RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/WGTDF/M/11 
25 July 2005 
 
 (05-3325) 
Working Group on Trade, Debt and Finance  
  
 
REPORT OF THE MEETING OF 4 JULY 2005 
 
 1. The Working Group on Trade, Debt and Finance he ld its eleventh meeting on 4 July 2005 
under the Chairmanship of Ambassador Kweronda  Ruhemba (Uganda), and adopted the agenda 
contained in WTO/AIR/2609. 
A. A
GENDA ITEM A: CONTINUATION OF DISCUSSION OF ITEMS FROM THE GROUP 'S LAST 
MEETING  
1. Better Coherence in the Design and Implementation of Trade-Related Reform and 
Monitoring  
2. The representative of Canada  reminded Members that his Government was a strong supporter 
of coherence as indicated by statements made in prev ious meetings. He stressed  that coherence was an 
important policy priority for his Government, eviden ced also through Canada's leadership in the G-20 
process – a process which brought Finance Minister s from developed and emerging market economies 
together to discuss issues related to the international monetary and financial system. In particular, 
Canada supported coherence between  international institutions given that the international trade 
framework was connected to globalization issues such  as finance and development. In addition to the 
importance of coordination between international institutions, he pointed to the value of policy 
coordination at the national level, in particular th e inclusion of trade reforms, supported by technical 
assistance and capacity-building, in countries' develo pment strategies.  In his view, such coordination 
had worked well in the Poverty Reduction Strategy  Process, and emphasized that it was necessary to 
design trade strategies complementary to the domestic environment.  He added that if Trade Ministers 
could not influence the broader domestic agenda, then the Brett on Woods institutions would be 
limited in their ability to respond.  Most successful  trade strategies would be those to complement 
economic reform, such as those related to the re gulatory environment, the investment climate and 
even those related to the transportation system and customs procedures.   
3. The representative of Cuba  noted that Part IV of the GATT recognized the interlinkages 
between trade and development  needs and proposed th at an institutional structure to ensure coherence 
for development be created. 
2. Interlinkages between External Liberalization and Internal Reform  
4. A number of delegations agreed with severa l  observations made in the background document 
prepared by the Secretariat (WT/WGTDF/W/29, 11 April 2005).   
5. The representative of the United States  said that the background document contained much 
useful information and solid analysis and was worthy of each  Members' consideration.  
6. The representative of Hong Kong, China  called attention to the value of external liberalization 
as a catalyst for internal reform, especially in the context of financial services.  Although he recognized that liberalization was only half the stor y, and the proper regulatory structure was equally WT/WGTDF/M/11 
Page 2  
 
 important, he considered that the WTO could promote competition and help governments sustain 
reform efforts.  He also highlighted the importanc e of efficient infrastructure, noting that transport 
costs could become a prohibitive factor in trade; diffe rentials in transport costs often outweighed tariff 
differences – a particular problem for low-income countries that traded commodities. He underlined 
that the services negotiations were aimed at promoting efficiency in transport services and this would 
be beneficial for poor commodity exporting countries.  
7. The representative of Mexico
 thanked the Secretariat for its background document which 
recalled a number of the recommendations containe d in the Monterrey Consensus  emphasizing the 
importance of mobilization of resources.  She quoted  from paragraph 3 of the document, .."that the 
task of achieving harmony between structural, ma croeconomic, trade, fina ncial and development 
policies falls primarily on governments at the national level."  She agreed with previous speakers that 
liberalization could be an important source of grow th if accompanied by the set of policies identified 
both in the Secretariat paper and in the Monterre y Consensus. These also echoed what had been put 
forward in the Sachs report1 as well, including the focus on the investment climate and the supportive 
domestic policies in order for  trade liberaliza tion to have its intended impact on growth  
B. AGENDA ITEM B:  DISCUSSION OF REMAINING ITEMS ON THE GROUP 'S WORK PROGRAMME  
1. Trade Liberalization as a Source of Growth 
8. The Chairman  then turned to the next item of th e agenda to address the three remaining 
themes and drew the attention of Members to document WT/WGTDF/W/31 prepared by the 
Secretariat.  He invited Members to comment on one theme at a time.   
9. The representative of the United States  considered that the Secretariat document was an 
excellent paper summarizing the literature on trade liberalization and economic  growth, and related 
matters.  In her view, one could only conclude from it that the core mandate of the WTO of reducing 
barriers to trade and maintaining a rules-based international trad ing system created substantial 
opportunity for economic development.  Particularly  relevant was the finding that broad-based trade 
liberalization under the WTO might increase the ability of liberalizing developing countries to attract 
foreign investment and capital, to use such borro wing to better economic de velopmental effect; and  
take on debt for purposes that were less likely to  lead to debt service or balance-of-payments 
adjustment problems.  The United States had made the same point as the one in the Secretariat paper that the discussion of the relationship between trad e, debt and finance was futile when linkages to 
domestic macroeconomic and structural policies were  excluded from consideration.  In summarizing 
the literature, paragraph began "A common theme of th ese and other studies is that in order for liberal 
trade policies to boost economic growth over the l ong-term they must be accompanied by [domestic] 
policy reforms."  When trade and domestic eco nomic policies were working in tandem toward 
openness, competition and efficiency, debt service i ssues were likely to dissipate and resilience to 
external shocks to increase, since capital inflows were more likely to contribute to economic growth 
and higher national income. With regard to paragrap hs 6 and 7, she considered that these were quite 
explicit on the ability of both import and export trad e liberalization to improve a country’s debt 
service capacity.  Removal of overseas barriers he lped indebted countries earn more foreign 
exchange.   Home-country import liberalization re moved a source of anti-export bias that enhanced 
the benefit to home-country exports deriving from overseas liberalization alone.  As stated in the 
paper, home-country import liberalization "can also  attract foreign investment to these industries, 
which supplements domestic savings for investment  and provides a vehicle for inward transfers of 
technology, helps create faster and more robust ec onomic growth and provides an injection of foreign 
capital that is generally recognized to be more stable and less costly than debt financing." 
                                                     
 
1 Investing for Development: A Practical Plan for Achieving the MDGs.  WT/WGTDF/M/11 
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 10. The representative of Cuba  agreed with the first sentence of the Secretariat paper that growth 
did not automatically derive from liberalization.  Sh e considered that liberalization needed to be seen 
as an objective from which all Members could derive benefits.  In spite of the liberalization process which resulted from the Uruguay Round, these benefits  were still not tangible for many developing 
countries.   
11. The representative of Canada
 agreed that trade liberalizati on needed to be accompanied by 
other policy reforms to ensure a supportive investment  climate, and thought it would be useful if there 
were more discussion in the paper on enhancing Sout h-South trade.  Another element he wished to 
underline was the need for supply-side capacity bu ilding and removal of inside-the-border trade 
constraints while encouraging trade liberalization.   
12. The representative of Mexico  appreciated the summary of the literature on this subject and 
drew attention to paragraphs 8 to 11 of the document (but also linked to WT/WGTDF/W/29)  
concerning sequencing and timing of trade liberalizat ion which she considered could be addressed in 
greater depth by the Secretariat, if it were so to be agreed.   
13. The representative of the European Communities  joined Canada in stressing the importance 
of flanking policies to accompany trade liberaliz ation, the appropriate policies to guarantee an 
investment environment conducive to private investme nt and the need to lift constraints on the supply 
side of the economy.  With regard to the sequenc ing of reform, she referr ed to paragraph 10 and 
expressed the view that exchange rate and fiscal policies were relevant to the sustainability of a 
current account deficit.  Attention could also be drawn, in her view, to the need for adjustment 
policies, such as social safety nets, to facilitate transition and cater to the segment of the population 
that might be adversely impacted by trade liberalization. 
2. The Importance of Market Access and the Reduction of Trade Barriers in the DDA 
Negotiations 
14. The representative of Pakistan , noting that she would appreciate an opportunity at another 
occasion to comment on the paper at greater length, agreed in particular with paragraph 17 of the 
paper on distortions in agriculture, that support in OECD countries was  $1 billion a day – more than 
five times official development assistance. She dr ew attention to paragr aph 36, which cited an 
UNCTAD report showing that African countries were be ing encouraged to diversify into higher value 
added products, hence, the lowering of tariffs a nd NTBs in this sector would obviously have a 
beneficial impact on improving the debt situ ation of low-income and LDC countries.   
15. The representative of Cuba  considered it was necessary that  opening markets go hand in hand 
with national policy space, such as measures that coul d protect incipient national industries.  In her 
view, many developing countries, especially thos e which lacked a diversified export base, had 
suffered deindustrialization from excessive openness so that liberalization should be an orderly 
process, taking into account national interests, rather than liberalization which contained 
insufficiencies that could lead to debt.      
16. The representative of Brazil  also considered that it would be necessary to have another 
occasion to consider these elements.  He mentione d that the theme of market access brought up an 
important debate on c oherence; if markets abroad were closed, then liberalizing at home or ensuring 
infrastructure capabilities was only one side of the equa tion. He drew attention to paragraphs 17 to 20 
and, particularly, paragraph 22, noting that it was an  interesting conclusion by the Secretariat that 
industrialized countries could give a strong signal to the rest of the world by liberalizing, which led 
him to suggest that the international community might practice what it preached.  He said he would 
have appreciated more discussion in the paper on the benefits of opening services markets, as there 
had already been some discussion in earlier meetings on trade in financial services and transport WT/WGTDF/M/11 
Page 4  
 
 services on which, he believed, the Secretariat could ha ve expanded, especially with regard to mode 4, 
movement of natural persons, in  which developing countries ha d a competitive advantage.   
17. The representative of the United States
  concurred with Canada that there was a need for more 
information on South-South trade. In response to the comment by Brazil, she said that she had not 
interpreted industrialized countries to be restri cted to developed ones;  in addition, many 
industrialized countries were more open to mode 4 ser vices than other parts of the world.  She did not 
think there had to be a revision of the paper si nce Members had registered their views, and she 
cautioned against producing more material which wa s being produced in other bodies in the WTO.   
18. The representative of the European Communities  considered that stating that LDC exports in 
paragraph 15 were "dispropor tionately affected" by tariff peaks and escalation was not fully justified.  
This ignored the fact that many LDCs, for whom the EU was the major market, were benefiting from 
preferences under a number of preferential schemes of  the European Union, including the Everything 
But Arms Initiative, as well as GSP and others. U nder the Cotonou agreement, 97 per cent of ACP 
exports entered the EU duty-free, so the information in  paragraph 37 also did not apply.  Comments of 
a general nature were interjected by the representatives of Cuba  and Benin  noting that the mandate 
had not yet been fulfilled and that conclusions or  recommendations were crucial to the process and 
specific proposals were important in order to have tangible results of this work. 
19. The representative of Canada  agreed with the point in the Secretariat paper that non-
discriminatory lowering of trade barriers in the context of the Doha Round had a better chance to increase gains for all countries from liberalization.  Fo r future discussions he felt it would be useful to 
know what other organizations were doing in regard to supporting market access so that, at a future 
time, the Working Group could consider inviting to its meetings the World Bank, the IMF and 
UNCTAD. 
3. External Financing, Commodity Ma rkets and Export Diversification 
20. The representative of Benin
 considered that commodities de served  to be extensively 
discussed.  The prices of commodities had spiralled down continuously since the 1960s;  in the 1960s 
one ton of coffee could allow a farmer to buy a tr actor, today he needed 50 or 100 tons. On the other 
hand, the price of a cup of coffee had not lost its  value, it had increased.  Producers should not be 
condemned to misery and poverty. The economies  of poor countries depended on commodities and 
although the international community seemed to have  lost interest, he stated that Members should 
think about how an acceptable solution could be found.   He pointed out  that in 1971 when the LDC 
Group was created in the UN system, it had 25 memb ers, now there were 50 – all of which depended 
on commodities.  If one wished to reduce poverty, one needed to play an active role in the reduction 
and resolution of the commodity problem.  
21. The Chairman  pointed out that it was important to identify how the Working Group could 
contribute effectively without duplicating work in other bodies.  
22. The representative of the United States  said that there was clear overlap with the Committee 
on Trade and Development which was addressing the issu e of the declining terms of trade in primary 
commodities, and that there should be coherence within the WTO. On the other hand, both the 
representatives of Cuba  and Pakistan  drew attention to paragraph 36 of the document which described 
efforts at exporting higher value adde d food products.  The delegate from Cuba  wished, in particular, 
to draw attention to paragraph 30 which include d the recommendations made at UNCTAD XI where 
UNCTAD should continue to assess developing count ries particularly those most dependent on 
commodities for their exports.  She felt that the Group was going over the same material every year.  
If the discussion on themes to be examined had b een completed, her delegation was prepared to 
discuss the proposal from the ACP Group and come back with recommendations.  She reminded the  WT/WGTDF/M/11 
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 Group that the themes had been agreed for examinati on and that if the Group was now at the stage of 
making recommendations, perhaps it should acknowledge  that the examination phase was behind it.  
She considered that the Doha mandate of the Wo rking Group did not require the Group to take up 
areas which were being discussed in other WTO bodi es and decide to amend provisions or discuss the 
substance of those issues.  In her view, some r ecommendations could be to provide to the relevant 
bodies the thinking that had come out of the work of the Working Group, but the mandate did not give 
the Group the competence to direct the work in other parts of the house. To the extent that there were 
recommendations that provided some fresh thinking these could be taken up by Members.  To date, 
there were a number of proposals that were not within the competence of the WTO.  The requirement was to report on progress in the examination; it had not been envisaged that the Group would clearly 
make recommendations.  
23. The representative of Cuba
 concurred that the mandate c ontained a review component and 
one regarding recommendations; in her opinion, neither  mandate had been fulfilled.  The submissions 
by the ACP Group were relevant and, she believed, should be adopted by the General Council in July.  
Furthermore, she saw merit in establishing a permanen t body to continue the reviews. The debt review 
mechanism contained in WT/WGTDF/W/32 could follow up on the amount of debt payment and 
evaluate the granting of temporary trade concessions  
C. AGENDA ITEM C:  PREPARATION OF THE WORKING GROUP 'S END-OF-YEAR REPORT TO THE 
GENERAL COUNCIL  
24. The Chairman  drew the attention of  Members to  two submissions from the ACP Group;  
WT/WGTDF/W/30 and W/32.  Before opening the floor to delegations to comment on the 
contributions from Benin on behalf of the ACP Group, he made a few observations on how the 
Working Group might wish to approach its task of  preparing its report to the General Council.   
25. He recalled that the Group's mandate in the D oha Ministerial Declaration required the General 
Council to report to the Fifth Ministerial Conference in 2003 on progress the Group was making in its examination of the relationship between trade, debt  and finance, and of any possible recommendations 
it might wish to make.  That report was contained in WT/WGTDF/2.  It was agreed by the Group and 
endorsed by the General Council, and it containe d the detailed work programme that had been 
followed for the past two years.   
26. He also recalled that Paragraph h of the General Council decision of 31 July 2004, in 
WT/L/579, instructed the General Council and other relevant bodies to report to the Sixth Ministerial 
Conference in line with their Doha mandates.  Th e General Council would therefore be required to 
report to the Hong Kong Ministerial Conference at  the end of this year on progress the Working 
Group had made.  The Working Group needed to bear this in mind when preparing its report to the 
General Council, since this would not be the ki nd of routine annual report on the Group's activities 
that had been prepared at the end of 2004. He continued by saying that, since the Fifth Ministerial Conference in 2003, the Group had conducted an examin ation of all of the eight themes that it had 
agreed would form its work programme.  The last th ree of those themes had be en on the agenda of the 
present meeting.  One question for the Group to cons ider in preparing its report, therefore, was 
whether delegations felt that further examination of  one or more of these eight themes was necessary. 
A second question was whether delegations felt th at the Group was in a position for the General 
Council to make any recommendations to the Sixth Mi nisterial Conference on its behalf, in line with 
its Doha mandate.   
27. The representative of Benin, speaking on behalf of the ACP Group
, noted that at the last 
meeting of the Working Group, the ACP Group had expr essed their concerns with respect to the links 
between trade, debt and finance and developments in their own member States.  In that context, they 
had submitted a communication (WT/WGTDF/W/30) in which they expressed the view that the WT/WGTDF/M/11 
Page 6  
 
 Working Group should make specific recommendations  which could increase the multilateral trading 
system's capacity to contribute to a search for a durable solution to foreign debt problems in 
developing countries, particularly in LDCs.  In their communication, they had also said that coherence 
between international trade and policies related to finance and the monetary system should be 
strengthened with a view to making the multilateral trading system more viable and stable. The ACP 
Group had therefore recommended that the Working Group be turned into a standing or regular 
Committee and had made specific proposals in that  regard.  The Group's most recent communication 
(WT/WGTDF/W/32) was intended to complement and strengthen the original submission.  There was 
a need for the WTO to become more involved than had been the case in the p ast in helping to solve 
problems in developing countries, in particular with regard to those linked to the burden of debt which 
negated the efforts being made to achieve development goals.  The comp lexity of the problem of debt 
was such that it could only be dealt with effectiv ely if this was done in an integrated and global 
manner.  For the multilateral trading system to c ontribute effectively to the development of Third 
World countries it was imperative that those countries emerged from the cycle of debt and were given the possibility to use their export earnings not to pa y off debt but rather to invest in wealth and 
employment.  In this regard, the role of the multila teral trading system was vital because of the real 
contribution it could make towards solving problems  linked to the drop in export earnings and with 
respect to the mechanisms of coherence between tr ade, finance and development.  It was in that 
context that the ACP Group had submitted a number  of proposals.  The Group noted and welcomed 
the conclusions of G8 Finance Ministers at thei r recent meeting in London in which it had been 
proposed that the process of debt cancellation w ith respect to IMF, World Bank and African 
Development Bank loans be completed for certain developing countries . The ACP Group invited the 
Heads of States to approve these conclusions at the forthcoming G8 Summit and, moreover, asked that the scope of these initiatives be broadened to  ensure that those developing countries which 
needed this relief to support their initiativ es in favour of development could do so.  
28. In the interests of institutional strengthening of the work program on trade, debt and finance, 
the ACP Group invited Members to agree on the esta blishment of a regular Committee on trade, debt 
and finance.  Whilst awaiting the establishment of such a Committee, specific recommendations for 
action should be addressed to the Genera l Council for adoption.  These included, inter alia , the 
following:  (a) recommendations to the relevant institutions to encourage the immediate and full 
cancellation of debt of developing countries suffering consequences of unfavourable terms of trade;  
(b) recommendation that developed countries cancel b ilateral debts including export credits of  those 
developing countries that are suffering from a drop in their share of international trade because of, 
inter alia , subsidies by developed countries and dramatic  fall in prices of primary commodities;  (c) 
recommendations of appropriate measures that coul d help increase exports, notably through durable 
technical and financial assistance to alleviate th e drastic fall and volatility of export earnings;  (d) 
recommendation to exempt developing countries from undertaking additional measures to liberalize in 
sectors that are sensitive or important to their de velopment needs;  (e) recommendation to set up a 
mechanism to review debt from the point of view of trade.  This mechanism would make it possible 
for the General Council to adopt recommendations on actions to be taken, and provide developing 
countries with temporary and non-reciprocal concessi ons, the goal being to generate an increase in 
developing-country exports as well as allowing th em to diversify their export base and increase 
competitiveness;  and (f) recommendation to allo w developing countries to make use of an 
accelerated procedure to take preventive or correctiv e measures to deal with financial crises within 
appropriate deadlines. Should it not be possible to put these measures into practice before the 
establishment of a regular Committee on trade, debt a nd finance, the ACP Group considered that they 
should be automatically included in the remit of  such a Committee.  The ACP Group counted on 
Members' cooperation for a constructive exchange of  views so that progress could be made in this 
area and a consensus achieved acceptable to all.      
29. The representative of Canada  agreed that any possible recommendations should come out of 
the examination process, which was looking at a br oad and complex range of themes.  The mandate  WT/WGTDF/M/11 
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 referred to "any possible recommendations" so Members should discuss this, but there was no 
requirement to come up with recommendations.  The Working Group was to report to the General 
Council and should not prejudge a decision by the General Council.  He thanked Benin for the 
contribution from the ACP Group but expressed some  concern that the submission blended process 
and substance.  He followed up with a number of questions regarding the proposal: first, what 
relationship there was between this  Group and other bodies, something that should be considered very 
carefully.  He also commented that debt cancellati on, reduction and relief was not an area where he 
could take decisions.  With respect to paragraph 6(d) , he considered that this issue of an exception for 
developing countries not being re quired to undertake commitments in sectors relevant to their 
development needs exceeded the scope of the Working Group. With respect to subparagraph 6(e), 
which proposed a trade-related debt review, he questioned as to what ty pe of debt would be relevant 
to trade.  With  regard to sub-paragraph (f) which proposed a fast-track  procedure to undertake 
preventive or remedial measures ag ainst financial crises, he wondered what was not working in the 
existing system. He noted the existence of the pruden tial carve out in the area of financial services and 
the balance-of-payments provisions in both the GA TT and the GATS.  He thought it would be useful 
if the proponents could give more explanation of the specific problems in the existing system. 
30. The representative of Argentina  thanked the ACP countries for th eir latest contribution. First, 
he wished to address the general task ahead of  the Group. He considered that one of the 
recommendations to the General Council should be a conclusion that arose naturally from the issues 
that had been examined and it was possible that  this could point to the establishment of an 
institutional mechanism to examin e these issues further.  His delegation firmly supported the 
approach taken in the proposals submitted by the ACP Group on debt.  He emphasized that debt was a 
core problem and the task of the Working Group was to identify how the WTO could contribute to help developing countries with high foreign debt to  overcome this problem, i.e., whether the current 
WTO rules contained the tools to help countries overcome problems caused by external debt.  He 
noted that the only measures that could be ta ken under WTO rules under the balance-of-payments 
provisions were import restrictions. These could ha ve a harmful impact, whereas increasing exports 
was necessary to ensure income and financial stability were maintained.  In his view, the provisions of 
the WTO agreements could be reviewed to devel op the necessary instruments so that countries with 
high foreign debt or balance-of-payments problems w ould be able to increase their exports of goods 
and services and to diversify into higher value added products;  particularly given that subsidization 
by developed countries aggravated the situati on. One option was to establish a cooperation 
mechanism for developing countries that should include an improvement in market access for 
countries that were facing critical periods.  Developi ng countries should, in addition, be able to make 
use of different measures in order to promote expor ts, while moderation should be exercised in terms 
of legal obligations.  In his view, there was a gap in  the rules of the WTO to help countries that were 
facing high debt and balance-of-payments crises.   
31. The representative of Japan
 said that she understood the concerns of the ACP Group that the 
report to the General Council should be based on the ex amination of themes and that coherence within 
the WTO was very important.   
32. The representative of the European Communities  welcomed the revised proposal from the 
ACP Group and said she understood fully the underlying concerns.  The problems faced by developing countries were multiple and required co mprehensive solutions in cluding sound domestic 
policies.  The WTO was well placed to contribute to raising growth thr ough its rules and tariff 
negotiations and this was its main contribution.  At the same time, she drew the attention of the Group 
to the work being carried out under the Coherence manda te and the need to strengthen this work.   She 
said her delegation remained open to expanding the Working Group into a standing Committee but 
considerable work still needed to be  done to ensure that the mandate remained within the remit of the 
WTO and that overlaps were avoided. WT/WGTDF/M/11 
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 33. The representative of the United States
 thanked the ACP Group for its papers.  Noting the 
representative of Benin's request to be specific, sh e said that the discussion of the debt/finance issue 
and the role of trade in the communications was funda mentally lacking in coherence, since it ignored 
the role of Member countries’ macroeconomic and st ructural polices that were so often the source of 
problems. Foreign borrowing contributed more to  growth when domestic resource allocation 
mechanisms channelled such funds toward areas of highest return, usually under competitive market 
conditions.  Service of the foreign debt incurred w as less likely to raise problems when the investment 
funded by the debt resulted in a competitive and productive addition to domestic output potential.  
When debt was thus incurred to such good na tional purpose, a cause of international financial 
disturbance was lessened and significant balance-o f-payments adjustment processes, when necessary, 
were facilitated. Trade liberalization by all Memb ers, supported by sound domestic economic policies, 
could contribute to the healthy allocation of inv estment made possible by foreign capital, and lessen 
problems associated with debt service and balan ce-of-payments adjustment.  For any individual 
developing-country Member, the relevant salutary tr ade liberalization was by the Member itself, as 
well as by its trade partners, in developing a nd high-income group of countries alike.  The 
communication, however, emphasized how trade a nd trade policy had purportedly worsened the 
situation of developing countries as a group with  respect to economic development, and the 
management of foreign and intern ational financial issues.  The narrowness of the scope of the paper 
excluded the role of domestic policy distortions an d import restrictions among developing countries in 
understanding the nature of such developmental, debt  and financial problems.   It was significant to 
note in this regard that some 70 per cent of the tariff duties imposed on developing-country exports 
were imposed by other developing countries.  She we nt on to say that, in its terms of reference, the 
ACP communication presented a list of issues that were already appropriately covered in other 
negotiating groups (e.g., balance-of-payments restrictions), by the Committee on Trade and 
Development (CTD), or were not in the purview of the WTO (e.g., exchange rates and debt issues).   
The ACP terms of reference for the contemplated Committee on trade, debt and finance touched on 
the following topics: balance-of-payment, debt  issues; exchange rate volatility; commodity 
diversification and pricing; capita l accounts and exchange rate liber alization; technical assistance;  
market access, tariff escalation, preference schemes; forgiveness and reduction of foreign debt; coherence and sequencing of deve lopment-oriented policies, including trade liberalization;  and 
TPRM review of developed countries' policies on development assistance and debt reduction. The 
proposal for a new Committee on trade, debt and finan ce appeared, in the view of her delegation, to 
coincide with  the mandate of the Committee on Trade and Development.  The CTD was the forum 
for discussion of all cross-cutting matters of special interest to developing countries, in particular 
those that had been identified in the terms of refe rence cited in the ACP paper.  It also served as a 
focal point for consideration and coordination of technical assistance work on development in the 
WTO and its relationship to deve lopment-related activities in other multilateral agencies.  Further 
obviating the need for the establishment of a Committ ee on trade, debt and finance in her view, but 
more importantly adding support to  her feeling of the outcome of the discussions to date in the 
Working Group, and in light of the proposal tabled by the ACP Group and the overlaps in the discussions of the last two years, her delegation felt that the recommendation to the General Council 
be to subsume this Working Group under th e Committee on Trade and Development.  
34. Regarding WT/WGTDF/W/32, this communicati on addressed outstanding de bt of developing 
countries with international financial institutions  and individual governments.  Her Government 
believed that certain of its instructions were out side the competence of the WTO and the mandate of 
the Working Group, and therefore could not agree to these proposals.  In the context of the coherence 
initiative, the IMF and World Bank, had undertaken a number of initiatives, such as providing advice 
and assistance for those willing to undertake tax a nd trade reform efforts in the context of sound 
economic programmes.  The IMF had opened, or woul d open, regional centres in the ACP region. The 
World Bank offered programmes to provide substan tial financial support for tax reform in those 
countries that asked for such help.  For example, structural lending by the Bank could provide a 
bridge, while the borrower reformed its tax policies and improved its tax administration, and the Bank  WT/WGTDF/M/11 
 Page 9 
 
 
 had consistently found that the economic/financial return on these operations easily offset the costs of 
the loans. 
35. The representative of China  thanked the ACP Group for its contributions and expressed the 
view that the report to the General Council be b ased on the examination undertaken during the past 
two years.  He supported Argentina's suggestion th at  the  WTO could design more instruments to 
help developing countries alleviate th eir debt burden.  He also agreed that the Working Group should 
avoid duplication with other bodies and that recomme ndations be made in c oherence with other WTO 
bodies and international organizations.  He reserved his delegation's right to make further comments.  
36. In conclusion, the Chairman  proposed to hold at least two informal meetings during the 
month of September to discuss and draft the Grou p's report to the General Council ahead of the 
Group's next formal meeting scheduled for 3 and 4 October – although the meeting might last only 
one day.  It was so agreed . 
 
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