Vol. 5 Num 558 Wed. December 21, 2005  

IMF urges poorer nations to stick to WTO goals

IMF chief Rodrigo Rato called on developing countries not to retreat behind a wall of protectionism as he urged WTO members to wrap up a global trade deal next year.

Rato said a World Trade Organisation meeting that ended Sunday in Hong Kong had been a success relative to the "disappointment" of a failed WTO meeting in Cancun, Mexico in 2003 which pitted developing nations against rich powers.

In a statement late Monday, the International Monetary Fund chief said the Hong Kong talks had seen "modest achievements" on the WTO's Doha round, especially in an agreement to eliminate farm export subsidies by 2013.

Rato said the IMF fully endorsed WTO chief Pascal Lamy's call for the broad outlines of a trade deal to be shaped by April 2006.

"If this can be achieved, a successful conclusion of the round by the end of 2006 should be feasible," he said, adding an ambitious agreement would boost the long-term growth potential of the world economy for all nations.

"And it would help keep the protectionists at bay and lessen incentives to negotiate bilateral trade agreements, which risk jeopardizing the non-discrimination principle at the heart of the multilateral system," he said.

"Let me also stress that we welcome the unprecedented attention given to developing country concerns in Hong Kong," Rato added.

"But too often, development interests seem to be equated with the right to exclude oneself from global markets.

"This does not accord with experience, which suggests that active trade integration offers the best hopes for spurring economic growth.

"Negotiators should consider the lessons from successful development in defining their positions in the coming months."

Rato also welcomed a commitment at Hong Kong by developed nations to boost assistance for poorer countries so that they can fully benefit from freer trade.

But he added: "While an important complement to an eventual WTO agreement, this aid for trade is neither a substitute for an ambitious round, nor should it be made subject to the negotiations themselves."