Presentation by Marc AuboinTrade and Finance and Trade Facilitation

Division

World Trade Organization Secretariat

A. IntroductionB. MandateC. Main StepsD. Implementing CoherenceE. Adjustment AssistanceF. Aid for TradeG. Broad International Coherence

1/19

WTO, IMF and World Bank: sharing similar principles

Growing interactions between structural, trade, macro and financial policies

Achieving greater policy coherence at international level = greater harmony between these policies

2/19

Distinction between coherence and cooperation

• coherence is a process– national process mainly – Intl. agencies can help

• cooperation is the set of activities and initiatives aimed at promoting coherence

3/19

Greatest contribution of the WTO: complete the DDA

IMF and World Bank support the DDA, through analytical, TACB and financial support

4/19

Coherence is also important out of negotiating periods

Daily cooperation on rules, technical assistance, surveillance and economic analysis

5/19

Achieving greater coherence in global economic policy-making: one of the 5 core functions of the WTO (Article III.5 of WTO)

The Mandate: Specific DECLARATION

Supported by Cooperation Agreements with the IMF and the World Bank in 1996 (WT/L/194 and 195)

6/19

Asian Crisis: WTO rules =shock absorber. Cooperation on surveillance, sequencing of fin. serv. liberalization and prudential rules; trade financing; ER volatility and trade

Integration of LDCs into the world economy: HIPC, PRGF, WTO Action Plan for LDCs

Since 2001, the DDA is the focus for WTO cooperation with IMF and WB 7/19

Trade and Market Access• Advocating participation in DDA• Preferences and Action Plan for LDC• Financial Support

Rules TACB Economic Research and

surveillance Other

8/19

Advocating participation• analysis of the gains – GTAP• high-profile declarations (heads of

agencies) Preferences: work by the IMF and

WB helped clarify the discussion about the loss of preferences (WT/TF/COH/14)

9/19

1996 WTO Action Plan for LDCs: market access; ease supply-side constraints; initiative for “duty and quota-free” access to LDC exports

Making significant improvements in LDC treatment, came out as an objective of the DDA

The WTO, WB and IMF participate to the management of the IF. The WB = key role in diagnostic studies. Enhanced IF adopted in December 2005

10/19

Financial support: supporting the DDA, IMF created a new window of access, the Trade Integration Mechanism. WB country-level support of trade activities (including infrastructure) change to address DDA priorities, away from adjustment lending, towards instruments supporting trade issues (TACB support, public/private sector partnership)

11/19

Exchanges to avoid inconsistent policy advice

WTO rules = shock absorbing nature during crises

Overlap between liberalization of financial services trade and capital account liberalization is recognized in the GATS

Other links in areas of exchange rate and trade, balance of payment measures and foreign exchange reserves. IMF cooperation is sought under several WTO Articles 12/19

The IMF and WB provide support to the Doha Round through their participation in WTO TA activities, or their own TA programs, in particular in fiscal and customs reforms, or training. WB provides a set of TA in areas such as trade facilitation and product standards.

13/19

14/19

Surveillance: More trade in IMF and WB publications; increased oversight of developed countries trade barriers; cooperation in the context of Article IV and TPR reports

Research• World Bank: gains of a new Round; market

access barriers to DCs; trade facilitation; agricultural reform; new issues.

• IMF: erosion of preferences, fiscal aspects of tariff reform, trade finance; exchange rate and trade flows.

Exchange of data: Fund and World Bank to provide WTO statistics and database, forecasts, and country-level measures and conditionality. The IMF and WB have online access to the WTO IDB, schedules of final commitments.

15/19

The Standards and Trade Development Facility (STDF)

Supporting WTO Accession

High-Level Contacts

16/19

New initiatives by Bank and Fund to address BoP gaps stemming from trade liberalization, erosion of preferences

Creation of the TIM by the IMF Launch by the Bank of the Doha

Development Initiative – link to increase of investment lending for trade-related projects

17/19

Market access improvement need to be accompanied by Aid for Trade (AFT) to address problems faced by many low-income countries

This means sufficient human, institutional and infrastructural capacity to participate effectively in international trade and provide a supply-side response to new market opportunities 18/19

WTO system is only one part of broader sets of international rights and obligations

Through its councils and committees, the WTO maintains extensive relations with several international organizations:• WIPO• UNCTAD• WHO• UNEP, with formal cooperation

agreements 19/19