. /.  WORLD TRADE  
ORGANIZATION  WT/MIN(05)/ST/143 
17 December 2005 
 (05-6149) 
MINISTERIAL CONFERENCE 
Sixth Session Hong Kong, 13 - 18 December 2005 Original:   English 
 
 
INTERNATIONAL MONETARY FUND (IMF) 
 
Statement by Ms Anne O. Krueger
 
First Deputy Managing Director  
 
(Speaking as an observer) 
 
I am pleased to have this opportunity to address the plenary session on behalf of the 
International Monetary Fund.  As we all know, th e Doha Development Round has reached a critical 
stage, and I welcome the chance to  reiterate the Fund's strong support both for trade liberalization and 
for the efforts of all those involved in these negotiati ons as they seek to reach an ambitious agreement.  
The stakes are high.  A successful outcome to  the negotiations will preserve and strengthen 
the world trading system, and, as a consequence, it will give impetus to accelerated global economic growth.  More rapid global growth benefits all, but especially new entrants in world markets.  Many 
low income countries have yet to experience the full be nefits of their own trade liberalization.  These 
benefits are greater (and adjustment costs less) when undertaken against the backdrop of a healthy 
world economy.  A successful Doha Round will cons olidate the progress made over the past sixty 
years and avoid the damage that would be inflic ted on the world economy by a slide back towards 
protectionism. 
The history of the past six decades is clear:  global economic growth and prosperity are 
inextricably linked with the expansion of world tr ade.  Over that period the world economy has grown 
at a pace without historical parallel.  Most c ountries have achieved rising living standards and poverty 
reduction on a scale that could hardly have been imagined. 
And the multilateral economic framework establishe d at Bretton Woods in 1944 is what made 
this global expansion possible.  The progressive lib eralization of world trade, overseen first by GATT 
and then the WTO, fuelled the rapid expansion of trade that, in turn, made possible rapid economic 
growth.  The IMF, for its part, is charged with maintaining international financial stability and so 
promoting the expansion of trade.  We have cons istently worked to support the work of GATT and 
the WTO in liberalizing and strengthening the world tr ading system;  and we continue to regard our 
work in this area as central. 
It is easy to forget, in the detail of the negotia tions, just how much all countries stand to gain 
from an agreement simply because a successful outcome will ensure th e continued expansion of trade 
and so underpin future global growth. 
Experience has repeatedly shown that the more open to trade economies are, the more rapidly 
they grow.  No country has achieved sustaine d rapid growth without opening up.  Of course, 
multilateral trade liberalization brings the greatest bene fits.  But let us also remember that unilateral 
trade liberalization brings significant rewards:  and most of the gains accrue to the country 
undertaking liberalization. 
This is the Doha Development Round, Madam Ch airman, and the focus is, rightly, on helping 
the world's poorer countries experience the full benef its of more open trade.  Above all, that means WT/MIN(05)/ST/143 
Page 2  
 
 recognizing the benefits to be had from trade liber alization by those countri es.  Developing economies 
will gain most from further trade liberalization, in  large part because the remaining trade barriers are 
highest.  When other countries are also liberalizing,  those potential benefits are even greater, as all 
recognize. 
The international community has an important ro le in helping developing countries reap the 
full benefits of liberalization.  There is scope to help strengthen trade capacity in poor countries.  The 
Fund has been working in this area for many years both through the provision of policy advice during 
bilateral sessions with Member countries and thr ough the provision of technical assistance, helping 
Members in a variety of ways, such as stre amlining customs procedures and rebalancing 
administrative tax systems. 
The international community can also provide reassurance to poor countries concerned about 
potential short-term adjustment costs, and here, too, the Fund has an important role. 
Two years ago, in Cancún, I announced the crea tion of the Trade Integration Mechanism, or 
TIM, which was introduced formally last year.  Th e TIM offers financial support for countries facing 
temporary adjustment shocks from liberalization by other countries.  More recently, we have 
introduced so-called "floating tranches" under f und supported programmes:  these become available 
when a government undertakes reforms that might lead  to a temporary worsening of the balance of 
payments. 
And just two weeks ago, the Fund's Execu tive Board approved a new Exogenous Shocks 
Facility.  This is available on concessional terms to  low-income countries faced with shocks that 
cause a sudden and sharp deterioration in thei r external balance - and where the underlying 
macroeconomic framework is sound. 
And when Fund financial assistance is not a ppropriate, for whatever reason, we support 
countries seeking financial help from other sources. 
The Fund is also a participant in the integrat ed Framework.  This is a potentially useful 
vehicle to help establish priorities for providing trade related assistance and we welcome the work 
under way to enhance the framework.  
The draft Ministerial Declaration envisages continued Fund involvement in the provision of 
"Aid for Trade ".  The Director-General will consult with  us, and with other parties, on ways to 
provide increased financial resources for developing c ountries.  We regard our work in this area as 
vital:  anything we can do to help poor countri es achieve the gains from liberalizing trade is 
worthwhile and we encourage donor countries to play their part in this work as well. 
I need, however, to address one specific question regarding the dr aft Ministerial Declaration.  
In Annex F there is a reference to Fund conditionality :  that it should not interfere with the rights of 
WTO Members.  The Fund's conditionality is designed in consultation with Members to help achieve 
balance of payments stability.  Indeed, the Fund  works actively to encour age Members to be full 
participants in the world trading system and seek s to assist Members in this.  Fund conditionality 
should not be subject to WTO constraints and is  consistent with members' WTO obligations. 
But let me conclude by returning to the point I made at the outset.  There are gains to be had 
by all in an open international economy.  There are enormous and lasting gains to be had from further 
trade liberalization.  And liberalizing countries will gain more in the context of multilateral opening 
and the faster growth that will accompany it.  Th e Fund stands ready to support this process in 
whatever way it can. 
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