Press Release No. 05/281

Press Release: IMF Managing Director Rodrigo de Rato Welcomes Progress on Doha Round

December 19, 2005

"We welcome the conclusion of the WTO Ministerial, which by itself constitutes a success following the disappointment at Cancún. There have been modest achievements on the substance of the Doha Round, especially agreement on an end-date for the use of export subsidies and equivalent measures in agriculture, and the structure of tariff and subsidy reduction formulae that will apply to agriculture and manufacturing trade—together with an ambitious timetable for settling the details of these formulae.

"We very much agree with WTO Director-General Pascal Lamy, that these achievements must now be built upon, by drawing on the political momentum coming out of Hong Kong to settle key disagreements during the first quarter of 2006. If this can be achieved, a successful conclusion of the Round by the end of 2006 should be feasible.

"An ambitious agreement would boost the long-term growth potential of the world economy, in developed and developing countries alike. 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.

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

"The IMF, together with the World Bank, has committed to providing assistance in order to help countries build capacity to implement trade agreements, create capacity to take advantage of the opportunities of open trade, and help them cope with adjustment costs. In Hong Kong, there were encouraging signs that bilateral donors are willing as well, to scale up aid for trade considerably in the period ahead. 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.

"The ministerial declaration calls on the WTO Director General to consult with the Fund and other institutions with a view to reporting to the WTO General Council on appropriate mechanisms to secure additional financial resources for aid for trade. We are fully committed to contributing to this process and look forward to these consultations," Mr. de Rato stated.