WORLD TRADE  
ORGANIZATION  WT/TF/COH/S/8 
12 February 2004 
 
 (04-0554) 
  
  
 
COHERENCE IN GLOBAL ECONOMIC POLICY-MAKING: 
WTO COOPERATION WITH THE IMF AND THE WORLD BANK 
 
 
Report (2003) by the Director-General
1 
 
 
1. This report has been prepared pursuant to pa ragraph 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 cooperati on agreements with the IMF and the World Bank. 
2. WTO cooperation with the IMF and the World Ba nk continued to expand in 2003 in support 
of the Doha trade negotiations and work progra mme, which have increased the WTO’s attention to 
development issues and to the linkages between trade and financial policies.  The Executive Boards of 
the IMF and the World Bank have increased the atten tion they pay to trade issues and the multilateral 
trade negotiations in the context of their work  on economic growth and poverty reduction, debt 
sustainability and financial stability.   
3. Reflecting this, Mr. Horst Köhler, the Managing Director of the IMF, and 
Mr. James Wolfensohn, the President of the World Bank, accepted the Director-General's invitation to 
participate in the General Council meet ing on Coherence held on 13 May 2003.3  Both underscored 
the urgency that their organizations attached to progress being made in the trade negotiations, 
particularly the need for improved market access an d reduced trade distorting policies in agriculture.  
The main theme of the meeting was establishing lo ng-term coherence between governments' trade, 
finance and development policies, at the domestic level and at the multilate ral level, with support 
from the three organizations in providing high qu ality policy analysis, technical assistance and 
capacity building, and adjustment assistance.  Among the issues that Members felt warranted attention 
in this context, in developing and least-developed c ountries, were the erosion of preference margins as 
a result of multilateral liberalization, the fiscal effects of tariff liberalization, the timing and 
sequencing of reforms to trade and other economic  policies, and improving the availability and 
affordability of trade financing, particularly in periods of financial instability and crisis. 
4. At the Fifth Ministerial Conference in Cancún,  the IMF announced that it was preparing an 
initiative to provide financial support in the contex t of IMF-supported programmes to Members that 
face a net negative impact on their balance of payments as a result of implementation of the results of 
the Doha Round.  The World Bank announced a new trade assistance programme – the "Doha 
Development Initiative" – to assist poor countries to take advantage of new market opportunities and 
offset any adverse initial impacts of trade reforms stemming from the Doha Round.  It envisaged that 
the programme would have three components – ne w resources devoted to trade logistics (e.g. 
transport costs) and trade facilitation, enhanced se ctoral lending in support of programmes designed to 
                                                      
1 The last report is contained in WT/TF/COH/S/7 of 10 March 2003. 
2 WT/L/194 of 18 November 1996. 
3 WT/GC/M/79 of 25 June 2003.  The background document for the meeting is contained in 
WT/TF/COH/S/7, which was prepared by the Secretariat in consultation with staff of the IMF and World Bank. WT/TF/COH/S/8 
Page 2  
 
 protect workers and vulnerable groups, and progra mme lending over sustained periods for countries 
implementing development-rela ted Doha trade reforms. 
A. C
ONSULTATIONS BETWEEN THE DIRECTOR -GENERAL AND THE MANAGING DIRECTOR OF 
 THE IMF  AND THE PRESIDENT OF THE WORLD BANK 
5. Opportunities for consultations at the heads- of-agency level arose at the General Council 
meeting on Coherence in May, at meetings of the International Monetary and Finance Committee 
(IMFC) and the Development Committee, at ECOS OC and other intergovernmental meetings.  
Attention in these consultations focused on actions that  could be taken to help advance the Doha trade 
negotiations and work programme, including m obilizing the active support of Finance and 
Development Ministers given the acknowledged benef its that a successful conclusion to the Doha 
Development Agenda can bring in their areas of responsibility. 
6. One result of these consultations was initiatives by Mr. Köhler and Mr. Wolfensohn in their 
respective organizations to offer enhanced techni cal and financial support fo r implementation of the 
results of the Doha Round, building on what their organizations were already doing (see paragraph 4 
above).4  Their initiatives were taken in light of the view that adjusting to a more liberal trade 
environment may impose costs on some member countries – albeit temporarily – as a result of 
preference erosion, the loss of tariff revenue and other factors. 
7. A second result was an initiative involving Dr. S upachai and Mr. Köhler to convene a group 
of experts and practitioners to examine ways of im proving the availability and affordability of trade 
financing for developing countries, particularly in periods of financial inst ability and crisis.  This 
initiative, and the possibilities for follow-up in the WTO, have been described by the Director-
General to the General Counc il meeting in February 2004. 
8. At the Annual Meetings of the IMF and the Worl d Bank, shortly after the Cancún Ministerial 
Conference, the IMFC invited Mr. Köhler and Mr. Wolfensohn to write jointly to Heads of State 
stressing the urgent need to move forward with  the Doha Development Agenda.  The Director-
General forwarded copies of this lette r to WTO Ambassadors on 20 November 2003. 
9. Following the Cancún Ministerial Conference, in  the context of the Cotton Initiative, the 
Director-General initiated contacts between the WTO, the World Bank and the IMF.  The WTO 
Secretariat is identifying the role played by th e Bank and the Fund in addressing problems of the 
cotton sector in certain exporting Member countries and considering what cooperative efforts might 
be made to address the trade restricting and distorting effects of subsidies. 
10. An issue of concern that Mr. Köhler and Mr . Wolfensohn have conveyed to the Director-
General on several occasions is that the requests of their organizations for observer status in the TNC 
and its subsidiary bodies are still outstanding.   
B. WTO  OBSERVERSHIP IN IMF  AND WORLD BANK MEETINGS  
11. Under the cooperation agreements, the WTO Secretar iat 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.   
12. In addition in 2003, the Secretariat attende d two meetings of the IMF Executive Board 
Liaison Committee with the WTO (CWTO) which monitors IMF/WTO relations and IMF work on 
                                                      
4 A joint letter to the Director-General on this po int from the Managing Director of the IMF and the 
President of the World Bank was circulated to Members in August 2003 in JOB(03)/173.  WT/TF/COH/S/8 
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 trade issues.  In May, the CWTO addressed thr ee topics, based on the April IMFC Communiqué:  
renewed efforts to address obstacles to progress under  the Doha Round, how to react to the Director-
General's call for technical and financial support for ambitious trade policy reforms under the Doha 
Round, and the implications of increasing convergen ce of the IMF and WTO agenda in areas such as 
financial services and investment.  In November, the CWTO met to assess the state of play of the 
Doha Round post-Cancún. 
C. IMF  AND WORLD BANK PARTICIPATION IN WTO  MEETINGS  
13. Under the cooperation agreements, the IMF a nd the World Bank are invited to attend as 
observers meetings of most WTO bodies.  Request s from the IMF and the World Bank for observer 
status in the TNC and its subsidiary bodies are still pending. 
14. The IMF participates in all regular consulta tions of the Committee on Balance-of-Payments 
Restrictions.  No consultations we re held in the course of 2003. 
D. RESEARCH , ANALYSIS AND DATA EXCHANGE  
15. Staff of the three organizations collaborate on research and analysis in areas where trade, 
finance and development issues overlap.  IMF and World Bank staff covered trade and trade-related 
issues in several studies prepared for their Execu tive Boards in 2003, 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.  One such study is an update of a 1984 study by the IMF on "Exchange Rate Volatility and Trade "(forthcoming).  
16. The Secretariat and World Bank staff cooperate, where appropriate, in the preparation of the 
World Bank annual publication on "G lobal Economic Prospects", which for several years has been 
based around the theme of trade, and the WTO "World Trade Report".  The Secretariat participates in 
a World Bank annual monitoring exercise on achi eving the Millennium Development Goals, 
contributing on indicators to monitor the trade agenda and through its TPR reports. 
17. The WTO Secretariat provides the IMF and World Bank staff with access, on a confidential 
basis, to the Integrated Database and to schedul es of commitments of WTO Members.  The IMF and 
World Bank have online access to the two data bases.   
18. Subject to the same confidentiality requirem ent, the Fund makes available to the WTO 
Secretariat the publication files of the Internati onal Financial Statistics,  Balance of Payments 
Statistics, Government Financial Statistics, and Di rection of Trade Statistics.  The IMF staff also 
makes available to the WTO Secretariat historical data and aggregate projections in the "World Economic Outlook".  Favourable cons ideration 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 the 
Statistical Annex of the Global Economic Prospect s 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.  
19. 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 a nd related background staff 
papers on Article IV consultations and on the use of Fund resources for common members and on WT/TF/COH/S/8 
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 Fund members seeking accession to the WTO, subject  to the consent of the member concerned.
5  
These documents contain details of the IMF's trade policy advice and conditionality, which are used 
by the WTO Secretariat for reference purposes, no tably in the course of the preparation of TPR 
reports.  Trade policy information based on IMF do cumentation is now available to members of the 
Secretariat through an electronic data base. 
E. TECHNICAL COOPERATION  
(a) Trade-Related Technical Assistance and Capacity Building 
20. The World Bank devotes a considerable amount of its lending to trade-related capacity 
building in particular through the PRSP process.  The World Bank Institute addresses mainstreaming 
trade into PRSPs in its workshops held in differe nt regions throughout the year and reviews requests 
contained in the WTO Technical Assistance Plan in developing its own programmes.  The World 
Bank has formed a partnership with the Worl d Customs Organization and the WTO on customs 
reform and trade facilitation.  The IMF, the World Bank and the WTO contribute to the Doha 
Development Agenda Trade Capacity Building Database (http://tcbdb.wto.org) which provides 
information on activities provided by bilateral donors and multilateral agencies.  In the first few years 
of its existence, this pooling of data has allowe d for the possibility of higher degrees of coordination 
and coherence to be achieved and provided the m eans to identify where additional efforts can be 
applied. 
(b) The Integrated Framework for Least-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 na tional development plans such as their strategies for 
poverty reduction and to assist in the coordinated de livery of trade-related technical assistance.  The 
World Bank is the designated agency for trade main streaming.  The starting point for this process is 
the preparation by each LDC involved of a Diagnostic Trade Integration Study (DTIS), which identifies trade reform and technical assistance prio rities.  The DTIS rely heavily on the WTO's Trade 
Policy Review process and the World Bank receives comments on its draft reports from the WTO 
Secretariat.  At the end of 2003, of the fourteen LD Cs to which the "revamped"  IF has been extended, 
DTIS studies were completed for Cambodia, Ethiopia, Guinea, Lesotho, Madagascar, Malawi, Mauritania, Nepal, Senegal and Yemen.  Another eleven countries are at va rious stages in the IF 
process, with World Bank technical review or pr eliminary DTIS missions planned.  The new IF 
website (www.integratedframework.org) is maintained by World Bank staff. 
(c) 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 dissemina tion of its publications to course participants.  
IMF staff also contribute to the courses.  The World Bank contributed both financial and human 
resources to the first three-month Trade Policy Course  held in Nairobi in the middle of 2003.  Four 
regional training courses, funded from the Global Trust Fund, are scheduled for 2004 which will 
benefit from World Bank participation.  As pa rt of strengthening its Geneva office and its 
commitment to supporting the trade agenda, the Worl d Bank has posted a staff member to Geneva to 
coordinate training activities with the WTO Training Institute.   
                                                     
 
5The IMF also communicates to the WTO its Ex ecutive 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 docume nts under the symbol WT/TF/IMF/-.  WT/TF/COH/S/8 
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 (d) The Standards and Trade Development Facility   
23. The Standards and Trade Development Facility  (STDF), launched in 2002 with financial 
support from the World Bank, will provide capacity- building and technical assistance in developing 
and applying standards and regulations for food safet y and animal and plant health.  The purpose of 
the STDF is to facilitate the collaboration between the partner organizations (WTO, FAO, OIE, WHO 
and the World Bank) in SPS-related activities, incl uding through the developmen t of joint institutional 
projects.  In 2003, the WTO dedicated CHF100,000 to this Facility from the Global Trust Fund.  In May, the STDF Working Group met and approved the development of a database that will contain 
information on past and planned SPS technical assist ance and related capacity-building which like the 
WTO/OECD database is designed to avoid duplication and identify gaps.  A website 
(www.standardsfacility.org) has also been established which contains training materials and allows 
for transmission of project proposals from beneficiary countries.  
(e) Joint Vienna Institute 
24. The WTO has been co-sponsoring the Joint Vienna Institute (JVI) which provides training to 
government officials from transition countries.  Othe r sponsors of the JVI include the IMF, the World 
Bank, the BIS, OECD, EBRD and the Austrian Government.  The JVI is also supported by a number 
of other bilateral donors.  The main aim of the JVI is to provide training support to ease the transition 
from centrally-planned to market-based economies,  but other developing countries have also 
participated.  
25. The WTO Secretariat continued to offer its trai ning activities at the JVI in two separate ways.  
The WTO has been responsible for the two-week segment on Trade Policy  which is part of a longer 
course in Applied Economic Policy.  The segment is given twice a year. In addition, the WTO 
organized four seminar courses on trade policy and WTO-related issues in the course of the year. 
26. Given the success of the training activities of the Institute, the Austri an authorities proposed 
in 2002 to transform the JVI into a permanent trai ning institution.  The WTO has decided to join the 
other sponsors in providing future support for the JVI;   the formal change in the status took place in 
November 2003.  The WTO is currently discussing both with the IMF and the Austrian Government 
how to further enhance WTO participation and activiti es at the JVI.  The Director-General has held 
discussions with the Managing Director of the IMF on this issue.  
(f) Trade and Development Centre   
27. Since 1997, the WTO and the World Bank Institu te have maintained a shared website 
providing development-related trade information.  Th e site also provides a point of contact for trade 
officials in developing and transition economies, in cluding officials who have participated in WTO 
and World Bank training courses.   
F. G
ENERAL CONTACTS PURSUANT TO PARAGRAPH 10 OF THE IMF  AGREEMENT AND 
PARAGRAPH 8 OF THE WORLD BANK AGREEMENT  
28. The exchange of views and information on tr ade 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, tr ade, and social developments.  Similarly, the 
IMF and the World Bank use information on trad e, trade measures and related issues from WTO 
sources, particularly to ensure that their po licy advice is consistent with WTO rules. WT/TF/COH/S/8 
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 29. The WTO Secretariat and the staff of the IMF and the World Bank consult, as necessary, on 
issues of possible inconsistency between measures under discussion with a co mmon member and that 
member's obligations under the WTO Agreement or, in the case of the Fund,  under its Articles of 
Agreement.  Staff takes care to ensure that cooperation neither encroach es on institutional mandates 
nor leads to cross-conditionality or extra conditions on WTO Members. 
G. L
EAST DEVELOPED AND NET FOOD-IMPORTING DEVELOPING COUNTRIES  
30. In the context of the implementation of th e Marrakesh Ministerial Decision on Measures 
Concerning the Possible Negative Effects of the Reform Programme on Le ast-Developed and Net 
Food-Importing Developing Countries (Marrakesh NFIDC Decision), Ministers in Doha established 
the Inter-Agency Panel on Short-Term Difficulties in Financing Normal Levels of Commercial 
Imports of Basic Foodstuffs.  The General Council approved the Panel’s recommendations in October 
2002.6    
31. Since then, the Committee on Agriculture he ld consultations on a proposal for the 
establishment of an ex-ante financing facility but  support for this was not forthcoming.  The 
Committee convened an inter-agency r oundtable in May 2003 to explore, inter alia , the need for a 
safety net to be established to assist the LDCs a nd NFIDCs during the reform process leading to 
greater liberalization of trade in agriculture.  The Committee forwarded its report (G/AG/16) to the 
General Council which approved the recommendations in July.  As part of the recommendations 
contained in the report, Members, in their capacity as Members of the IMF, were urged to take into 
account the concerns of LDCs and NFIDCs when  reviewing the Poverty Reduction and Growth 
Facility and the Compensatory Financing Facility of the IMF in 2003.  The World Bank and other 
relevant international organiza tions were requested to advise the Committee on the possibility of 
using commodity price risk management instruments to help stabilize the food import bills of the LDCs and NFIDCs. 
7 
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6 WT/GC/62;  G/AG/13 of 28 June 2002, paragraph 168. 
7 WT/GC/M/81 of 28 August 2003.