RESTRICTED
WORLD TRADE WT/GC/W/68
13November 1997
ORGANIZATION(97-5040)
AGREEMENTS BETWEEN THE WTO AND THE IMFAND THE WORLD BANK
Report bytheDirector-General onImplementation oftheAgreements
1. InNovember 1996 theGeneral Council approved theproposed WTO Agreements withthe
International Monetary Fund (IMF) andtheWorld Bank. TheAgreements aimtostrengthen our
relations, through further cooperation andcollaboration, withtheIMFandtheWorld Bank. The
Agreement withtheIMFwassigned inSingapore atthetimeoftheMinisterial Conference inDecember
1996, andthatwiththeBank wassigned inlateApril ofthisyear.
2. TheAgreements arecentral tomeeting theMinisterial Mandate fortheWTO topursue and
develop cooperation withtheIMFandtheWorld Bank withaview toachieving greater coherence
inglobal economic policymaking. Inparticular, thisaddresses thechallenge thatourMembers face
indrawing thefullbenefits fromglobalization. Itisclearthattheprospects forprogress inthisrespect
areimproved bycloser cooperation between ourthree organizations, while carefully respecting the
confidentiality needs andautonomy indecision-making ofeachinstitution.
3. TheAgreements havebeenineffect forlessthanayear-inthecaseoftheWorld Bank for
barely seven months. Butimportant newforms ofinteraction andcooperation havealready beenput
inplace andIthought itappropriate toreport toyouontheirimplementation todate. Broadly, the
relevantactivitiescanbegroupedunderthreeheadings:participationineachothers'meetings;exchange
ofviews andinformation, including work oncoherence ;andtechnical cooperation, especially in
exploring hownewinformation andcommunications technologies canbestbeusedtoimprove access
toknowledge andboost development.
Participation inmeetings
4. Ishould notefromtheoutset thatIhavecontinued tomeetinformally fromtimetotimewith
mycounterparts, MrCamdessus, theManaging Director oftheIMF, andMrWolfensohn, President
oftheWorld Bank. These meetings havebeentheoccasion forabroad exchange ofviews inareas
ofmutual concern. Thus, forexample, itisclear thattheIMFandtheWorld Bank endorse the
importance ofasuccessful conclusion ofthenegotiations onFinancial Services. They alsosupport
ourefforts foramore integrated approach totechnical cooperation forourMembers, asisevident
fromvarious projects wehavelaunched withtheWorld Bank andtheimportant rolebothinstitutions
played intheorganization oftheHigh-Level Meeting forLeast-Developed Countries.
5. Ourattendance attheIMF-World Bank Annual Meetings andatsessions oftheInterim and
Development Committees helptokeepusabreast ofpolicy developments intheseorganizations. Thus,
attherecent meeting oftheIMF'sInterim Committee inHong Kong, apossible amendment ofthe
IMF'sArticles ofAgreement relating tocapital account liberalization among IMFMembers was
discussed; thisisofclearimportance toourMembers andIreturn tothematter below (inparagraph 11).
6. InMarch 1997theSecretariat wasanobserver, forthefirsttime, atanIMFExecutive Board
meeting, ontheoccasion ofitsdiscussion oftheWorld Economic Outlook (WEO). TheWEO is
theIMF'sflagship publication. Itisissued twice ayear,subsequent todetailed discussion ofitsfindings
intheIMF'sExecutive Board; atthetimeofthediscussions, theWEO ishighly confidential andforWT/GC/W/68
Page2
observers toattend isexceptional. Issuance iscoordinated withtheIMF'sInterim Committee meetings
intheSpring andtheAutumn.
7. TheWEO provides anauthoritative overview oftheworld economic situation, including
projections ofmajor indicators, suchasgrowth andinflation rates, aswellasoftrade volumes. On
aconfidential basis, theIMFsends theSecretariat anadvance copyoftheWEO, ahead oftheExecutive
Board 'sdiscussion. Theinformation isofclearoperational importance totheSecretariat, which also
hasopportunity tocomment ontheWEO. Thishelps toensure thatWTO perspectives aretaken into
account initspreparation.
8. TheMarch WEO discussions centered onthatissue'stheme ofglobalization, amatter of
significant concern toourMembership. TheWEO noted thatglobalization, liketechnological change,
isafundamental source ofeconomic growth andhence ofincome andwelfare gains, butalsoofstructural
change. Incommon withWTO documents onglobalization, theWEO clearly indicates thatadjustment
tohigher income levels isthemore certain andrapid when basicmacroeconomic management issound
andtheeconomy isopenandflexible.
9. InJuly1997 theSecretariat wasalsoanobserver, forthefirsttime, attheWorld Bank's
Executive Board, foritsdiscussion oftheBankpaper onGlobal Economic Prospects (GEP). Annually,
theGEPexamines theenvironment fordeveloping countries, often within thecontext ofatopic of
current interest, e.g.indebtedness. Thisyear'sreport centered onhowdeveloping countries might
benefit from-andcontribute to-thegrowing integration oftheworld 'seconomies. Thereport found
thatthemedium tolong-term (10years) outlook fordeveloping countries isatleastasgood, ifnot
better, thanintherecent pastandthatamajor contributing factor tothisisthemore liberalized trading
environment. Notsurprisingly, theGEPnotes thatcountries willbenefit more fromglobalization to
theextent thattheirowneconomies are(credibly) opentotrade withtherestoftheworld.
10. TheSecretariat commented onanearly draftoftheGEP, particularly withreference tothe
roleoftheWTO. AswiththeWEO, ourinvolvement withtheGEPhelps theSecretariat initsown
evaluation oftrading conditions andcontributes toacommon appreciation among ourthreeorganizations
ofthewaydevelopments ineachinteract withthose intheothers. Thisinturnhelps ustoprovide
ourMembers withbetter-informed advice.
11. TheSecretariat recently attended anIMFExecutive Board meeting thatdiscussed apossible
amendment oftheIMF'sArticles ofAgreement, tomake thepromotion ofcapital account liberalization
aspecific purpose oftheIMFandtogivetheIMFappropriate jurisdiction overcapital movements.
Achange intheIMF'sArticles ofAgreement isclearly amatter ofgreat interest totheWTO since
theWTO Agreements include references totheIMFanditsArticles. TheIMFisfullyaware ofthis
interest. Indeed, MrCamdessus andIagreed thattheWTO Secretariat andIMFstaffshould keep
closely intouch ontheissue. Inthisspirit, theIMF'sGeneral Counsel hastaken upcontact withthe
Director ofourLegal Affairs Division onvarious points regarding theWTO Agreements. Ambassador
Lafer, asChairman oftheGeneral Council, hasbeenkeptfullyinformed andconsulted onallissues
inthismatter. TheSecretariat, initscommunications withtheIMF'sGeneral Counsel, hasstressed
thatonlytheGeneral Council interprets theWTO Agreements. Thematter ofanamendment ofthe
IMF'sArticles ofAgreement remains before itsExecutive Board andisunlikely tocome toaresolution
before Spring 1998. TheSecretariat 'sinvolvement inthismatter isthusongoing andIwillcontinue
toconsult fullyonitwiththeChairman oftheGeneral Council.
12. InOctober 1997, theSecretariat wasrepresented atanIMFExecutive Board discussion of
trade liberalization inthecontext ofIMF-supported programmes ,andinNovember wewerepresent
attheBoard 'sconsideration ofdevelopments intheUgandan economy ,where trade liberalization has
beenanimportant factor inthecountry 'sadjustment effort.WT/GC/W/68
Page3
13. Prospective plans forattendance atmeetings oftheIMFandWorld Bank Executive Boards
arelimited. Applying arestrictive policy onourpart, ifonly forhuman andtravel resource
considerations, theSecretariat canbeexpected toobserve theIMFExecutive Board discussions of
important trade andrelated matters, including possibly inthecaseofcountries thatarealsoonthe
WTO schedule ofTrade Policy Reviews. With respect totheWorld Bank, Iexpect thatearly next
yeartheSecretariat willobserve itsExecutive Board meeting ontheWorld Development Report 1998,
andperhaps onforeign direct investment flows; itisalsopossible thatwemight bepresent forthe
Board 'sconsideration ofdevelopments inacountry where trade orrelated policies haveplayed an
important role. Ishould notethatwedidnotattend anearly-September Bank Board discussion on
preparations fortheWorld Development Report 1998-which onthisoccasion istofeature Knowledge
ForDevelopment -aswewere constrained bybudgetary considerations.
14. TheIMFandtheWorld Bank havefrequently beenrepresented bymembers oftheirstaffs
asobservers atWTO meetings. Onanumber ofoccasions thishasresulted inrequests from WTO
bodies forinformation fromtheseorganizations. ThusthestaffoftheWorld Bankhassubmitted reports
onBank work related toCustoms Valuation, Intellectual Property Rights, Preshipment Inspection,
andTrade andInvestment. ThestaffoftheIMFhasmade similar submissions onIntellectual Property
Rights andonTrade andInvestment.
15. Inaccord withGATT Article XVandGATS Article XII,theIMFhasaformal presence in
theWTO Committee onBalance-of-Payments Restrictions. TheIMFprovides background economic
information onMembers consulting intheCommittee andintheevent offullconsultations itpresents
astatement, which istheofficial viewoftheIMF. Inthepastyearsuchstatements havebeenmade
inconsultations withBulgaria, theCzech Republic, India, Nigeria, Pakistan, theSlovak Republic and
Tunisia. TheIMFroleintheCommittee hasinvariably proved valuable inhelping theCommittee
toarrive atitsconclusions.
Exchange ofviews andinformation
16. Primary under thisheading isthecoherence mandate. Ministers instructed theDirector-General
oftheWTO toaddress, withtheIMFandtheWorld Bank, theissueofcoherence inglobal economic
policy making. Indeed, Article III.5oftheAgreement Establishing theWTO makes direct reference
togreater coherence inglobal economic policymaking. Suchcoherence maybeviewed asefforts by
ourthree institutions, individually andcollectively, towork toward harmonious implementation of
ourcommon andcomplementary objectives. Inthisregard, theWTO Agreements withtheIMFand
theWorld Bank wereimportant advances. Theunprecedented opportunities forformal consultations,
andparticipation inkeyformal meetings attheExecutive Boards oftheIMFandtheWorld Bank as
described above, arealsoimportant inthisregard.
17. Substantive asthese advances are,allthreeorganizations recognize thattheWTO 'scoherence
mandate refers toafuller range ofthemes. Inthisrespect anactive process ofexchange ofviews has
beenunderway among theSecretariat andthestaffs oftheIMFandoftheWorld Bank, aimed at
establishing aninformal common framework onthematter ofcoherence. Iwillcertainly keepyou
fullyinformed onanyfurther progress inthisimportant area.
18. Animportant element under thisheading iscoherence atthenational level,which is,ofcourse,
inthesovereign domains ofyourGovernments. AsIhavenoted previously,1inthecourse ofour
work wemaycome upon policy measures thathavebeenproposed bytheIMFortheWorld Bank
1"Statement bytheDirector-General onConsultations andCoherence", WTO document
WT/L/194/Add-1.WT/GC/W/68
Page4
-orthattheyareconsidering -thatmaynotbeobviously consistent withagreed rights andobligations
under theWTO. Iamgladtosaythatnosuchinstances havecome toourattention during theperiod
since thecoming intoeffect oftheAgreements andhence there hasbeennoneedfortherelevant
consultations, neither withaMember orMembers, norwiththeIMFortheWorld Bank.
19. Theactual flow ofinformation between ourorganizations hasalsoimproved under the
implementation oftheAgreements. TheIMFprovides theSecretariat withfactual information which
isinvaluable especially inthepreparation oftheSecretariat reports fortheTrade Policy Review Body
andtheCommittee onBalance-of-Payments Restrictions. We,ofcourse, alsoreceive copies ofthe
IMF'sWorld Economic Outlook, Annual Reports andavariety ofstatistical series. Inturn,theIMF
andtheWorld Bank receive copies ofourreports andpublications andhaveaccess totheIntegrated
DataBase.
20. Inaccord withourAgreement, theWorld Bank recently sentuscopies ofeachoftheirnew
electronicproducts,theWorldDevelopmentIndicators1997(WDI)CD-RomandtheGlobalDevelopment
Finance 1997(GDF) CD-Rom .Thetwo,which willberegularly updated, provide theSecretariat with
ready access tokeydataseries usedbythestaffoftheWorld Bank. TheWorld Bank alsoprovides
theSecretariat withcopies ofavariety ofreports andpublications, including theWorld Development
Report, Global Economic Prospects andtheWorld Bank Atlas.
21. TheSecretariat andthestaffs oftheIMFandtheWorld Bankalsoconsult frequently, andusually
veryinformally, onpurely technical matters. Thus, forexample, acountry deskattheIMForthe
World Bankmight approach theTrade Policy Review Division toreview forfactual accuracy thedesk's
information ontrade measures maintained bythecountry. Similarly, aWTO officer might seek
clarification fromanIMForWorld Bank staffmember ondataincountry reports. Somewhat more
formally, theSecretariat hasworked closely withstaffoftheIMFandtheWorld Bank inthecontext
oftheU.N. Task force onInternational Merchandise Trade Statistics, torevise theconcepts and
definitions forstatistics ontradeflows. WTO statisticians willalsowork withtheIMF'sDepartment
ofStatistics toimprove thedetail andcollection ofservice statistics, amatter ofclearimportance for
animproved understanding oftrade inservices.
22. TheWTO provided aforum forapublic presentation inmid-September ontheWorld Bank's
World Development Report. Thereport isanimportant annual publication oftheWorld Bank. Its
theme thisyearwasTheStateinaChanging World. Thepresentation, towhich allWTO delegations
andobserves wereinvited, wasmade bytheeditor ofthereport, MrA.Chhibber. Attendance was
verygoodandthesubsequent questions anddebate verylively. Ilookforward toexpanding thistype
ofinteraction withtheBank andindeed withother institutions.
Technical cooperation
23. Technical cooperation withtheIMFandtheWorld Bank hasadvanced onanumber offronts
andholds great promise forthefuture, much tothebenefit ofallourMembers. TheIMFandthe
World Bank aretwoofthefiveorganizations thatmost directly cooperated withtheWTO inthe
organization oftheHigh-Level Meeting forLeast-Developed Countries 'which weconvened inlate
October.2This, asyouwillrecall, resulted from theComprehensive andIntegrated WTO Planof
Action fortheLeast-Developed Countries adopted byWTO Ministers inSingapore inDecember 1996
attheirfirstConference. Pursuant tothiswehavestarted aprocess ofapplying onacountry-specific
basis theIntegrated Framework fortheprovision, inter alia,oftrade-related technical assistance,
including human andinstitutional capacity-building, forthesupport oftrade-related activities inleast-
2Thefiveagencies referred aretheIMF, ITC, UNCTAD, UNDP andtheWorld Bank.WT/GC/W/68
Page5
developed countries andtheenhancement oftheirsupply response. TheHigh-Level Meeting was
therefore afirstandcritical stepinanenvisaged long-lasting programme oftechnical assistance inwhich
theIMF, theWorld Bank andtheWTO willplaycomplementary andmutually supportive roles.
24. Anewareaofcooperation withenormous potential isourproject withtheWorld Bank on
Information Technologies forDevelopment (ITD). Theproject usesinformation technologies tobetter
enable ministers andofficials indeveloping countries tounderstand andtomake useoftherulesand
mechanisms oftheWTO forthebenefit oftheircountries. Theproject willenable them tohave
permanent electronic access totraining, education andinformation toolsandtomaintain anongoing
interactive electronic contact withtheWTO. Integral totheproject isthecreation ofalibrary of
interactive electronic guides, including guides ontheWTO; theUruguay Round andDeveloping
Countries; WTO Schedules; Services; Goods; Regionalism; andDispute Settlement.
25. Theproject isajointundertaking withtheEconomic Development Institute oftheWorld Bank,
withwhom werecently signed aformal letter ofagreement butwithwhich wehavehadaworking
arrangement sinceDecember 1996. Under theproject, welaunched inJune1997anInternet web-site,
theTrade andDevelopment Center (www.itd.org), which wasfullyoperative atthetimeoftheHigh-
Level Meeting. Atthattime, too,theinitial electronic guide -ontheWTO -wasoperational anda
second -ontheUruguay Round andDeveloping Countries -wasavailable inprintform. Also, in
October weequipped theTrade Ministries ofBenin, Burkina Faso, Côted'Ivoire andGhana withthe
necessary electronic hard- andsoft-ware toaccess theInternet; wealsoprovided therequired training
todecision makers. Before theendoftheyearweplantoprovide thisequipment andtraining also
toKenya, Tanzania andUganda. Wehopetoextend thesefacilities to29developing-country members
oftheWTO. Funding fortheITDproject isprovided bytheWorld Bank, theWTO andthe
Governments oftheNetherlands andNorway.
26. TheCyber-Café thatwassetupfortheduration oftheHigh-Level Meeting allowed officials
toseeatfirsthandhowwearemaking useofthese newtechnologies toaiddeveloping countries in
theirefforts tobring themselves intothemainstream oftheglobal trading system. Thenewtechnologies,
ofwhich ourjoint web-site withtheWorld Bank isanoutstanding example, areagateway to
development, inthattheyprovide knowledge ,themostimportant resource forraising living standards.
Ournewsystem provides access tobasic information thatiscritical topolicy making andbusiness
planning. Itwillalsoallow officials theuseofon-line forums toconsult WTO andWorld Bank staff
ontrade matters andlearn about emerging developments inthetrading system.
27. Inafurther cooperative effort, werecently agreed tojointheIMFandtheWorld Bank, as
wellassomeothermajor organizations, asco-sponsors oftheJointVienna Institute (JVI).3TheInstitute
providesspecialisttrainingineconomicandfinancialmanagementandinadministrationtopublicofficials
andprivate-sector executives fromcountries ofCentral andEastern Europe andtheformer Soviet Union,
aswellasfrom thepreviously centrally-planned economies inAsia. Asaco-sponsor oftheJVIwe
participate inshaping, designing andimplementing what isperhaps themost comprehensive and
successful technical assistance programme offered tocountries intransition. Itislikely thattheWTO
willinitially takeresponsibility forthetrade component oftheJVI'scomprehensive course inapplied
market economics; thisisgiven twice ayear, withthetrade parttaking about 1½weeks ofeach18
week course. Wewillofcourse retain ourowncourses forofficials fromtransition countries butmay
inform JVIbrochures oftheirexistence foradditional exposure. Thefinancial set-up oftheJVIrelies
heavily onthecontributions ofthehostcountry, Austria, andonadditional assistance fromother donor
3TheJVIhasthefollowing sponsoring agencies besides theIMF, World Bank andnowtheWTO:
theBank forInternational Settlement (BIS), theEuropean Bank forReconstruction andDevelopment
(EBRD) andtheOrganization forEconomic Cooperation andDevelopment (OECD).WT/GC/W/68
Page6
countries. Ourresource commitment would bethrough theprovision ofSecretariat officials forthe
trade partofthecourses.
28. Wehavealsoworked closely withthestaffoftheWorld Bank inthecontext ofInformation
forDevelopment (INFODEV), aWorld Bank-managed donor programme. Intheperiod June1996
toFebruary 1997, stage IofINFODEV provided funds tohelppayforWTO Secretariat members
(andasmall group ofconsultants) toprovide technical assistance tointerested Governments todraft
offersforthenegotiationsonBasicTelecommunications.Inthismannersome26countrieswereassisted,
eitherdirectlyorthroughregionalconferences.Thisundoubtedlycontributedtothesuccessfulconclusion
ofthenegotiations. Under stage IIofINFODEV, torunfrom September 1997 tothelatesummer
1998, funds aretobeavailable tohelpfinance technical assistance byWTO Secretariat members (and
some consultants) to:interested Governments whowant tomake latecommitments, byDecember
1997, inBasic Telecommunications; countries intheprocess ofaccession totheWTO whowishto
draftoffers onBasic Telecommunications; andcountries whoseekhelpwiththeimplementation of
theircommitments inBasic Telecommunications, inboththemarket access andregulatory areas.
29. Lastly, theWTO Secretariat further collaborates withtheIMFandtheWorld Bankbyproviding
experts onWTO Agreements andmechanisms forseminars organized bythese organizations ontrade
andrelated matters. Thus, forexample, theSecretariat participated inaWorld Bankseminar inSenegal
inMay1997onTheGATT/WTO System anditsimplications forTrade Policy inWest Africa. This
andsimilar seminars arevaluable forintegrating countries intothemultilateral system. TheSecretariat
alsointends toorganize withourcolleagues intheWorld Bank tworegional seminars inAfrica on
theimplementation oftheAgreement onAgriculture andrecently accepted aninvitation bytheWorld
Bank foraSecretariat member tojointheirmission toassist acountry intheprocess ofaccession to
theWTO.
Conclusion
30. Theimplementation ofthese Agreements hasstarted ontherighttrack. Wewillcontinue to
develop ourcollaboration withtheIMFandWorld Bank always taking fullyintoaccount theconcerns
expressed byyouatthetimetheAgreements wereapproved. Iwill,ofcourse, alsocontinue tokeep
youfullyinformed ofdevelopments inourrelationship withtheIMFandtheWorld Bank. Even at
thisearly stage intheimplementation process, wecanalready seeitbearing fruit. Ilookforward to
thecontinuing development ofthiscooperative effort tothebenefit ofallWTO Members.