COC

WTO General Council Meeting on Coherence: Highlights (October 2004)

Rethinking Bretton Woods | Thu, Nov 4, 2004

By Aldo Caliari

The WTO General Council meeting on coherence took place on October 22, 2004, In attendance, among others present, were the leaders of the World Bank, IMF and, of course, World Trade Organization itself.1

The WTO General Council meeting on coherence took place on October 22, 2004, In attendance, among others present, were the leaders of the World Bank, IMF and, of course, World Trade Organization itself.1

Below are links to statements delivered at the meeting:

A quick reading of the statements shows the following themes the institutions seem to be jointly prioritizing in terms of their work on coherence:

IMF-World Bank Observer Status in Trade Negotiations Committee.

A concerted push by the heads of the three institutions was made in support of giving the World Bank and the IMF observer status in the WTO Trade Negotiations Committee. The WTO Director General went as far as saying that such observer status was ""a logical step â€" and would certainly be no more than what is required under the terms of the Cooperation Agreements with the WTO."" Mr. Wolfensohn, head of the World Bank, asked that the request be addressed shortly while Mr. De Rato, head of the IMF, argued that it would ""provide the [IMF] staff with a more immediate sense of the needs and demands of the WTO membership.""

IFIs cooperation in support of technical assistance and capacity building for the Trade Facilitation negotiations.

Mentioned as an area of importance by the three organizations' heads, the Bank's President added that in FY04 the Board had approved 16 new projects with trade facilitation components for a combined amount of  $ 560 million, which was more than double the number of projects and commitments for the previous year.

Cotton.

Also mentioned by the three organizations' heads as an issue on which cooperation is called for by the Doha Framework. The IMF Managing Director made it explicit that assistance would be delivered through existing instruments (such as the PRGF) while the Bank's response seems to be encouraging African countries to address this issue in their PRSP programs.

Trade Integration Mechanism of the IMF.

The WTO Director General announced that it is the task of the WTO Secretariat to continue working with the IMF to help WTO members identify the opportunities presented by it. The Bank also announced it stands ready to provide adjustment assistance for preference erosion and other costs of multilateral liberalization.

Working Group on Debt, Trade and Finance.

The ongoing work on the Working Group on Debt, Trade and Finance was also mentioned by the WTO and IMF chiefs. The IMF said a study it had contributed (posted at
http://www.imf.org/external/np/res/exrate/2004/eng/051904.pdf) shows that, from the perspective of enhancing trade, ""exchange rate volatility may not be a major concern."" In fact, the study concluded that there is no strong and robust evidence that exchange rate volatility has a negative effect on trade flows.

Special and Differential Treatment.

In light of the words of the Bank's chief, a series of very questionable research findings are crystallizing into a Bank policy on this area. S&DT, he said, ""should not be confused with an invitation to free-ride the multilateral trade system. After all one of the main benefits of engaging in multilateral trade negotiations is the opportunity of using the process to leverage domestic reform processes.""

Technical assistance.

The World Bank's President emphasized that Integrated Framework activities have been launched in more than 20 countries, with integration of trade-related actions into Poverty Reduction Strategies as ""the best route to promote greater coherence in this area."" Technical assistance for tariff policy and customs administration featured in a statement by the head of IMF, which said that Fund experts have fielded more than 25-30 missions per year in the last two years.