WORLD TRADE  
ORGANIZATION  WT/TF/COH/S/11 
16 February 2006 
 (06-0662) 
  
  
COHERENCE IN GLOBAL ECONOMIC POLICY-MAKING: 
WTO COOPERATION WITH THE IMF AND THE WORLD BANK 
 
 
Report (2005) 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 th e World Bank", to inform Members about the 
activities carried out by the WTO under its cooperati on agreements with the IMF and the World Bank. 
2. Cooperation between the WTO, the IMF and th e World Bank continued to expand across a 
range of activities in 2005 – from staff contacts and information sharing, to attendance at meetings, 
arrangements for institutional coope ration, and joint initiatives at senior levels.  This reflects the 
importance of the Doha Development Agenda (DDA) and underlines the importance of Bank and 
Fund support to a successful outcome.  More broadl y, coherence is a response to the globalization of 
the world economy and the growing interdependence of trade, finance and development policies.  
Trade liberalization and strengthened interna tional rules are increasingly key to promoting 
development, facilitating adjustment  and encouraging financial stability.  In the same way, greater 
financial stability and stronger economic capacity in developing countries are essential if the benefits 
of more open trade are to be realized.  The Direct or-General has made strengthening coherence one of 
his priorities – as have Mr. Rodrigo de Rato, the Managing Director of the IMF, and Mr. Paul Wolfowitz, the President of the World Bank.  The importance of further intensifying 
cooperation among the three institutions was also  recognized by Ministers at the Hong Kong 
Ministerial Conference in December where they ga ve the Director-General a mandate both to build 
upon existing cooperation with the IMF and the World Bank and to prepare recommendations for 
operationalizing Aid-for-Trade. 
3. The scope for cooperation – both formal and info rmal – is extensive. The three institutions 
share common objectives in the trade area, and although mandates, functions and capabilities differ, 
the need for mutually supportive policies and coor dinated responses is increasing.  The IMF's primary 
concern is financial stability and economic growth, for which a strong and liberal multilateral trading 
system is seen to play an increasingly important role .  In addition to suppor ting the Doha negotiations, 
there has been a significant increase in the IMF's trad e-related policy analysis, surveillance, technical 
assistance, and adjustment lending.  The IMF has increased the trade focus of the World Economic 
Outlook (WEO) and its Article IV consultations; it has stepped up its capacity to provide technical 
assistance, especially in customs administration and tariff policy; and it has clarified its readiness to 
support Members dealing with the macroeconomic effect s of price or other shocks through its Poverty 
Reduction and Growth Facility.  Tangible examples  of the IMF's increasing focus on trade are its 
2004 Trade Integration Mechanism (TIM) – designed to provide financial support to Members that 
face a net negative impact on their balance of paym ents as a result of implementation of multilateral 
trade commitments – as well as its new Exogenous Shocks Facility that was introduced in 2005. 
                                                     
 
1 The last report is contained in WT/TF/COH/S/10 of 16 February 2005. WT/TF/COH/S/11 
Page 2  
 
  4. The World Bank's trade work relates to its br oader development role and its extensive in-
country expertise and involvement.  Its trade stra tegy involves promoting a Doha Round outcome that 
maximizes developing-country growth and poverty reduction; helping developing countries to 
integrate trade policies into their national developm ent strategies; and playing a constructive role in 
helping to shape the growing agenda on regionalism.   Over the last four years, the Bank has placed 
increasing emphasis on promoting stronger growth th rough trade.  The coverage of the Bank's 
diagnostic work on trade has expanded;  trade-rela ted lending is increasing, with commitments for the 
period FY2004-2006 reaching $3. 8 billion, a third larger than over the previous eight years; and there 
has been an expansion of the Bank expertise on trade,  with the appointment of  additional staff in the 
regions and at headquarters, especially in the Trade Department. 
5. More generally, both the Bank and the Fund ha ve made a concerted effort to emphasize the 
economic and development rationale for freer multilateral trade, which has raised their profile in the 
trade area.  Communiqués, speeches and press articl es have focused on a range of issues, including 
the systemic impact of agricultural policies, the potential for trade to address poverty reduction, the 
links to debt sustainability, and the general ca se for free trade's contribution to global economic 
growth and financial stability.  
6. Decisions taken at the WTO's Hong Kong Mini sterial Conference in December identify 
significant new areas where WTO cooperation with th e IMF and the World Bank should be expanded.  
In particular, Ministers agreed to increase th e WTO's contribution to expanding Aid-for-Trade, 
building upon discussions which ha ve taken place between development and finance ministers in 
various fora, including  the Development Committee of  the World Bank and the IMF.  In this respect, 
the Director-General was invited to create a task  force that will provide recommendations to the 
General Council by July 2006 on how to operatio nalize Aid-for-Trade.  The Director-General was 
also mandated to consult with Members, as we ll as with the IMF and World Bank, relevant 
international organizations and the regional development banks w ith a view to reporting to the 
General Council on appropriate mechanisms to se cure additional financial resources for Aid-for-
Trade.
  Ministers have further encouraged improved coordination in existing areas of technical 
assistance and capacity building, such as the Integrat ed Framework, inviting the Director-General to 
reinforce partnerships and coordination with ot her agencies and regional bodies in the design and 
implementation of technical assistance programmes, so  that all dimensions of trade-related capacity 
building are addressed in a manner coherent with the programmes of other providers.  More broadly, 
Ministers encouraged the Directo r-General to build upon the cooperation already achieved with the 
IMF and the World Bank under the Coherence Mandat e, and to expand the de bate on international 
trade and development policy ma king and interage ncy cooperation.2   
 
(a) Framework for "Coherence" among the three Institutions 
 
7. The WTO's mandate to seek greater cooperation with the IMF and the World Bank is set out 
in the 1995 Marrakesh Declaration on Coherence – elaborated in formal cooperation agreements 
concluded at the time of the 1996 Singapore Ministerial Conference3 – as well as in various 
agreements delineating the IMF's role  in balance-of-payments matters.4  The widening of the trade 
                                                      
2 WT/MIN(05)/W/3/Rev.2, para. 56. 
3 WT/L/194 of 18 November 1996. 
4 See, for example, WTO Agreement, Article III.5; GATT Articles XV, XII, and XVIII; and GATS 
Articles XI, XII, and XXVI.  WT/TF/COH/S/11 
 Page 3 
 
 
 
   policy agenda into ne w areas such as services
5, domestic regulation, a nd now trade facilitation6 has 
led to a broadening of the formal requirement for coherence with other inte rnational organizations, 
and with the IMF and World Bank in particular.  
8. Although the IMF and the World Bank have no  equivalent of the WTO's "coherence 
mandate", both institutions have va rious formal and informal requirements to cooperate with the 
WTO across a range of issues.  The IMF's work on tr ade matters is consistent with one of its core 
purposes which is "to facilitate the expansion and ba lanced growth of world trade", as set out in 
Article I(ii) of its Articles of Agreement.  Trade issues also fall under the IMF's surveillance mandate 
(Article IV), when they have a fiscal impact or  are a sign of exchange rate inadequacy, and its 
requirement (under Article X) that Fund financial support be consistent with its purposes.  More 
broadly, Article X of the IMF's Articles of Agre ement instructs the Fund to cooperate with other 
international organizations  in related fields.   
9. Trade is also a key element of the World Bank's core mandate to facilitate economic 
development through lending and technical assist ance.  While the requirements for World Bank 
cooperation with the WTO are less extensive than th ey are for the IMF, there are a number of areas 
where the WTO is mandated to work closely with the World Bank, including the Decision on 
Measures Affecting Net Food Importing Countries, the Standards and Development Facility, and 
various other joint technical assistance undertak ings, such as the Integrated Framework.  
(b) Consultation between the Director-General a nd the Managing Director of the IMF and the 
President of the World Bank 
10. One notable development in recent years is th e growing dialogue and joint action at senior 
management level.  The WTO Director-General no w regularly attends the Annual meetings of the 
International Monetary and Finance Committee (IMFC) and the Development Committee.  The 
Director-General was invited to address both meetin gs in October 2005, where he urged ministers to 
push for a successful outcome at the Hong Kong Mini sterial Conference in December, and pledged to 
work with the Fund, the Bank and other stakeholders  to advance an "Aid-for-Trade" initiative in 2006.  
The past year has presented several opportunities for the Director-General to hold bilateral discussions 
with Mr. Wolfowitz and Mr. de Rato, including at the October meetings of the IMFC and 
Development Committee, at the APEC Ministerial M eeting in November, at other intergovernmental 
meetings, and through various teleconferences.  Discussions have covered the full range of trade-
related and coherence issues, including progress in  the DDA, actions that could be taken to help 
advance the negotiations, ways in which the three in stitutions could cooperate more effectively in the 
provision of trade-related technical assistance, capaci ty building and training, and the need to advance 
Aid-for-Trade. 
11. The growing engagement of senior Fund and Ba nk management with the WTO is equally 
evident.  The heads of both organizations have used their voice on numerous occasions to support an 
ambitious outcome for the DDA and a strengthening of the multilateral trading system.  Joint press 
communiqués and press articles highlighting the deve lopment benefits of an ambitious Round have 
                                                      
5 For example, the GATS includes market access comm itments in financial services, a core area for the 
IMF.  Besides its provisions on current payments and transfers, the GATS also regulates certain capital 
movements associated with specific commitments.   
6 A novel aspect of the framework for the Trade F acilitation negotiations is that the implementation of 
commitments will take into consideration implementati on capacities and support through technical assistance.  
The IMF and the World Bank are officially mentione d (along with the OECD, UNCTAD, and WCO) as key 
supporting agencies. WT/TF/COH/S/11 
Page 4  
 
  been published in the run up to the WTO's 2005 Ministerial Conference in Hong Kong.  Mr. de Rato 
and Mr. Wolfowitz have also delivered a number of speeches on the benefits to the world economy, 
and to developing countries in partic ular, of multilateral trade liberalization.  In recent years, the Fund 
and the Bank's governing bodies have repeatedly  issued communiqués urging Members to move 
swiftly on the DDA and to aim for an ambitious outcome.  The IMF's Executive Board Committee on 
Liaison with the WTO (CWTO), which monitors IM F/WTO relations and IMF work on trade issues, 
has been particularly active in the past four year s, meeting eight times since the beginning of the DDA 
negotiations in late 2001.   
12. The WTO Secretariat is currently working with the staff of the Bank and the Fund to identify 
the roles the three institutions can play in addressi ng problems of the cotton sector in certain exporting 
Member countries and considering what cooperativ e efforts might be made to address the trade 
restricting and distorting effects of subsidies.  Th e Director-General has also identified as one of his 
priorities increased attention by the WTO to prom oting greater coherence in global economic policy-
making and cooperating with othe r intergovernmental organizations to support WTO Members' 
activities carried out pursuant to the Doha Ministeria l Declaration, not least in the area of trade 
facilitation.  
13. An outstanding issue of concern that both Mr. de Rato and Mr. Wolfow itz have conveyed to 
the Director-General and Members is that the request s of their organizations for observer status in the 
Trade Negotiating Committee (TNC) and its subsidiary bodies are still pending.   
(c) WTO Observership in IMF and World Bank Meetings 
14. Under the WTO/IMF/World Bank cooperation agre ements, the WTO Secretariat is invited to 
observe meetings of the Executive Boards of th e IMF and the World Bank on general and regional 
trade policy issues, including the formulation of Fund or Bank policies on trade matters.   
15. The WTO Secretariat was present at all relevant meetings of the IMF and the World Bank in 
2005.  The WTO Secretariat attended World Bank Executive Board meetings on "Global Economic 
Prospects in Developing Countries" and on "Aid-fo r-Trade".  The Secretariat was also present for 
IMF Executive Board meetings on the "World Economic Outlook (WEO)" and "Aid-for-Trade".  In 
addition, in 2005, the Secretariat attended two meetings of the CWTO, as well as two Deputies 
Meetings which, among other things, helped prepare the content of the IMFC communiqué at the Bank/Fund Annual Meeting.   
(d) IMF and World Bank Participation in WTO Meetings 
16. Under the cooperation agreements, the IMF a nd the World Bank are invited to attend as 
observers meetings of most WTO bodies (with the exception of the Dispute Settlement Body and the 
Committee on Budget, Finance and Administration).  As noted above, requests from the IMF and the 
World Bank for observer status in the TNC a nd its subsidiary bodies are still pending.   
17. Following a 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, representa tives of the IMF and the World Bank have been 
invited to participate in informal General Council meetings on Coherence.  Ms. Anne Krueger, First 
Managing Director of the IMF, and Mr. Danny Le ipziger, Vice President, Poverty Reduction and 
Economic Management, World Bank, represented thei r respective organizations at the Hong Kong 
Ministerial Conference in December 2005.  WT/TF/COH/S/11 
 Page 5 
 
 
 
   (e) General Contacts pursuant to Paragraph 10 of the IMF Agreement and Paragraph 8 of the 
World Bank Agreement 
18. 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. 
19. The WTO Secretariat and the staff of the IMF and the World Bank also consult, as necessary, 
on issues of possible inconsistency between m easures under discussion with a common Member and 
that Member's obligations under the WTO Agreement or , in the case of the Fund, under its Articles of 
Agreement.  Staff take care to ensure that cooperation neither encroach es on institutional mandates 
nor leads to cross-conditionality or extra conditions on WTO Members. 
20. In addition to contact among headquarters' sta ff, both the IMF and the World Bank maintain 
offices in Geneva which are in the forefront of their working relationship with the WTO. 
A. P
OLICY ANALYSIS , SURVEILLANCE , RESEARCH , AND INFORMATION EXCHANGE  
21. Another important area of coherence among th e three organizations – and one where WTO 
Members have urged even greater cooperation – is  trade-related policy analysis, surveillance, and 
research.  Staff of the three organizations collaborate on analysis and research 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 2005, and they have responded 
positively to requests from WTO bodies for analytical work and input.   
(a) Policy Analysis and Surveillance 
22. Two main vehicles for IMF policy analysis and surveillance are the WEO and the Article IV 
consultations with individual member countries in which trade policy reform has increasingly featured 
as a key element of the growth agenda.  Trade topics covered in the WEO have touched on broad 
aspects of the global trade agenda, including issues surrounding the Doha Round, the impact of 
China's emergence as a trade power, the relationship between trade and financial integration, and the 
risks to the multilateral trading system. 
23. The IMF also typically examines trade policies in  its Article IV surveillance as part of its 
overall macroeconomic assessment of Member co untries.  In response to the new challenges 
highlighted by the DDA, the Fund has stepped up its surveillance of trade-related issues in the past 
three years, especially with regard to policy spillovers from high-income countries (and their wider 
impact on the prospects of poorer countries), trad e-related macro vulnerab ilities, and regional trade 
initiatives.  A staff review of trends over the period  2000-04 suggests that the coverage of trade issues 
in general, and specifically of the spillover eff ects of high-income country policies (including 
reporting on their positions in the DDA), has strengthe ned significantly – although one issue raised is 
whether the analysis of the systemic impact of trade policies should be expanded to cover larger 
developing countries as well.  
 WT/TF/COH/S/11 
Page 6  
 
  24. It should be noted that the number of struct ural conditions attached to the provision of 
financial assistance by the IMF, including in the tr ade policy area, has fallen considerably since 2001, 
and that the IMF has been striving to be more flexible and responsive in discussing alternative 
policies with governments requesting financial assistance.   
(b) Research 
25. The IMF has conducted considerable research on trade issues in recent years, and taken 
organizational steps to better coordinate this effort .  IMF staff have prepared several research papers 
in support of various aspects of the Doha Round, including on issues related to market access for developing-country exports and re ports updating the Executive Board on the status of the Round and 
its implications for the IMF.  Research prepared at the request of the WTO has included analysis on 
balance-of-payments safeguards;  export subsidies;  the financing of losses from preference erosion;  
fiscal aspects of tariff reform;  trade policy condi tionality;  and the link between exchange rate 
volatility and trade.   
26. Work Bank analytical work and research covers a wide range of multilateral trade issues, with 
a particular focus on agricultural reform (includi ng cotton) and trade facilitation from a development 
perspective.  In January 2005 the Bank launched a book entitled Global Agricultural Trade and 
Developing Countries  which focuses on specific commodity market structures and their implications 
for the DDA negotiations.  More generally, the Bank is continuing to refine its assessment of the 
development and policy impact of alternative agricu ltural reforms – with the intention of using this 
emerging analytical framework to press for ambitious  reforms in the Doha negotiations.  In February 
2005, the Bank also launched a Customs Mode rnization Handbook which has been widely 
disseminated.  The Secretariat and World Bank sta ff cooperate, where appropriate, in the preparation 
of the World Bank annual publications on "Global Ec onomic Prospects", which for several years was 
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 ag enda and through its Trade Policy Review (TPR) 
reports.   
27. The World Bank has complemented its growing trade-related operations with an outreach 
programme aimed at:   providing developing countries with new opportunities to discuss how the 
DDA can support development-oriented trade reforms;  informing them of the nature and scope of 
World Bank support for technical assistance and investme nt in trade-related projects;  and sensitizing 
countries to the gains from trade facilitation reforms.   
(c) Information and Data Exchanges 
28. 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 base s.  More generally, the IMF and the World Bank 
use information on trade, trade measures and rela ted issues from WTO sources – including the TPRs – 
particularly to ensure that their policy advice is consistent with WTO rules. 
29. 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 WEO.  Favourable consideration is given to specific additio nal requests pertaining to these data bases, as well 
as to requests for projections of individual country data.  WT/TF/COH/S/11 
 Page 7 
 
 
 
   30. Under the WTO/IMF cooperation agreement, the IMF makes available to the WTO, for the 
confidential use of the WTO Secretariat, electronic copies of IMF staff reports and related background 
staff papers on Article IV consultations and on the use of Fund resources for common Members and 
on Fund members seeking accession to the WTO, subj ect to the consent of the member concerned.
7  
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 docu mentation is now available to Secretariat staff 
through an electronic data base. 
31. The World Bank provides the WTO Secretariat access to the Bank's Economic and Social 
Database, as well as to the Statistical Annex of th e Global Economic Prospects and the Developing 
Countries.  Software developed at the Bank, provides a powerful tool to better analyze the 
consequences of the detailed proposals being consider ed in the Doha negotiations.  In its support on 
market access issues, the WTO Secr etariat has been making use of this software – which is offered to 
WTO Members free of charge – to analyze tariff and trade data. 
B. TECHNICAL COOPERATION  
(a) Trade-Related Technical Assistance and Capacity Building 
32. The IMF and the World Bank have considerable e xperience and expertise to share in the area 
of technical assistance and capacity building.  They  provide support to the Doha negotiations in this 
context through their own country programmes a nd through their participation in WTO technical 
assistance activities.  The IMF provides demand-driv en technical assistance mainly on fiscal and 
customs reform, and in the context of its Article IV consultations with low-income countries.  The 
World Bank provides an extensive programme of technical assistance activities in a range of trade-
related areas.  
33. The IMF is engaged in technical assistance a nd capacity building at different levels, from 
financing, to policy design, to the dissemination of  standards and training.  The main focus of the 
Fund's trade-related technical work is customs admi nistration modernization and tariff policy reform.  
On customs reform, the focus has shifted towards "s trategic technical assistance" – i.e. providing the 
overall framework for reform and continuing oversi ght, while leaving more detailed aspects for other 
donors to support.  On trade policy, technical assi stance usually takes the form of "one-off missions" 
that typically have a wider tax focus than just tr ade policy. A particularly important development in 
the Funds trade-related technical assistance work is  the provision of advice through the IMF's regional 
technical assistance centres in Africa, the Middle East, the Pacific Islands and the Caribbean.  
34. In addition to its direct training and technical assistance, either in response to specific needs 
or through its regional centres, the IMF's Article IV consultation process with its member countries 
provides an important channel for tech nical assistance and capacity building.  
35. In the World Bank, trade-related technical assi stance has expanded considerably, with the 
appointment of trade coordinators in each of the six regional departments of the Bank who are 
responsible for ensuring a strategic approach to cap acity building.  The World Bank Institute (WBI) is 
the principal provider of training to clients.  Its ob jectives are to assist clients in:  (i) the development 
of sound national trade policy;  (ii) their capacity to participate effectively in the WTO;  and (iii) their 
                                                      
7The 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/11 
Page 8  
 
  understanding of the benefits and costs of increased  openness.  All together, WBI technical assistance 
has reached more than 2000 participants including mo stly senior trade policy makers, negotiators, and 
developing-country researchers. 
36. Trade-related diagnostic work c ontinues to expand.  In FY 2005, diagnostic work was carried 
out in more than thirty-five countries with ten other regional studies looking at trade issues that 
affected several countries at a time – moreover, 80 per cent of this work took place outside of the IF 
(see below).  The analysis typically  looked simultaneously at issues of trade policy, infrastructure, 
customs and trade facilitation, and in some inst ances, aspects of the business environment.  This 
comprehensive approach has helped to underscore th e need for reforms in trade-related institutions, 
such as Customs, and this is being reflected in country programmes through growing lending for 
trade-related activities. 
(b) Trade Facilitation 
37. The IMF, and especially the World Bank, direct  a significant share of their trade-related 
activities towards trade facilitation – the IMF thro ugh its work on customs administration, and the 
World Bank through a broader programme of techni cal advice, institution building and logistics.  
38. Through its Trade Facilitation Initiative, the Ba nk has developed new tools to help improve 
the quality of operations and disseminate best practic es across the different regions, and has increased 
staffing in critical areas such as customs, port management and shipping security. It has also 
complemented its growing operational activities w ith an outreach programme designed to help 
developing countries approach the negotiations with the tools needed to make informed decisions, 
including through the creation of regional networks of experts to advise on negotiating proposals and 
issues.  The Bank estimates that its lending ope rations for trade facilitation activities – including 
institution building, physical infrastructure and trad e-financing – made up over 80 per cent of its total 
trade lending in the last three years.  Projected  commitments over FY04-06 at more than $1.2 billion 
triple the commitments for trade facilitation of  ongoing operations approved between FY96-03. 
(c) Doha Development Agenda Trade Capacity Building Database 
39. The IMF, the World Bank and the WTO contribut e to the Doha Development Agenda Trade 
Capacity Building Database (http://tcbdb.wto.org) which gives information on activities provided by 
bilateral donors and multilateral agencies.  In the firs t few years of its existence, this pooling of data 
has allowed for the possibility of higher degrees of coordination and c oherence to be achieved and has 
provided the means to identify areas wher e additional efforts can be applied. 
(d) Supporting WTO Accession 
40. The World Bank's efforts to assist countries acced ing to the WTO is also growing.  It has 
developed a Policy Note discussing the most common issues that are critical to ensuring a pro-
development outcome from the WTO accession process.  It is also stepping up its monitoring of negotiations in Geneva, offering information to the country teams of acceding countries on key 
developments and directions in the discussions, th eir potential impact, and areas where further work 
(including technical assistance) may be needed.  The Bank is also working with international partners 
to bring together negotiators from developing countr ies in fora where they can share information and 
experiences.  Two such events have already been he ld, in Berlin in November 2004, and in Geneva in 
January 2005.      WT/TF/COH/S/11 
 Page 9 
 
 
 
   (e) The Integrated Framework for Least-Developed Countries (LDCs) 
41. Another important cooperative effort in the area  of technical assistance and capacity building 
is the Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries 
(IF).  The IMF and the World Bank are two of the six core agencies, along with UNCTAD, UNDP, 
ITC, and the WTO.  The WTO provides services for th e IF Secretariat.  The IF, built on the principles 
of country ownership and partnership, has two obj ectives:  (i) to integrate trade into the national 
development plans such as the Poverty Reducti on Strategy Papers (PRSPs) of least-developed 
countries;  and (ii) to assist in the coordinate d delivery of trade-related technical assistance in 
response to needs identified by the LD C.   In total 32 LDCs are at various stages of the IF process.   
42. The first stage in the IF process involves a Diagnostic Trade Integration Study (DTIS) 
overseen by the World Bank.  This is the main instrument for identifying and addressing 
impediments, including supply-side constraints, that LDCs face in the process of integration.  The 
preparation of the DTIS and its inclusion in na tional development plans has resulted in increased 
attention and support for the country's trade priorities, reflected in a number of cases of increased resources for trade within government budget allocati ons and by development partners.  As of end-
2005, some 21 DTIS had been finalized since 2002, and 16 more were in the pipeline.  Following the 
completion of the DTIS, the IF is now movi ng from diagnostics to implementation.   
43. One key to ensuring coherence in the implemen tation phase is the successful integration of 
trade-related actions into P overty Reduction Strategies (PRS).
8  In practice, however, a recent review 
of the IF process concluded that the link to PRSs remains tenuous.  Part of the problem is that the DTISs are relatively new (most are less than two years old) and have not had sufficient time to be 
integrated into the more established PRS process.  Part of the problem also relates to wider 
weaknesses with the structure and effectives of th e PRSs themselves. However, the IF has also 
struggled with capacity bottlenecks, in-country coordination problems, and poor donor follow up.  Many of these issues are likely to be addressed by a Task Force that was established in October 2005 
to examine ways to enhance the IF.     
(f) WTO Training Institute  
44. 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. 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.   
(g) The Standards and Trade Development Facility 
45. The Standards and Trade Development Facility (STDF) was established in 2002 by the WTO 
and the World Bank (in cooperation with FAO, W HO, OIE, Codex Alimentarius) to enhance the 
capacity of developing countries in the standards area through cooperation between the relevant 
institutions in SPS-related activities, including thr ough the development of joint institutional projects 
and provisions of STDF-funding to projects in developing countries. 
                                                     
 
8 In 1999, the IMF and World Bank introduced the Poverty Reduction Strategy to strengthen their 
approach to providing assistance to low-income countries including debt relief provided under the enhanced 
HIPC Initiative.  The essence of the new approach was to link concessional assistance from the IMF and the 
World Bank (IDA) directly to the development and impl ementation of national development strategies, set out 
in Poverty Reduction Strategy Papers. WT/TF/COH/S/11 
Page 10  
 
  46.  Managed by the WTO, the STDF is both a fi nancing and a coordinating mechanism.  An 
expanding portfolio of projects is being commiss ioned providing grant financing for private and 
public organizations in developing countries seeki ng to comply with international sanitary and 
phytosanitary (SPS) standards and hence gain or ma intain market access for their food exports.  One 
key element to expanding the Facility is the focus on providing technical assistance for least-
developed countries to meet SPS requirements, in pa rticular by addressing priority issues identified 
through the IF process. 
(h) Joint Vienna Institute 
47. The WTO has also been co-sponsoring the Joint Vi enna Institute (JVI) together with the IMF, 
the World Bank, the BIS, OECD, EBRD and the Austrian Government.  Certain programmes of the 
JVI are also supported by a number of other b ilateral donors.  The main aim of the Institute  is to 
provide training support  to countries in transition in order to ease the transition from centrally-planned to market-based economies. The countries that have recently joined the European Union have 
been "graduated" from the programmes which are now  more oriented towards Southern Europe and 
the CIS countries.  However, there  are no country  restrictions in the WTO seminars at the JVI 
and increasingly officials from other developi ng countries have also participated.  
48. The WTO Secretariat continues to offer its traini ng activities at the JVI in two separate ways.  
The WTO has been responsible for the two-week se gment on Trade Policy which is part of a longer 
course in Applied Economic Policy, and given by a ll sponsors of the JVI.  The segment is normally  
given twice a year and  occurs in two-week-long sessions.  In addition, the WTO organizes in Vienna  
its own seminars on various  WTO matters – typically on WTO agreements and negotiations.  The 
seminars have recently covered subjects such  as trade and environment, negotiating skills, non-
agricultural market access and dispute settlement.  In total, the WTO schedul ed seven seminars in 
2005 in Vienna, which, normally, were held over three to five days. 
49. The WTO continues to provide support as a Contri buting Member – with a view to joining as 
a Permanent Member in the future.  This would provide an opportunity for further enhancing WTO's 
trade capacity and activities at the JVI.   The previous  Director-General  held discussions with the 
Managing Director of the IMF on this issue.  Howe ver, there are legally binding time limits during 
which the matter will have to be resolved.  
(i) Trade and Development Centre   
50. 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. 
C. A
DJUSTMENT ASSISTANCE  
51.   There has been a growing concern among some  developing countries that multilateral trade 
liberalization under the DDA might adversely affect th eir balance of payment in the short term.  Three 
concerns are prominent:  the erosion of market ac cess preferences as a result of MFN liberalization; 
the impact of the phasing-out of textile quotas in ear ly 2005; and changes in the food terms of trade 
following a reduction in farm subsidies.  In re cent years, the IMF and the World Bank have 
announced new initiatives to increase the technical and financial support they are able to provide to 
developing countries during the trade negotiations a nd in the period of economic adjustment that will 
follow when implementing the results.   WT/TF/COH/S/11 
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   52. The most recent developments with regard to trade policy under Fund-supported programmes 
are the creation of the TIM in April 2004 and the launch of the 2005 Exogenous Shocks Facility 
(ESF).  Although the core of the Fund's mandate invol ves support for orderly external adjustment in 
the face of shocks, the TIM provides added assurances a nd represents the first explicit attempt to help 
Members adjust to shocks that emanate from the pr ocess of multilateral trade liberalization.  The TIM 
was designed to help mitigate the stated concerns by many developing countri es that implementation 
of WTO agreements might give rise to temporar y balance-of-payments shortfalls – through the 
erosion of tariff preferences, adverse changes in the terms of trade of net food importers, or the 
expiration of quotas under the WTO's Agreement on Te xtiles and Clothing (ATC).  Under the TIM, 
countries may request assistance, under existi ng Fund-supported programmes or under a new 
arrangement.  The Dominican Republic became th e second Member to obtain support in accordance 
with the TIM in January 2005, following Bangladesh in July 2004. 
53. The ESF provides policy support and financial as sistance to low-income countries facing 
exogenous shocks – defined as any event that ha s a negative impact on the economy and that is 
beyond the control of governments.  Although how the ESF might functi on in relation to trade-related 
shocks remains to be tested, it is available to countries eligible for the PRGF – the IMF's main 
instrument of financial assistan ce to low-income countries – but that do not have a PRGF programme 
in place. 
54. The Fund has also explained that it is fully prepared to help cotton-producing countries deal 
with the macroeconomic effects of price or other shocks, and that assistance could be provided through the PRGF.    
55. The World Bank's "Doha Development Initiativ e", launched at the Cancún Ministerial 
Conference in 2003, aims to assist poor countries to take advantage of new market opportunities and offset any adverse initial impacts of trade reform  resulting from the Doha Round.  It envisages new 
resources devoted to trade logistics (e.g., transpor t costs) and trade facilitation, in addition to 
enhanced sectoral lending in support of programm es designed to protect workers and vulnerable 
groups, and programme lending for countries impl ementing development-related DDA trade reforms. 
56. Progress in mainstreaming trade into Bank opera tions has continued and trade now figures 
more prominently in economic and sector work an d in investment operations.  The World Bank's 
trade-related operations have also been growing,  as reflected in increased investment lending for 
trade-related projects.  Lending for trade is  increasing from $0.8 billi on in FY1998-2000, to 
$1.4 billion in FY2001-2003, to $3.8 billion in FY 2004-2006 – i.e. significantly larger than the 
commitments of all ongoing operations appr oved over the preceding six-year period. 
57. As regards the adjustment costs associated with multilateral liberalization and preference 
erosion, the Bank has affirmed that it stands r eady to discuss adjustment assistance programmes on a 
case-by-case basis.  With respect to least-developed countries adversely affected by cotton subsidies, 
a series of IDA-credits currently support the reor ganization of the cotton sector in Sub-Saharan 
Africa, and the Bank has indicated to the countries a ffected that the eventual allocation of additional 
resources should be discussed in  the context of their PRSPs. 
D. B
ROAD INTERNATIONAL COHERENCE : WTO  COOPERATION WITH OTHER INTERNATIONAL  
ORGANIZATIONS  
58. Coherence in global economic policy-making goes much beyond the WTO's formal and 
specific cooperation arrangements with the IMF and the World Bank.  Indeed, it is now recognized 
that the WTO system is only one part of a much broa der set of international ri ghts and obligations that WT/TF/COH/S/11 
Page 12  
 
  bind WTO Members.  Since WTO Members are bound by all their international obligations 
simultaneously and cumulatively, it is crucial that th e interpretation and application of the provisions 
of the WTO take into account Members' other intern ational rights and obligations.  In addition, there 
are WTO provisions which explicitly provide that  measures complying with standards and norms 
developed in other specific international forum are presumed to be compatible with WTO.  Through 
its councils and committees, the WTO maintains exte nsive institutional relations with several other 
international organizations and the WTO is also participating as observer in the work of several 
international organizations.  Although the extent  of such cooperation varies, coordination and 
coherence between the work of the WTO and that of  other international organizations continue to 
evolve so as to assist Members in the operation of their economic policies.   
59. For instance, the WTO has a formal cooperati on agreement with WIPO.  During 2005, the 
WTO continued to be systematically invited as an observer to WIPO meetings and WIPO has 
attended (as observer) meeting of regular WTO bodies in which they have an interest, notably the 
TRIPS Council and the General Council.   
60. The WTO also has a cooperation agreement w ith UNCTAD for matters under their respective 
jurisdiction including their supervisory functions ove r the ITC.  In 2005, the WTO continued to work 
very closely with UNCTAD and the ITC to further th e development dimension of trade and in support 
of the DDA through, for example, the JITAP.  One notable programme of interagency cooperation on 
technical assistance and capacity building is the Integrated Framework for LDCs, which involves the 
WTO, IMF, World Bank, UNCTAD, ITC and UNDP.  In 2005, this interagency cooperation has 
expanded considerably with the setting up of the new Aid-for-Trade programme. 
61. Although there is no formal agreement between the WHO and the WTO, the WHO has 
observer status in the SPS and TBT Committees, and it has ad hoc observer status in the TRIPS and 
GATS Councils.  In 2005, there has been extensive co llaboration between the two Secretariats in the 
sectors relating to health and sanitary and phytosan itary measures, and continuing joint efforts to 
bring attention to the need for policy coherence be tween trade and health matters at both the global 
and national level.    
62. The WTO Secretariat also has maintained its  extensive coordination and undertakes joint 
activities with the international bodies which devel op standards for food safety, plant and animal 
health. Thus the FAO/WHO Joint Codex Alimenta rius Commission, International Plant Protection 
Convention and the World Organization for Anim al Health have observer status in the SPS 
Committee, and the WTO participates as an obser ver in the meetings of these bodies.    
63. The new Standards and Trade Development Fa cility, which involves the WTO, World Bank, 
FAO, World Health Organization and the World Or ganization for Animal Health, assists developing 
countries establish and implement SPS standards to ensure health protection and facilitate trade 
expansion.  In 2005 this programme became fully operational. 
64. In the area of trade and environment, th e WTO and UNEP entered into a cooperation 
arrangement for information sharing, joint research and technical assistance.  In the context of the 
Doha Round and in particular in 2005, the WTO Secr etariat has also been collaborating closely with 
the secretariats of some multilateral environmental agreements (MEAs), as well as other international 
organizations, including UNEP and UNCTAD, who have  been regularly attending WTO meetings.  
The Doha mandate of negotiations specifically a ddresses the issue of cooperation between the WTO 
and MEA secretariats as a means to achieve th e overall objective of enhancing the mutual 
supportiveness between the trade and environment regimes.  
  WT/TF/COH/S/11 
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   65. Always with a view to assisting Members' global economic policies, the WTO Secretariat 
maintains considerable contact and cooperation with  other intergovernmental organizations at staff 
level, in activities ranging from statistics, research, standard-setting, and technical assistance and training.  During 2005 the WTO Secretariat has pursued such technical exchanges with several international organizations, including with the ILO, UNCTAD, UNDP, ITC, ECOSOC, the Inter-
American Development Bank (and sometimes in collaboration with universities from developing 
countries). 
66. Although formally outside the UN system, the WTO Secretariat participates in many 
activities organized by the United Nations, its agen cies and its programmes.  In 2005 the Director-
General regularly attended meetings of th e UN Chief Executives Board, and the WTO was 
represented at senior level in the Board's subs idiary bodies (High Level Committee on Programmes 
and High Level Committee on Management) as well as coordination meetings of the Economic and 
Social Council (ECOSOC), including its special mee tings held with the Bretton Woods Institutions, 
the WTO and UNCTAD directly after the IMF and World Bank annual meetings.  The WTO is always represented at special international confer ences organized by the UN and participates in their 
activities that are related to trade and the tradi ng system, such as follow-up to the Millennium Summit 
and the Millennium Development Goals and to  the Monterrey Consensus on Financing for 
Development. 
67. Finally, in the context of the implementati on of WTO Agreements and of the Doha Work 
Programme, the WTO cooperates on an ad hoc  basis with a large number of intergovernmental 
organizations, including many regi onal bodies. Development is core to the Current Doha Round and 
there is a growing recognition that part of the cha llenge lies in better cooperation and coordination of 
all international actors involved in trade-related activities.  The Hong Kong Declaration recognizes 
this, inter alia , in one of its paragraph on LDCs where WTO urged "donors, multilateral agencies and 
international financial institutions to  coordinate their work to ensure that LDCs are not subjected to 
conditionalities on loans, grants and official devel opment assistance that are inconsistent with their 
rights and obligations under the WTO Agreements".   The Director-General also  held regular contacts 
with the Inter-American Development Bank, the African Development Bank as well as the Asian 
Development Bank.  
68. A strong multilateral trading system is one part – vitally important – of an emerging system of 
global governance, where trade, finance, deve lopment and many other policies are increasingly 
intertwined.  In 2005, the WTO has maintained its se rious efforts to ensure international coherence so 
that we can translate improvements in market ac cess or in new trade disciplines into realities for 
developing countries. 
__________