WORLD TRADE
ORGANIZATIONWT/TF/COH/S/6
26 March 2003
(03-1732)
COHERENCE IN GLOBAL ECONOMIC POLICY-MAKING:
WTO COOPERATION WITH THE IMF AND THE WORLD BANK
Report (2002) by the Director-General1
1. This report has been prepared pursuant to paragraph 2 of the General Council Decision on
"Agreements Between the WTO, the IMF and the World Bank"2, to inform Members about the
activities carried out by the WTO under its cooperation agreements with the IMF and the World
Bank..
2. The Director-General has identified as one of his priorities increased attention by the WTO to
promoting greater coherence in global economic policy-making and co-operating with other
intergovernmental organizations to support WTO Members’ activities carried out pursuant to theDoha Ministerial Declaration.  He has noted also that the Doha trade negotiations and work
programme complement two other major international initiatives related to global economic policy-
making, the Monterrey Consensus on Financing for Development and the Johannesburg Plan of
Implementation stemming from the World Summit on Sustainable Development.  Each has an
important contribution to make to meeting the UN Millennium Development Goals, and the WTO, theIMF and the World Bank have complementary roles to play in helping implement them.
3. WTO cooperation with the IMF and the World Bank has expanded since the Doha Ministerial
Conference.  The Doha trade negotiations and work programme have substantially increased the
WTO’s attention to development issues and to the linkages between trade and financial policies.
Equally, the Executive Boards of both the IMF and the World Bank have increased the attention theypay to trade issues and the multilateral trade negoti ations in the context of their work on strengthening
the financial architecture, the HIPC initiative, and more generally on economic growth and poverty
reduction.
A. C
ONSULTATIONS BETWEEN THE DIRECTOR -GENERAL AND THE MANAGING DIRECTOR OF 
THE IMF AND THE PRESIDENT OF THE WORLD BANK
4. The Director-General attended the IMF/World Bank Annual Meetings in Washington in
September 2002, including the meetings of the International Monetary and Finance Committee andthe Development Committee.
3  Shortly afterwards he met the Managing Director of the IMF and the
President of the World Bank in Geneva, and briefed them on progress in the Doha trade negotiations
and work programme.
5. The Managing Director of the IMF and the President of the World Bank raised as a matter of
concern with the Director-General their requests for observer status in the TNC and its subsidiary
                                                     
1 The last report is contained in WT/TF/COH/S/5 of 10 October 2001.
2 WT/L/194 of 18 November 1996.
3 Relevant extracts from the communiqués have been circulated in WT/TF/COH/12 of 3 October 2002.WT/TF/COH/S/6
Page 2
bodies, which are still pending.  Under the terms of the WTO/IMF/World Bank cooperation
agreements, it has been agreed that "The WTO shall invite the Fund/the World Bank to send a
member of its staff as an observer to the meetings of the Ministerial Conference, General Council, …
and their subsidiary bodies (excluding the Committee on Budget, Finance and Administration, the
Dispute Settlement Body, and dispute settlement panels)".4  The Director-General has agreed to do
what he can to help resolve this issue.
6. The Managing Director of the IMF and the President of the World Bank stressed the
importance they attach to achieving substantial mu ltilateral trade liberalization from the current round
of negotiations for the benefit of global economic growth, development, and in particular poverty
reduction, and to help strengthen structurally the world economy and make it more resistant to crisis.
Empirical work by IMF and World Bank staff show that the emerging market economies and
developing countries could receive the greatest boost from successful multilateral trade liberalization,particularly in areas such as agriculture, and that the resources generated could far outweigh those
available from other international initiatives, such as debt relief or foreign aid.
7. The IMF Managing Director informed the Director-General that the IMF was upgrading its
surveillance of factors underpinning economic growth, including trade liberalization, and encouraging
governments to undertake economic reforms, including trade reform, on a properly sequenced basis.The President of the World Bank informed the Director-General that he had recently created a new
trade department which would help bring together trade-related aspects of the Bank’s research, its
training and technical assistance and capacity-building activities, and its country programmes.  The
Director-General and the World Bank President agreed to develop a new joint strategy for staff
cooperation, which will be reviewed every six months.
8. The Director-General noted that priority areas for cooperation in his view continued to be
trade-related technical assistance and capacity-building, including the Integrated Framework, as well
as issues that span the responsibilities of the three organizations which are raised by Members in
WTO bodies.
B. WTO O
BSERVERSHIP IN IMF AND WORLD BANK MEETINGS
9. Under the WTO/IMF/World Bank cooperation agreements, the WTO Secretariat is invited to
observe meetings of the Executive Boards of the IMF and the World Bank on general and regional
trade policy issues, including the formulation of Fund or Bank policies on trade matters.  In 2002, the
Secretariat attended two meetings of the IMF Executive Board Liaison Committee with the WTO
(CWTO) which monitors IMF/WTO relations and IMF work on trade issues.  It attended Executive
Board meetings in the IMF on "World Economic Outlook", which included a chapter on trade and
financial integration, and in the World Bank on "Leveraging Trade for Development" and "GlobalEconomic Prospects for Developing Countries", which in part covered international agreements to
improve investment and competition for development.  The Secretariat also attended Executive Board
discussions on a joint IMF/World Bank study on "Market Access for Developing Country Exports –
Selected Issues", which drew on WTO work and was subsequently circulated for information to the
WTO Working Group on Trade, Debt and Finance.
5
10. In December 2002, Deputy Director-General Thom pson-Flôres participated on behalf of the
Director-General in a World Bank Executive Board meeting chaired by Mr. Wolfensohn to review the
Bank’s work on trade issues.  The meeting endorsed the view that trade liberalization is very
important for economic growth, and economic growth is vital for poverty reduction.  It also endorsed
the view that trade-related capacity building that is well-integrated into individual country
                                                     
4 WT/L/195, Annex I, paragraph 6, and Annex II, paragraph 5.
5 WT/WGTDF/W/14 of 18 October 2002.WT/TF/COH/S/6
Page 3
programmes for development and poverty reduction is a particularly important contribution that the
Bank can make in support of WTO Members’ participation in the multilateral trading system and in
the Doha trade negotiations and work programme.
11. In September, WTO staff updated the annual World Bank/Commonwealth Secretariat’s
"Small States Forum" on developments under the Doha work programme on trade of small
economies.
C. IMF AND WORLD BANK PARTICIPATION IN WTO M EETINGS
12. Under the cooperation agreements, the IMF and the World Bank are invited to attend as
observers meetings of most WTO bodies.  Requests from the IMF and the World Bank for observer
status in the TNC and its subsidiary bodies are still pending (see above, paragraph 5).
13. The IMF participates in all regular consultations of the Committee on Balance-of-Payments
Restrictions.  In 2002 it was called on also to provide input to the BOP Committee’s work onImplementation issues.
14. As agreed by the GATS Council,  the World Bank participated in a seminar in March on the
assessment of trade in services, and a joint WTO-World Bank Symposium on the movement of
natural persons was held in April. The IMF made a presentation to the Committee on Trade in
Financial Services on the joint IMF/World Bank Financial Sector Assessment Programme in July.The World Bank participated in a WTO seminar on market access in May, in a symposium on
transparency in government procurement in October, and in a meeting of the Working Group on
Trade and the Transfer of Technology in November to present World Bank studies on the impact of
trade-related technology diffusion on total factor productivity.  IMF and World Bank staff participated
in a seminar on technical assistance on customs valuation in November.
15. IMF and World Bank staff have contributed to analytical work of the Working Group on
Trade, Debt and Finance, providing a number of oral briefings and written submissions on issues
concerning the relationship between trade, debt and finance.  The IMF has briefed the Group on its
financing facilities and conditionality, its recent initiatives in the area of crisis prevention including
the use of prudential standards, and the HIPC initiative.
6  It also submitted papers on trade and
finance, on trade and financial integration, and on market access for developing country exports. The
World Bank provided submissions on the HIPC initiative and the Bank’s framework for poverty
reduction, as well as analysis of the links between these initiatives and its work on trade policy.  The
Working Group is a focal point for the discussion of issues spanning the areas of responsibility of the
IMF and the World Bank.  In 2002, these included exchange rate volatility and trade, commodity
price volatility and export shortfalls, trade-finance facilities for developing countries, the revenue
effects of tariff liberalization, and financial support for the adjustment costs of trade reform.
D. RESEARCH , ANALYSIS AND DATA EXCHANGE
16. Staff of the three organizations collaborate on research and analysis in areas where trade,
finance and development issues overlap.  As noted above, IMF and World Bank staff covered trade
                                                     
6 The IMF provides financial assistance to member countries with temporary balance-of-payments
problems to enable the member to rebuild reserves or to make larger payments for imports and other externalpurposes that would not otherwise have been possible.  Regular financing facilities are credit tranches, typically
with a duration of 12-18 months, and the Extended Fund Facility for longer term assistance to support structuralreforms that address longer-term balance-of-payments di fficulties.  Several special facilities are available too.
Low income members can avail themselves of concessional loans under the Poverty Reduction and Growth
Facility, and grants or concessional loans under the Highly Indebted Poor Countries (HIPC) Initiative.
(WT/WGTDF/W/2).WT/TF/COH/S/6
Page 4
and trade-related issues in several studies prepared for their Executive Boards in 2002, and they have
responded positively to requests from WTO bodies, particularly the Working Group on Trade, Debt
and Finance, for studies on issues relating to their areas of responsibility.  In July 2002, the World
Bank issued its handbook for trade negotiators:  "Development, Trade and the WTO".
17. The Director-General met in August with th e Deputy Managing Director of the IMF, and
requested her support for research and analysis by IMF staff on a number of issues relating to the
Doha trade negotiations and work programme.  Studies have subsequently been received from the
IMF, and circulated to Members, on the following topics:  "Trade Restrictions for Balance-of-
Payments Purposes", "Financing of Losses from  Preference Erosion", Export Financing and Duty
Drawbacks", and "Liberalizing Trade and Safegu arding Public Revenues" (WT/TF/COH/13, 14, 15
and 16).
18.  The WTO Secretariat provides the IMF and World Bank staff with access, on a confidential
basis, to the Integrated Database and to final schedules of commitments of WTO Members.  Under
the terms of a new dissemination policy adopted by the Committee on Market Access in June 2002,
the IMF and World Bank now have online access to the two data bases.
19. Subject to the same confidentiality requirement, the Fund makes available to the WTO
Secretariat the publications files of the International Financial Statistics, Balance of PaymentsStatistics, Government Financial Statistics, and Direction of Trade Statistics.  The IMF staff also
makes available to the WTO Secretariat historical data and aggregate projections in the "World
Economic Outlook".  Favourable consideration is given to specific additional requests pertaining to
these data bases, as well as requests for projections of individual country data.  The World Bank
provides the WTO Secretariat access to the Bank’s Economic and Social Database, as well as theStatistical Annex of the Global Economic Prospects and the Developing Countries.  In its support on
Market Access issues, the WTO Secretariat has been making use of World Bank software to analyse
tariff and trade data.  This software is offered by the World Bank to WTO Members free of charge.
20. Under the WTO/IMF cooperation agreement, the IMF makes available to the WTO, for the
confidential use of the WTO Secretariat, copies of IMF staff reports and related background staffpapers on Article IV consultations and on use of Fund resources for common members and on Fund
members seeking accession to the WTO, subject to the consent of the member concerned.
7  Th e s e
documents contain details of the IMF's trade policy advice and conditionality, which are used by the
WTO Secretariat for reference purposes, notably in the course of the preparation of TPR reports.
E. TECHNICAL COOPERATION
(a) The Integrated Framework for Le ast-Developed Countries (LDCs)
21. The IMF and the World Bank are two of the six core agencies involved in the Integrated
Framework for Trade-related Technical Assistance to Least Developed Countries (IF).  The IF aims to
assist LDCs to mainstream trade into their national development plans such as their strategies for
poverty reduction and to assist in the coordinated delivery of trade-related technical assistance.  The
World Bank is the designated agency for trade mainstreaming.  The starting point for this process is
the preparation by each LDC involved of a Diagnostic Trade Integration Study (DTIS), whichidentifies trade reform and technical assistance priorities.  In 2002, of the fourteen  LDCs to which the
"revamped" IF has been extended, pilot DTIS studies were completed for Cambodia, Lesotho,
Madagascar, Malawi, Mauritania, Senegal and Yemen and initiated for Burundi, Djibouti, Ethiopia,
                                                     
7 The IMF also communicates to the WTO its Executive Board Decisions regarding exchange
restrictions maintained by its common Members under Article VIII of the Fund's Articles of Agreement.  These
are circulated as restricted docum ents under the symbol WT/TF/IMF/-.WT/TF/COH/S/6
Page 5
Guinea, Mali and Nepal.  Completion workshops were held in 2002 for Cambodia, Mauritania and
Senegal while Lesotho held its National Workshop on 12 February 2003.    Moreover, progress was
made in the follow-up activities in each of the five LDCs where trade-related round tables have taken
place under the old Integrated Framework scheme : Bangladesh, The Gambia, Haiti, Tanzania and
Uganda.  Overall in 2002, the IF process  has led to a deepening of development partners' focus on therole of trade in their overall development assistance to LDCs as well as assisted LDCs in their efforts
to re-position trade in their overall development strategy.
(b) WTO Training Institute
22. The World Bank continues to contribute to the three-month Trade Policy Courses held in
Geneva through presentations by its staff and dissemination of its publications to course participants.
IMF staff also contribute to the courses.
23. In 2002, the World Bank made a substantial financial contribution towards the two ad hoc
three-month regional training courses organised by the WTO for African countries in Morocco and
Kenya.
(c) The Standards and Trade Development Facility
24. The new Standards and Trade Development Facility was launched in 2002, with financial
support of $300,000 from the World Bank.  The Facility will provide capacity-building and technicalassistance in developing and applying standards and regulations for food safety and animal and plant
health, in partnership with the FAO, WHO and international standard setting organizations.
(d) Training Programme on the Legal Aspects of International Trade.
25. This programme, organized jointly by the Legal Department of the World Bank, the World
Bank Institute and the WTO Training Institute, is aimed at facilitating regular exchanges amongstdeveloping country trade officials and trade experts on issues of international trade, promoting mutual
understanding of the legal aspects of international trade, and facilitating development of strategies
consistent with international trade rules to pr omote the trade agenda.  Operating since 2001, the
programme in 2002 consisted of a series of video-conferences involving World Bank staff and the
WTO Secretariat, and officials from Brazil, Uganda, Ghana, Albania, Latvia, Georgia, Peru andMexico.  This project is currently being reviewed.
(e) Joint Vienna Institute
26.  The WTO Secretariat works with the IMF, the World Bank, BIS, OECD, EBRD and the
Austrian Government as co-sponsors of the Joint Vienna Institute (JVI), established in 1992 to
provide training support largely for countries making the transition from centrally-planned to market-
based economies, although other countries are also involved.  The WTO Secretariat continued its
training activities at the JVI in 2002.  The WTO is  responsible for the two-week segment of the
Applied Economic Policy course, and the segment was given twice in 2002.  In addition, the WTO
organized two seminar courses on trade policy in the summer and in the fall of 2002.
27. Building on the success of the training activities of the Institute, the Austrian Government
proposed in 2002 transforming the JVI into a permanent training institution.  The Director-General
has held discussions with the Managing Director of the IMF on this.  The Institute will formallychange its status in 2003.WT/TF/COH/S/6
Page 6
(f) Trade and Development Centre
28. Since 1997, the WTO and the World Bank Institute have maintained a shared website
providing development-related trade information.  The site also provides a point of contact for trade
officials in developing and transition economies, including officials who have participated in WTO
and World Bank training courses.
F. GENERAL CONTACTS PURSUANT TO PARAGRAPH 10 OF THE IMF A GREEMENT AND 
PARAGRAPH 8 OF THE WORLD BANK AGREEMENT
29. Pursuant to Article 10 of the WTO/IMF cooperation agreement, the WTO Secretariat and the
IMF staff consult, as necessary, on issues of possible inconsistency between measures under
discussion with a common Member and that Member's obligations under the WTO Agreement, and
on issues of possible inconsistency between measures under discussion with a common Member and
that Member's obligations under the Fund's Articles of Agreement.  Both the WTO Secretariat and theIMF staff take care to ensure that cooperation in this area is conducted in such a way as to respect
fully the separate mandates, confidentiality requirements and the necessary autonomy in decision-
making procedures of the two organizations, and that cooperation does not result in cross-
conditionality nor extra conditions on WTO Members.
30. The exchange of views and information on trade and trade-related issues is an important
requirement for greater coherence in policy-making, and the three organizations continue to draw
extensively on each other’s work and expertise.  Many WTO Secretariat documents rely on inputs
from the IMF and the World Bank on macroeconomic, trade, and social developments.  Similarly, the
IMF and the World Bank use information on trade, trade measures and related issues from WTO
sources, particularly to ensure that their policy advice is consistent with WTO rules.
G. L
EAST DEVELOPED AND NET FOOD-IMPORTING DEVELOPING COUNTRIES
31. In the context of the implementation of the Marrakesh Ministerial Decision on Measures
Concerning the Possible Negative Effects of the Reform Programme on Least Developed and Net
Food-Importing Developing Countries (Marrakesh NF IDC Decision), Ministers in Doha established
the Inter-Agency Panel on Short-Term Difficulties in Financing Normal Levels of CommercialImports of Basic Foodstuffs.  The Panel’s terms of reference were agreed by the Committee on
Agriculture in December 2001 and approved by the General Council in February 2002.  The Panel,
with the participation of staff from the World Bank, the IMF, FAO, the International Grains Council
and UNCTAD, submitted its report to the General Council in June.  The General Council approved
the Panel’s recommendations in October.
8   The Chairman of the WTO General Council subsequently
wrote to invite the IMF Managing Director and the President of the World Bank to review the Panel
report as it relates to issues within their respective mandates.
32. As in past years, the IMF and the World Bank made substantive contributions to the annual
monitoring exercise of the Marrakesh NFDIC Decision by the WTO Committee on Agriculture in
November.
__________
                                                     
8 WT/GC/62;  G/AG/13 of 28 June 2002, paragraph 168.