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Seattle conference: IMF, World Bank, WTO leaders stress importance of increased trade for reducing poverty

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
January 1999
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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 are now under way. In these circumstances, it is important that restrictive trade measures continue to be resisted firmly and that further steps are taken to open markets and enhance competition to strengthen the contribution of trade to poverty alleviation and development.

Poverty afflicts an intolerably large proportion of the world’s population. The evolution toward 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.

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 farsighted 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.

As national economies become more interdependent, fostering poverty reduction through sustained, broadly shared, high-quality growth depends to an important extent on intergovernmental 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 policymaking. 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.

Camdessus emphasizes poverty reduction

In his remarks to the WTO conference, Camdessus said that the world needs an ambitious, far-reaching global trade round for three compelling reasons: to sustain the recovery of world economic activity, to support the continuing reform of the international monetary and financial system, and to deliver a major impetus in the global offensive on poverty.

“If I were to stress one point alone,” Camdessus said, “this would be it—trade, through its contribution to sustained high-quality growth, is vital for the lasting reduction of poverty.” That is why he said he was urging that particular attention be drawn to the developing countries and their integration into the global trading system.

He advocated providing unrestricted market access for all exports from the poorest countries, including the heavily indebted poor countries, and urged that this should be given priority and be brought to an early resolution, so that the poorest countries can begin to benefit without delay. They account for such a small proportion of world trade—less than ½ of 1 percent—that such access would not be costly or unduly disruptive, he said.

Concluding, Camdessus reiterated that “it is only through a truly cooperative approach—one that ensures that trade, development, macroeconomic, and financial policies are mutually supportive—that we will be able to make lasting progress on the most pressing issue facing humanity at the end of the twentieth century—reducing poverty.”

The full texts of News Brief 99/78 and Camdessus’s address to the conference are available on the IMF’s website (http://www.imf.org).

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