaging in multilateral trade 
negotiations is the opportunity of using the pro cess to leverage domestic reform processes.    
17. Another area that requires special attention concerns the impact of the proliferation of 
preferential trading arrangements for the multilateral trading system.  As we argue in our upcoming 
Global Economic Prospects publication (to be released on November 16
th), two main goals should be 
kept in mind when embarking on preferential deals: to make sure that these agreements work in an 
effective manner (avoiding waste of resources) and that they have minimal exclusionary effects.   
18. Finally, we know that the trade agenda goes beyond border protection and subsidies.  Higher 
standards demanded by consumers in the North must  not lock developing country exporters into a 
cycle of poverty.  And the quality of the infrastruct ure in the South should be addressed so that 
supply-side constraints do not contin ue to hinder the potential gains from trade.  These considerations, 
in turn, underscore the possib ilities for trade and aid to play a fruitful complementary role. 
The Role of the World Bank 
 
19. We have been working closely with the WTO, the IMF and other agencies in the trade and 
development communities to ensure that our efforts with respect to policy advice, technical assistance 
and information exchange are consistent.   And I hope that our request for observer status in the Trade 
Negotiations Committee and its subsidiary bodies can be addressed shortly so that we can make our 
cooperation even more effective. 
20. An important cooperative effort between our in stitutions, as you all know, is the Integrated 
Framework (IF) for Trade Related Technical Assistance  to the least-developed countries (LDCs).   IF 
activities have been launched in more than 20 countr ies in the past two years in cooperation with the 
WTO and other IF agencies (IMF, UNCTAD, UNDP, ITC).  Following the completion of Trade Diagnostic Studies (DTIS), the IF has moved from diagnostics to implementation.  We know that 
implementation remains a challenge, but that is an area where the pay-off from greater cooperation 
among agencies, donors and national go vernments can be substantial.  The integration of trade-related 
actions into Poverty Reduction Strategies remains the best route to promote greater coherence in this 
area. 
21. With respect to standards, in addition to our  own operational work, we participate in the 
Standards and Trade Development Facility (STDF) th at is managed by the WTO.  The STDF operates 
both as a grant facility – and we have contributed to its funding – and as a coordinating mechanism in 
the area of sanitary and phytosanitary standards.  We hope that the STDF will promote more strategic 
actions enhancing the sustai nability of SPS measures in  client countries.   
22. Trade facilitation was one of the pillars of our announcement at Cancún with respect to our 
support to the Doha Development Ag enda.  In FY04, our Board approved 16 new projects with trade 
facilitation components for total commitments (assigned ) for this area of more than US$560 million.  
This more than doubles the number of projects and commitments in FY03.  Moreover, we foresee that 
this high level of engagement will continue in th e years ahead (we expect Bank operations in trade 
facilitation to extend to more than 50 countries by FY06).  In short, this is an area where we are 
already making a difference and we stand ready to fu rther cooperate with you all in implementing this 
critical work program. 
23. Another area where institutional cooperation is  crucial concerns exchange of data and 
information  on trade barriers.  Non-transparent forms of protection – e.g., quotas, specific duties -- 
make it difficult for developing countries to anticip ate the  impact of liberalization.  Software  WT/GC/M/89 
 Page 27 
 
 
 developed at the Bank, and datasets developed by  the ITC, UNCTAD and the WTO give us a much 
better ability to analyze the consequences of the de tailed proposals being considered in the Doha 
Round.  We need to further cooperate in mobilizi ng funds to improve data quality and to make more 
and better trade-related da ta publicly available. 
24. With respect to the financing needs of the adjustment costs associ ated with multilateral 
liberalization and preference erosion, I want to reaffirm that we stand ready to discuss adjustment 
programs on a case-by-case basis.  We welcome the opportunity of consultations with the WTO’s Director General with a view to explore alterna tives to support the development of cotton-dependent 
economies.  We have consistently underscored the un fairness of  cotton subsidies that distort patterns 
of production and international trade.  There are a series of IDA-credits currently supporting the 
reorganization of the cotton sector in Sub-Saharan A frica.  And we have indicated to the countries 
affected that the eventual allocation of additional resources should be discussed in the context of their 
PRSPs. 
25. Let me conclude by once again thanking you all for the opportunity to discuss the important 
theme of coherence in the context of the multilatera l trade system.  The World Bank will continue to 
participate in this dialogue not only as an interest ed observer in the trade negotiations, but also as a 
partner in our combined efforts to promote trade for development. WT/GC/M/89 
Page 28  
 
 Annex 2
 
 
Statement by Mr. Rodrigo de Rato,  
Managing Director of the International Monetary Fund  
 
 
1. Mr. Chairman, Dr. Supachai, distinguished Delegates,  
2. It is a pleasure to be here with you and Jim Wolfensohn to discuss coherence in international 
policymaking. Recently, my predecessors have already underlined the importance we attach to your 
success in turning the Doha Develo pment Agenda into reality. Today I want to review our progress in 
assisting your efforts and assure you of our continued support. 
3. Having had to reconcile trade and finance respons ibilities in my previous job, I have come to 
appreciate first-hand the virtues but also the challe nges of "coherence." My experience at Cancún, and 
the years leading up to it, have hammered home two important lessons: 
4. First, it demonstrated that – more than ever be fore – the concerns of every country, large and 
small, are shaping the debate on the multilateral tr ading system. Despite the inevitable complications 
for decision-making, this is a precious achieveme nt. The August framework decisions reflect this 
inclusiveness of the Round, although of course much work remains to be done. 
5. Second, Cancún showed that the full aspirati ons of a "development round" cannot be met 
within any one policy area alone, be it trade, devel opment or finance. By its nature, a development 
round calls for action across different areas of intern ational policymaking. We need to work together 
on what is a very rich agenda.  
6. I will take up each of these points in turn, since I believe that they go to the heart of the 
coherence agenda over the coming period. 
An inclusive global trading system 
 7. The slow progress of the Doha Round reflects, in part, the increasing maturity of the 
multilateral system. Countries that had no voice before are finding their voice. They are now defining their interests, which is not only natural but we lcome. I firmly believe that a multilateral trading 
system in which all countries have an active voice is  both feasible and desirable. But it also imposes 
discipline on all countries.  
8. In a balanced and successful multilateral system the largest countries must show leadership.  
Many of the rules and the structure of protection of today’s multilateral trading system have been 
written in past rounds when few developing countries participated actively. Th e result has been that 
some areas of particular export interest to many developing countries, such as agriculture and light 
manufactures, have not found their way to the centre of the negotiations. To achieve greater balance, 
the large countries – both develope d and developing – w ill have to assume the lead in tackling the 
most distortionary aspects of their trade regimes. That is the promise of the Millennium Declaration, 
of Doha and of the Monterrey Consensus – and it is now time to act. 
9. But other countries must play their part too and fully engage in the multilateral trading 
system. Engagement means taking on both rights an d obligations. An excessive focus on rights leads 
to self-exclusion and will eventually undermine the progress made by developing countries in finding 
their voice and in beginning to shape the system its elf. To my mind, it would take the "development" 
label away from the Doha Development Agenda.  WT/GC/M/89 
 Page 29 
 
 
 10. In practice, countries around the world have made  a clear choice to integrate into the world 
economy. Over the past two decades,  across much of the developing world, trade barriers have come 
down. This has yielded benefits: the developing co untries’ share in global trade has risen by around 
10 percentage points since 1990, to more than 30 pe rcent today. In trade negotiations, opening up is 
called a "concession," but it should be seen for what it is: a step that benefits societies that take it. And 
multilateral liberalization offers still greater gains.  Carrying out further liberalization within the 
framework of the WTO would provide the additional be nefits of transparency and predictability, and 
would give countries leve rage in negotiations.  
Building coherence 
 11. The Doha Development Agenda has set ambitious  goals. Its aim is not only to reduce trade 
barriers and strengthen rules, but to promote grow th and poverty reduction in developing countries. 
Trade has indeed been a powerfu l force driving growth, and grow th has produced unprecedented 
reductions in global poverty. But clearly, the link be tween trade policy, trade and long-run growth is 
not automatic, but requires a supportive environment.  
12. At the most general level, coherence in global policymaking should aim to promote a strong 
global economy. If global growth is weak, trade inte gration cannot make its c ontribution to generating 
sustained growth in the developing countries. Th e recent, robust recovery in the world economy has 
been encouraging. But its longer-term prospects w ould be improved further by progress in addressing 
global current account imbalances. This is a global problem and the solution requires efforts by many 
countries.  
13. But even with a favourable global environment not  all countries have been able to take full 
advantage of the opportunities of global trade. And so me have been reluctant to face the risks and 
adjustment costs of greater integration. Coheren ce in the work of the WTO, the World Bank and the 
IMF can play a critical role in meeting these challenges.  
14. At the IMF, we have been doing all we can to support countries’ efforts to integrate into the 
multilateral trading system. Earlier this year, A nne Krueger presented our new initiative to you, the 
Trade Integration Mechanism, which we hope will he lp reassure those countries concerned about the 
short-term costs of trade liberalization. In our view , a solution had to be found for countries that are 
vulnerable – for instance, to preference erosion or food terms of trade shocks – without damaging the 
opportunities for the many others – nor, over the longer term, themselves.  
15. The Trade Integration Mechanism addresses part of  this problem. It gives affected countries 
an additional lever in dealing with vulnerabilities,  while allowing developing countries as a whole to 
reap the benefits of improved conditions for their exports. The mechanism is directed at the possible 
balance of payments impact of liberalization by other  countries, agreed in the context of the WTO or 
implemented unilaterally on a non-discriminatory ba sis. Under the mechanism, the IMF will support 
members in identifying the nature and size of thes e shocks and in designing appropriate adjustment 
policies. The IMF will also provi de financial assistance to help address any related balance of 
payments problems.  
16. In July, Bangladesh became the first country  to obtain funding in  accordance with this 
mechanism. This will help Banglad esh address the expected pressure on its balance of payments from 
the forthcoming liberalization of textiles quotas under the Agreement on Textiles and Clothing. 
17. Fund surveillance has also evolved in respon se to the new challenges that have been 
highlighted by the Doha Round. Since the start of  the Round there has been a significant focus, in 
Article IV consultations, on trade policies in the la rger industrial economies that have a wider impact 
on the prospects for other, especially poorer countri es. In its review of surveillance last July the WT/GC/M/89 
Page 30  
 
 Fund’s Executive Board reconfirmed and welcomed th is approach. We have also moved to assess and 
discuss trade policies increasingly in a regional context. This has been particularly true of our work in 
Africa. Trade policies formed an important part of the recently published Sub-Saharan Africa Regional Economic Outlook. The report finds that Africa can benefit from regional integration 
initiatives, if well-designed and in the context of multilateral liberalization, and urges corresponding 
efforts to promote greater participation in global trade. 
18. Technical assistance is another area in which the Fund has, since the last General Council 
meeting on Coherence, further stepped up its cap acity to provide support. The IMF has provided 
trade-related technical assistance in two main areas, customs administration and tariff policy – the latter almost always in the context of a wider ta x reform. Progress on both fronts is commonly needed 
to secure an effective liberalization of trade wh ile safeguarding public reve nues. Fund experts have 
fielded 25-30 missions in these areas in each of the last couple of years. New regional technical assistance centres in Africa and the Middle East, s upplementing the ones we have in the Caribbean 
and the Pacific Islands, have allowed us to  move closer to our member countries.  
19. In this context, we would be happy to res pond to the General Council’s call for cooperation 
on trade facilitation as expressed in the August decision. In fact, a first expert-level meeting took 
place yesterday here in Geneva to assess the potential for support. 
20. A final area that we have strengthened specifi cally with a view to the Doha Round is trade-
related research. Let me just mention to you some of  the results since they seem quite pertinent to a 
discussion of coherence in international policymaking. 
• One recent study had been requ ested by the Working Group on Trade, Debt and Finance and 
reviews the impact of exchange rate volatilit y on trade. The study concludes that, while 
exchange rate fluctuations have increased in  times of currency and balance of payments 
crises, there has not been any increase, on av erage, in exchange rate volatility between 
the 1970s and the 1990s. And more important ly perhaps, there is no strong and robust 
evidence that exchange rate volatility has a nega tive effect on trade flows. This suggests that, 
from the perspective of enhancing trade, excha nge rate volatility may not be a major concern. 
 
• Another study examined preference margins and the possible impact of preference erosion on 
developing country export revenues.  It finds that vulnerability to preference erosion is heavily 
concentrated in a sub-set of products, especia lly sugar and bananas. Accordingly, assistance 
to help countries cope with preference erosi on can and should be closely targeted at the 
countries at risk.  
 
21. Let me briefly turn to cotton. The August frame work agreements call for consultations with 
the Fund and other agencies to di rect resources toward developm ent of the economies where cotton 
has vital importance. We are, of course, more than  willing to join such co nsultations. The Fund has 
traditionally played a major role in assisting developing countries in dealing with the macroeconomic implications of commodities price or other shocks , including in the cotton sector. Should such shocks 
have an adverse impact on the balance of paym ents, Fund assistance could be delivered through our 
regular instruments and policies – notable the Poverty Reduction and Growth Facility. 
22. Our working relationship with the WTO, at the management and staff levels, continues to be 
excellent as highlighted in the Secretariat’s background paper. Let me merely add that the 
effectiveness of our cooperation could be further enhanced if F und observership in the negotiating 
bodies created in Doha were confirmed. By providi ng our staff with a more immediate sense of the 
needs and demands of the WTO membership, observer status would make it easier for us to respond 
and be supportive.   WT/GC/M/89 
 Page 31 
 
 
 Concluding remarks 
 
23. As this audience knows better than most, trade is  a powerful tool for progress. What is more, 
it is a means for people to help themselves. Ensu ring that the poor have every possible chance to 
participate in trade, and directing our assistance to enable them to do so, is not only morally right but 
makes economic sense. Removing the vestiges of protecti onism is not charity – it is in each country’s 
own interest to do so.  
24. Success requires a clear commitment to the sp irit of the rules-based multilateral trading 
system and to more open trade regimes on the pa rt of all countries. Economic development and 
poverty reduction are served not only by better market access abroad, but  also – and perhaps above all 
– by a willingness to embrace trade as part of a dom estic development agenda. Coherence begins at 
home. 
25. This larger vision has doubtless inspired the initiation of the Doha round. Yet driving the 
round to a satisfactory conclusion requires determined  political leadership in order to provide the 
negotiators with the political mandate for results . There must be a readiness to move beyond the 
mercantilist exchange of concessions that has driv en negotiations, and to make progress in areas in 
which domestic political resistance has held back progress in the past.  
26. Mr. Chairman, working together the international community has an opportunity through 
more open trade policies to promote development and help the world’s poor. Financial uncertainties 
linked to reform should not have to deter WTO me mbers from engaging fully in the Doha process. 
This is where the IMF intends to play its part. WT/GC/M/89 
Page 32  
 
 Annex 3
 
 
Statement by Dr. Supachai Panitchpakdi,  
Director-General of the World Trade Organization  
 
 
1. I first want to welcome Rodrigo de Rato a nd Jim Wolfensohn, and to express my sincere 
gratitude for your friendship, leadership and advice.  This is the second year in a row that the heads of 
the IMF and the World Bank have travelled to Gene va to attend a WTO meeting on Coherence.  Your 
presence sends a powerful message, not just about the importance of coherence among our 
institutions, but about your commitment to the multila teral trading system and the success of the Doha 
negotiations. 
2. I think we can all agree that these negotiations are one of the most important issues on the 
global economic agenda.  As was emphasised at th e recent Bank/Fund Annual Meetings, the current 
economic recovery is broad but fra gile.  We have a window of opportunity to deepen structural 
reforms, strengthen global markets, and ensure that  the current expansion is sustainable.  Nothing 
would contribute more to its sustainability than further opening world markets and strengthening trade 
rules under the Doha Round. 
3. The outlook for the WTO has changed significan tly since the summer.  The July General 
Council Decision has put the Doha negotiations back on track, and eased many of the concerns we felt 
in the aftermath of Cancún.  It represents an impor tant step forward in the Round – and has injected 
new momentum into the Geneva process – but it is not  an end in itself.  This Round will be judged, 
not by what we say today, but by what we achie ve at the end of the negotiations.  Success – as the 
IMFC communiqué reminds us – "will require the full co mmitment of all parties, in particular strong 
leadership from the major trading nations, and r eadiness of all countries to embrace the opportunities 
provided by more open trade". 
4. Cooperation among the three major international economic institutions has never been more 
critical.  At the last Coherence meeting, Members encouraged us to focus our cooperation on three areas in particular – policy analysis and advice, t echnical assistance, and adjustment assistance.  Let 
me highlight three concrete areas where progress is being made – the details of which can be found in 
the background document for this meeting. 
5. First, the Trade Integration Mechanism.  Last May, Anne Krueger briefe d us on this new IMF 
policy, and explained that financial assistance woul d be available to low income developing countries 
to help them cope with adjustment difficulties ar ising from loss of trade preferences in the Doha 
Round, as well as from the elimination of textile quotas at the start of next year.   The task now is for the Secretariat to continue working closely with IMF staff to help WTO Members to evaluate the 
opportunities presented by the Trade Integration Mechanism. 
6. Second, the Cotton Initiative.  The July Decisi on explicitly calls on the WTO to work closely 
with the IMF, the World Bank, and other interna tional financial institutions  on development aspects 
of the Sectoral Cotton Initiative.  Let me use this opportunity to ask my friends, Rodrigo and Jim, to redouble their efforts to see how existing progra mmes – as well as additional resources – can be 
directed towards development in those economies wh ere cotton is vitally important, as we agreed in 
Cotonou. 
7. Third, Trade Facilitation.  The July Decision also invites the IMF and the World Bank to 
cooperate with the WTO to make technical assi stance and capacity building more effective and 
operational in support of the negotiations on trade f acilitation, which were launched this summer.  The 
World Bank, in particular, has done excellent work in examining the costs of excessive red-tape for  WT/GC/M/89 
 Page 33 
 
 
 developing countries trying to encourage trade and in vestment – and I think this is an area where there 
is huge potential for synergies among our institutions. 
8. I have mentioned three areas where the WTO is looking for – and receiving – tangible support 
from the Bank and the Fund.  Let me also draw yo ur attention to an area where the IMF and the 
World Bank are looking for support from the Genera l Council.  A positive response by the WTO to 
requests for observer status in the TNC and its s ubsidiary bodies would give the IMF and the World 
Bank first-hand information on where their contribut ion to the success of the Doha negotiations can 
most usefully be made.  Already they contribute actively to the work of many councils, committees 
and working groups of the WTO.  Extending their observer status to the TNC would be a logical step – and would certainly add to the level of coherence of  our work, in particular to lend full support to 
the DDA. 
9. I want to conclude with the observation th at these General Council Meetings on Coherence 
are obviously increasingly important – as underscored by the presence of Rodrigo de Rato and Jim Wolfensohn today.  But there is also growi ng value in having on-going work on Coherence at the 
technical level in the Working Group on Trade, Debt and Finance.  Two Coherence issues – trade 
financing and exchange rate volatility – have already b een usefully taken up at a technical level in the 
Group.  I also note that Coherence is on the agenda  for the Group's December meeting.  As we begin 
today's discussions, I encourage Members to think about how we can build further on this progress. 
 
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