RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TF/COH/S/4
14 December 2000
(00-5470)
Original:  English
COHERENCE IN GLOBAL ECONOMIC POLICY-MAKING:
WTO COOPERATION WITH THE IMF AND THE WORLD BANK
Report (2000) by the Director-General
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"1, to inform Members about the
activities carried out by the WTO under its cooperation agreements with the IMF and the World
Bank2.
2. Over the past twelve months, the WTO Secretariat has continued to place emphasis on
developing its cooperation with the staff of the IMF and the World Bank in assisting developing and
least-developed countries to take greater advantag e from their involvement in  international trade and
their participation in the multilateral trading system, in support of broader efforts geared towards
economic growth and development and the alleviation of poverty.
3. The Director-General, the Managing Director of the IMF and the President of the World Bank
have each continued to stress the importance of integrating developing and least-developed countries
more fully into the world economy, including th rough improved market access for their exports,
through support for trade policy reform, through debt relief, and through assistance to these countries
in trade-related capacity building.  They have pointed to the complementary nature of efforts being
pursued in these areas by the international trad e, finance and development communities, and noted
that when taken together, these efforts represent the essence of adopting a more coherent approach to
global economic policy-making.3
4. A main focus of the IMF/World Bank Development Committee in April 2000 was the issue of
"Trade, Development and Poverty Reduction".4  Finance and Development Ministers, inter alia ,
endorsed the commitment of the World Bank and the IMF to use their programmes to support
countries' efforts to expand trade within a compre hensive framework for development that includes
the necessary complementary reforms and investment in institutions, infrastructure and socialprogrammes.  They reiterated their call on the World Bank, the IMF and the WTO to cooperate with
other parties in developing effective programmes of capacity-building for trade, including through an
improved Integrated Framework for Trade-Related Assistance for the Least-Developed Countries.
And they urged the World Bank to mainstream trade in its country assistance programmes by
                                                     
1 WT/L/194 of 18 November 1996.
2 The last report is contained in WT/TF/COH/S/3 of 21 October 1999.
3 See "Joint Statement by the Heads of the IMF, the World Bank, and the WTO", 30 November 1999,
(Press/153).
4 Extracts from IMF/World Bank, Development Committee communiqué, 17 April 2000
(WT/TF/COH/6).WT/TF/COH/S/4
Page 2
providing greater financial and technical support to improve trade-related infrastructure and
institutions.5
5. The WTO Secretariat is cooperating with the staff of the IMF and World Bank as they
develop strategies to support developing countries' efforts to expand their trade, to integrate trade into
the IMF/World Bank Poverty Reduction Strategy papers, and, in the case of the World Bank, tomainstream trade in its country assistance programmes.  In this regard, the Secretariat's work on Trade
Policy Reviews, on the Integrated Framework, and on technical assistance generally, are all making a
contribution.  The Integrated Framework, in particular, can be a useful complement to the Poverty
Reduction Strategy, providing a focal point for help ing countries to determine their trade priorities
and a channel through which trade issues can be highlighted in broader poverty reduction discussions.
Consultations between the Director-General a nd the Managing Director of the IMF and the
President of the World Bank
6. The Director-General attended the meetings of the IMF International Monetary and Finance
Committee and the IMF/World Bank Development Committee in April and in September 2000.
6  On
these, and a number of other occasions, he held meetings with Mr. Wolfensohn and Mr. Köhler.
Their discussions covered recent developments in the world economy and on global financial markets,the importance of viewing debt relief initiatives in conjunction with improved market access for the
exports of least-developed countries, and ways in which trade can be made to work more effectively
for economic growth and development and the alleviation of poverty.
WTO Observership in IMF and World Bank meetings7. Pursuant to the WTO/IMF and the WTO/World Bank cooperation agreements, the WTO
Secretariat is invited, in an observer capacity,  to attend meetings of the Executive Boards of the IMF
and of the World Bank on general and regional trad e policy issues, including the formulation of Fund
or Bank policies on trade matters.
8. In the past twelve months, the WTO Secretariat attended World Bank Executive Board
meetings on "Trade, Development and Poverty Reduction", on "Small States", and on "Global
Economic Prospects in Developing Countries", and IMF Executive Board meetings on "Trade,
Development and Poverty Reduction" and on "World Economic Outlook".
IMF and World Bank Participation in WTO meetings
9. The IMF and the World Bank are regularly invited to attend, in an observer capacity, the
formal meetings of most WTO bodies (with the ex ception of the Dispute Settlement Body and the
Committee on Budget, Finance and Administration).  The IMF participates regularly in consultations
of the Committee on Balance-of-Payments Restrictions.  Following the decision of the General
Council, on 16 February 1999, to authorize its Chairman to convene special informal meetings from
time to time, at the request of delegations or the Director-General, to discuss coherence issues,
representatives of the IMF and the World Bank have been invited to participate in informal GeneralCouncil meetings on Coherence.
                                                     
5 The World Bank estimates that between 1990 and 1998, 68 per cent of Bank adjustment operations
included support for reform of trade and exchange rate policies.  Similarly, the Bank's investment lending fortrade-related activities accounted for around 26 percent of total Bank lending from 1994 to 1999.
6 In April, the Director-General participated in the restricted session of the Development Committee.
See Annex for a copy of his statement.WT/TF/COH/S/4
Page 3
Joint Research and Analysis
10. We are collaborating with IMF and World Bank staff in areas of research and analysis where
we feel there are opportunities to generate greater economic policy coherence.  They include:
analysis of the timing and sequencing of trade reform and liberalisation;  analysis of how betterinternational financial standards and supervision can complement financial services liberalisation, and
help create stronger and more stable financial markets;  and methodologies for measuring the costs of
restrictive trade policies.   Work in each of these areas has been inspired by interest shown by member
governments in one or other of the three organisations.
Joint Seminars.  Three seminars were organized in Geneva which benefited from World Bank
participation and collaboration.  They covered "Special and Differential Treatment for
Developing Countries", "Implementation of the WTO Agreements", and "Small Economies inthe Multilateral Trading System".  In addition, a new series of informal Coherence seminars
was started this year, to provide an opportunity for World Bank and IMF staff travelling
through Geneva to brief WTO delegates and Secretariat staff on work in progress in their
organisations on issues related to trade.  Topics covered to date include: (i) preparations by
the World Bank of an updated version of its "Handbook on Negotiating Issues" , (ii) a World
Bank  research project on Trade in Services , and (iii) a presentation by the World Bank of its
annual report on "Global Economic Prospects for Developing Countries" which this year has
a strong trade focus.  On 24-25 October, WTO staff participated in a World Bank seminar on
"International Trade Law" in Washington.  The purpose of the seminar was to better inform
IMF and World Bank lawyers about WTO law - given their growing role in providing legaladvice on trade issues to governments - and the World Bank has proposed that the seminar
now be held on an annual basis.
Task Force on Small States.  Since 1998, the WTO Secretariat has participated on the
Advisory Board of the World Bank/Commonwealth Secretariat Task Force on Small States.Data Exchanges.  Under the WTO/IMF and WTO/World Bank cooperation agreements, the
WTO Secretariat provides the IMF and World Bank staff with access, on a confidential basis,
to the Integrated Database of the WTO and to final schedules of commitments of WTO
Members.  Subject to the same confidentialit y requirement, the Fund makes available to the
WTO Secretariat the publications files of the International Financial Statistics (IFS), Balance
of Payments Statistics (BOPS), Government Financial Statistics (GFS), and Direction of
Trade Statistics (DOTS).  The Fund's staff also makes available to the WTO Secretariat
historical data and aggregate projections in the "World Economic Outlook" (WEO).
Consideration is given to specific additional re quests pertaining to the IFS, BOPS, GFS and
DOTS databases, as well as requests for projections of individual country data to be used in
the WEO and for other statistics.  The World Bank provides the WTO Secretariat access tothe Bank Economic and Social Database (BESD), as well as the Statistical Annex of the
Global Economic Prospects and the Developing Countries.
IMF country reports.  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 staff papers 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.  These documents contain details of the IMF's trade policy
advice and conditionality, which is reviewed routinely by the WTO Secretariat.  They are also
used by the WTO Secretariat for reference purposes, notably in the course of the preparationof Secretariat reports for the Trade Policy Review Mechanism.WT/TF/COH/S/4
Page 4
Trade and Development Centre.  Since 1997, the WTO and the World Bank have maintained
a shared website providing development-related trade information.  This shared website also
hosts an "On-Line for Trade Topics", allowing individuals to enter into on-line discussion of
trade issues and to ask trade-related questions of WTO and World Bank experts.  The current
topic of discussion is trade and sustainable development.
The Global Development Gateway.  The WTO has been asked to help develop the framework
for the Global Development Gateway, which is conceived by the World Bank as an Internet-
based vehicle facilitating the provision and exchange of information relating to development.
Technical Cooperation
Joint Vienna Institute. 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,
established in 1998 to provide training support for countries making the transition from
centrally-planned to market-based economies.  Applied Economic Policy courses, where trade
issues figure prominently, are held twice yearly from September to December, and Februaryto April.  The Director-General visited the Joint Vienna Institute in October, where he was a
keynote speaker at the 2000 East/West Conference on "Transition: 10 Years Later".  The
WTO will host the Board of Governors of the Joint Vienna Institute in 2001.
Trade Policy Review Reports.  Beginning with the Trade Policy Reviews of Tanzania and
Bangladesh this year, and continuing with Mozambique, Uganda and Madagascar in 2001, the
WTO Secretariat will now regularly examine the technical assistance needs and priorities of
least-developed countries, both to help guide the work of the Integrated Framework and to
feed into the IMF/World Bank Poverty Reduction Strategy process.
The Integrated Framework for Least-Developed countries  The IMF and the World Bank both
participate in the Integrated Framework.
WTO Trade Policy Courses  World Bank experts present a two-day "module" at the
beginning of each TPC.  We are exploring how the World Bank's Global Learning Network
can be used in our training courses in future, and how we might associate the World Bank in
an expansion of our training programme.
General Contacts Pursuant to Paragraph 10 of the IMF Agreement and Paragraph 8 of the
World Bank Agreement
11. 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 the IMF
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 organisations, and that cooperation does not result in cross-conditionality nor
extra conditions on WTO Members.
12. 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 drawextensively on the work and expertise of each other.  For example, WTO reports utilise inputs from
the IMF and the World Bank on macroeconomic, trade,  and social developments.  Similarly, the IMFWT/TF/COH/S/4
Page 5
and the World Bank use information on trade, trade measures and related issues from WTO sources,
particularly to ensure that their policy advice does not include WTO inconsistent measures.
High-Level Working Group on Coherence
13. The High-Level Working Group on Coherence, consisting of senior staff from the IMF, the
World Bank and the WTO, continued to meet.  Discussions focused in particular on preparations for,
and on the results of, the IMF/World Bank Development Committee meeting in April, as well as on a
range of issues of routine interest.
Least developed and net food-importing developing countries
14. The IMF and the World Bank report regularly to the Committee on Agriculture on financial
support they provide to these countries in this area, through adjustment programmes or emergency
lending in the case of the IMF, and through agricultural development projects, structural adjustment
lending and emergency lending in the case of the World Bank (G/AG/W/42/Rev.3).WT/TF/COH/S/4
Page 6
ANNEX
Statement by the Director-General at the 61st Meeting of the Development Committee, 17 April 2000
Trade's role in the development process has never been more widely accepted:
• We know that if developing countries are to grow their way out of poverty, more must be done to
remove barriers facing their exports of goods and services
• We know that the timing and sequencing of their own trade reforms is a critical issue
• We know that trade must be seen as part of a wider and more comprehensive development
strategy
• We also know that bringing developing countries into the global trading system is key, not only to
a more equitable world economy, but a more secure and stable one as well.
The real question we have to tackle is not whether trade is central to development and poverty
reduction, but how to move a comprehensive trade and development agenda forward.  Where are we
in our preparations to launch the long-promised "Development Round"?  And what should be our next
steps?
First , we need to make real progress this year on the mandated WTO negotiations on
agriculture and services . The stakes are high.
• Rural poverty is the most endemic and corrosive form of poverty in the developing world, and
continuing high barriers to agricultural trade are a large part of the problem.  The WorldBank/IMF issues paper suggests that the global liberalization of agricultural trade  could yield
benefits to developing countries of over US$ 40 billion per year.
• Services liberalization  is central to successful development strategies.  It brings with it essential
access to modern technology, and it can produce economy-wide benefits, in terms of more
efficient infrastructures, lower communications and transport costs, stronger and betterfunctioning financial markets.  Service sector exports are also of significant and increasing
importance for a large number of developing countries.
Second , we need to make progress on a package of measures to assist the least developed
countries .  With over ten per cent of the world's population, they account for just one-half of one per
cent of world trade – and their share is shrinking.
• Their desperate situation is not the result of too much trade, but of too little.  Tackling that
requires a comprehensive approach, to encourage trade diversification, to correct policyimpediments that hamper the development of competitive exports, to build human and
institutional capacity to help them grow into world-class traders.
• These problems will not be corrected overnight.  What can be done immediately is to improve
market access opportunities for the least-developed countries.  It is shameful for their wealthytrading partners to continue to maintain tariffs and quotas against the products in which the least-
developed countries have a clear comparative advantage.
Third , we need to make a more integrated approach to trade-related technical assistance
and capacity building .  This, above all, is where the Bank, the Fund and the WTO can give practical
substance to calls for a more "coherent" approach to trade and development.WT/TF/COH/S/4
Page 7
• I welcome the fact that the World Bank and the IMF support for trade policy reform and trade-
related capacity building is being made an integral part of the new Poverty Reduction Strategy
Process .  The support of the World Bank and the IMF, along with that of all the other
development partners involved in the PRS pro cess, can be of great value in assisting poor
countries to enhance the benefits they derive from trade.
• The WTO's Integrated Framework  for least-developed countries can provide a valuable
complement to this approach.  Like the PRS system, it is demand-driven and owned by
governments, and it is inclusive of each country's full range of development partners.  By better
coordinating our trade-related activities under the Integrated Framework, we can provide an
effective and ready available channel for conveying information on each country's trade needs
into the Poverty Reduction Strategy process.  I have invited the heads of the six agencies involved
in the IF to meet in early-July to consider how we can improve its operation.
• For the WTO to be an effective partner in this process, we need to increase our resources for
technical assistance and training .  That is why I am also looking to improve and regularize the
funding of the WTO's technical co-operation activities.  The WTO's core budget for technical
assistance is a mere half a million dollars – although we receive additional funds from generous
donors – and  last year we were only able to meet one-fifth of the requests made to us for
technical assistance.  We need a regular budget suff icient to enable us to plan two to three years
ahead and respond to increasing demands for technical assistance programmes, not just individual
projects.  I am seeking an extra 10 million Swiss francs for the regular technical co-operationbudget, and I hope that I will receive your support.
These represent essential first steps towards the goal of launching a new and ambitious
Round of multilateral trade negotiations , which I believe is central to the trade interests of
developing countries.  Developing countries need more liberalization, not less, and they are the mainbeneficiaries of the rules-based system.  The reality is that only through a broad and balanced
negotiation will countries achieve the cross-sectors trade-offs that help to drive liberalization forward.
Only an inclusive approach – based on the principle of non-discrimination – can we ensure that the
weakest and poorest countries are not marginalized.  As important as unilateral, bilateral or regional
initiatives have been, history shows that multila teral Rounds offer the most powerful vehicle for
world-wide liberalization.
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