News Brief No. 99/78

News Brief: Joint Statement by the Heads of the IMF, the World Bank, and the WTO

November 30, 1999

Michel Camdessus, Managing Director of the International Monetary Fund (IMF), James D. Wolfensohn, President of the World Bank, and Mike Moore, Director-General of the World Trade Organization (WTO), issued this joint statement to the Third WTO Ministerial Conference in Seattle, Washington.

During the past two years, which have been difficult for many of our member countries, the multilateral trading system has been an anchor of strength and stability in the world economy. Its rules are an essential element of the framework for international economic policy cooperation. The damaging economic and social effects of financial crisis have been felt widely, yet the consequences would have been far worse if the crisis had provoked a protectionist trade response. A broad-based recovery in world economic activity and a return to macroeconomic stability is now underway. In these circumstances, it is important that resort to restrictive trade measures continues to be resisted firmly, and that further steps are taken to open markets and enhance competition in order to strengthen the contribution of trade to poverty alleviation and development.

Poverty afflicts an intolerably large proportion of the world's population. The evolution towards a more open, integrated and competitive global economy offers great potential for fostering growth and the economic and social development needed to eradicate poverty. But the human and social benefits of economic globalization do not accrue automatically, and globalization presents particular challenges for the poorest countries. Supporting their efforts to integrate more fully into the world economy is an urgent task for the international community, and one to which our three organizations are strongly committed.

All WTO Members will benefit from increased participation of developing countries in trade. We shall build on the strong collaboration between our three organizations to enhance the capacity of developing countries to use the new trade negotiations, and their membership in the WTO, to foster their economic and social development. Trade, and trade policy reform, must be made more effective tools for poverty reduction, particularly in the poorest countries, and we intend to increase our support for countries to use the opportunities offered by the global economy as key elements of their strategies for poverty reduction and development. The World Bank's Comprehensive Development Framework, and Bank and IMF efforts to develop Poverty Reduction Strategies together with countries and other development partners, can be used to link the economic, social and environmental implications of trade to the design and implementation of comprehensive and coherent policy, institutional and investment responses.

Trade liberalization and trade policy reform, despite their long-run benefits, require economic adjustment with its consequences for employment and other economic and social outcomes. We stand ready to assist countries to tackle the adjustment process, and to build-in the necessary social and economic policy responses, through policy analysis, developing safety nets, financial support, and technical assistance. Development partners of countries engaged in the process of adjusting to trade reforms should also contribute to this effort, most importantly by ensuring an adequate flow of financial resources to developing countries to allow their economic and social development programs to be tackled comprehensively

New WTO negotiations offer an excellent opportunity for governments collectively to renew their commitment to a comprehensive liberalization of international trade. We call on WTO Members to be ambitious and far-sighted in setting their negotiating objectives. The negotiations have the potential to yield results that improve the functioning of the world economy and create greater opportunities for developing countries. In particular, there are large potential gains to be had from further multilateral liberalization of trade in those goods and services that are of particular export interest to developing countries. Efforts to secure greater market access for all products of developing countries has been welcomed warmly by finance and development Ministers at the Annual IMF/World Bank Meetings.

Trade liberalization has proceeded, both through implementation of the Uruguay Round results and subsequent WTO agreements on telecommunications and financial services and on information technology products, as well as through autonomous trade reform efforts. These efforts are providing a valuable source of productivity growth in the world economy. We encourage governments to continue to undertake trade liberalization and the related policy reforms needed to correct structural weaknesses and market distortions in their economies. We believe that the value of autonomous trade liberalization initiatives should be recognized in the WTO negotiating process. These initiatives contribute to the expansion of world trade, and convey real benefits not only to the countries taking them but also to their trading partners. This should be clearly acknowledged in the forthcoming WTO negotiations, by crediting countries which bind their autonomous trade liberalization under WTO rules.

As national economies become more inter-dependent, fostering poverty reduction through sustained, broadly shared, high quality growth depends to an important extent on inter-governmental cooperation to ensure that trade, finance, macroeconomic and development policies are mutually supporting. The IMF, the World Bank and the WTO have special responsibilities to assist our member governments in this regard, and we will continue to work together closely, under our Cooperation Agreements, to help them increase the coherence of economic policy-making. Support for developing countries, and particularly for the poorest among them, in the new WTO negotiations will be a priority focus of our cooperation. We welcome guidance from our member Governments on other areas that they would wish to see us address.