Relations with Other International Organizations
Arrangement for Consultation and Cooperation with the Contracting Parties of Gatt
The Fund agrees that the informal arrangement of an administrative character proposed by the Chairman of the Contracting Parties constitutes a satisfactory basis for consultation and cooperation between the Fund and the Contracting Parties to the General Agreement on Tariffs and Trade (Executive Board Document No. 316, Supplement 2). the Managing Director is authorized to agree to that arrangement on behalf of the Fund and the text of the proposed reply to the Contracting Parties is agreed (Committee on Liaison with ITO Document No. 11).
Decision No. 363-1
September 24, 1948
Document No. 316
to the General Agreement
on Tariffs and Trade
Palais des Nations
9 September 1948
The Managing Director,
International Monetary Fund,
1818 “H” Street,
Washington 6, D.C.
The General Agreement on Tariffs and Trade, which has now been put into provisional application by all but one of the countries participating in the negotiation thereof, provides in paragraph 1 of Article XV as follows:
“The CONTRACTING PARTIES shall seek co-operation with the International Monetary Fund to the end that the CONTRACTING PARTIES and the Fund may pursue a coordinated policy with regard to exchange questions within the jurisdiction of the Fund and questions of quantitative restrictions and other trade measures within the jurisdiction of the CONTRACTING PARTIES.”
Throughout the Agreement various provisions call for consultation or agreement between the CONTRACTING PARTIES, that is, the contracting parties to the General Agreement acting jointly, and the International Monetary Fund on matters of common concern, in particular, paragraph 2 of Article XV calls for a wide range of consultation, and paragraph 3 of Article XV provides:
“The CONTRACTING PARTIES shall seek agreement with the Fund regarding procedures for consultation under paragraph 2 of this Article.”
In view of the fact that the General Agreement on Tariffs and Trade has been given only provisional rather than definitive application, it is the view of the CONTRACTING PARTIES that an elaborate agreement to implement paragraph 3 quoted above is not necessary at this time. However, questions may arise in the interim which would require the CONTRACTING PARTIES to seek the cooperation of the Fund.
Under such circumstances it is proposed by the CONTRACTING PARTIES that the Fund agree to co-operate with the CONTRACTING PARTIES in carrying out the provisions of the General Agreement in accordance with the terms thereof and, in particular, to consult, at the request of the CONTRACTING PARTIES, on matters as contemplated by the General Agreement. If such cases arise, the Chairman of the CONTRACTING PARTIES will notify the Managing Director of the Fund of each particular instance in which the CONTRACTING PARTIES desire consultation and will furnish the Fund with all information available which may assist the Fund in considering the question. Since various provisions of the General Agreement call for consultation between the CONTRACTING PARTIES and the Fund, it might be necessary in particular cases to await a meeting of the contracting parties before formal consultation could be undertaken. However, the CONTRACTING PARTIES have authorized their Chairman to initiate requests, either at the direction of the CONTRACTING PARTIES or on the Chairman’s own initiative if the contracting parties are not in session, for the Fund to consult with the CONTRACTING PARTIES in accordance with the provisions of the General Agreement. This arrangement should make it possible for the Fund to undertake with a minimum of delay such studies as may be necessary and should afford the Fund opportunity to become familiar with the subject matter involved in advance of consultation with the CONTRACTING PARTIES in particular cases.
The Fund may from time to time wish to request consultation with the CONTRACTING PARTIES on matters of common interest, and, in such cases, the CONTRACTING PARTIES will be prepared to consult upon such requests.
Any request for consultation by either the Fund or the CONTRACTING PARTIES shall be accompanied by available information which would contribute to the effectiveness of the consultation, in such cases, due regard shall be paid to the need to safeguard confidential information and to any special obligations of the Fund and the CONTRACTING PARTIES in this respect.
The particular procedures in implementation of these arrangements can be worked out case by case until sufficient experience has been acquired on the basis of which more formal procedures can be developed if necessary.
If the foregoing arrangements are acceptable to the Fund, a reply to that effect would be appreciated.
Chairman of the Contracting Parties to the
General Agreement on Tariffs and Trade
Committee on Liaison with ITO
Document No. 11
I beg to acknowledge receipt of your letter of September 9, 1948, concerning the future cooperation between the International Monetary Fund and the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade in carrying out the provisions of the General Agreement.
The Fund agrees with you that an elaborate agreement on cooperation is not necessary at this time and that this informal arrangement of an administrative character constitutes a satisfactory basis for consultation and cooperation between the International Monetary Fund and the CONTRACTING PARTIES.
I take pleasure in agreeing on behalf of the International Monetary Fund to the provisions of your letter of September 9, 1948.
Chairman of the Contracting Parties
to the General Agreement on Tariffs and Trade
European Office of the United Nations
Palais des Nations
Fund/Bank Collaboration: Invitation to the Bank to Send a Staff Member as an Observer
2. The Executive Board authorizes the issuance of a general invitation to the International Bank for Reconstruction and Development to send a staff member as an observer to attend Fund Board discussions on staff reports on missions relating to Article VIII and Article XIV consultations and use of Fund resources in areas of common interest.
The Chairman’s Summing Up at the Conclusion of the Discussion on Fund-Bank Collaboration and the Adjustment Process—Issues for Consideration Executive Board Meeting 84/171, November 28, 1984
The proposal for attendance at Board discussions in each institution of appropriate staff member(s) from the other seemed basically to be aimed at obtaining a fuller understanding of the involvement of the other institution in countries to which both the Bank and the Fund were providing financial assistance. As far as Bank staff attendance at Fund Board meetings is concerned, I understand that Directors are prepared to reaffirm the invitation extended in 1970, for ad hoc, selective attendance at discussions of countries in which both the Fund and the Bank have programs of financial assistance. A number of Directors expressed the expectation of reciprocity on the part of the Bank with regard to staff attendance at Board meetings of the other institution. That applies also to the exchange of notes suggested in the staff paper as a way to facilitate the expression of specific concerns and questions by Executive Directors. Active participation in Fund Board meetings by Bank staff, as opposed to attendance as observers, has not received the necessary support in the Executive Board.
European Central Bank: Observer Status
1. The European Central Bank (ECB) shall be invited to send a representative to meetings of the Executive Board on:
Fund surveillance under Article IV over the common monetary and exchange rate policies of the euro-area;
Fund surveillance under Article IV over the policies of individual euro-area members;
Role of the euro in the international monetary system;
World economic outlook;
International capital markets reports; and
World economic and market developments.
2. In addition, the ECB shall be invited to send a representative to meetings of the Executive Board on agenda items recognized by the ECB and the Fund to be of mutual interest for the performance of their respective mandates.
3. At Executive Board meetings, the representative of the ECB will have the status of observer and, as such, will be able to address the Board with the permission of the Chairman on matters within the responsibility of the ECB.
4. The Fund shall communicate to the ECB (i) the agenda for all Board meetings and (ii) the documents for the Executive Board meetings to which the ECB has been invited.
5. The decision shall become effective upon receipt by the Fund of a certification by the ECB that it will preserve the confidentiality of all information and documents communicated by the Fund to the ECB, as specified by the Fund, and that any such information and documents shall be solely for the internal use of the ECB.
6. This decision shall be reviewed before January 1, 2000.
Decision No. 11875-(99/1)
December 21, 1998
European Central Bank: Observer Status—Review
The Executive Board has reviewed Decision No. 11875-(99/l), adopted December 21, 1998. the decision shall be reviewed again before January 1, 2002.
Decision No. 12402-(01/1)
December 27, 2000
Guidelines/Framework for Fund Staff Collaboration with the New World Trade Organization
The Executive Board decides that the draft guidelines/framework for Fund staff collaboration with the World Trade Organization (WTO), set forth in EB/CGATT/95/1, Supplement 1 (4/18/95), may be used by the staff to discuss cooperation with the WTO staff, with the goal of reaching agreement on collaboration between the institutions.
Decision No. 10968-(95/43)
April 21, 1995
EB/CGATT/95/1 Supplement 1
Guidelines/Framework for Fund Staff Collaboration with the World Trade Organization
This note is intended to provide Fund staff with guidelines for cooperation with the World Trade Organization (WTO), established on January 1, 1995. It builds upon the close, formal and informal collaboration that existed between the Fund and the GATT. These guidelines will be periodically reviewed and extended or modified as necessary, in the light of the evolution of the collaborative relationship between the Fund and the WTO.
The ministerial Declaration included in the Final Act concluding the Uruguay Round called upon the Director-General of the WTO to consult with the heads of the Fund and the World Bank on enhanced inter-institutional cooperation, especially with a view to achieving greater coherence in global economic policymaking. Cooperation between the Fund and the WTO is expected to cover the following areas:
balance of payments consultations
coherence in global economic policymaking
consistency of policy advice and obligations
resolution of open jurisdictional issues
research and information exchange
Balance of payments consultations
An important aspect of Fund/WTO collaboration is through the Fund’s participation in the consultations of the WTO Committee on Balance of Payments Restrictions with common members. A WTO member applying restrictions on trade in goods and/or services to safeguard its balance of payments must consult with the WTO Committee, in carrying out these consultations, the WTO Committee is required to consult with the Fund regarding the member’s macroeconomic situation, particularly its balance of payments position and level of international reserves in reaching its decision as to whether the trade restrictions are justified on balance of payments grounds, the WTO Committee must accept the Fund’s findings of statistical and other facts relating to foreign exchange, monetary reserves, and balance of payments, and its determination as to the seriousness of the member’s international reserve situation. Thus the Fund should stand ready to provide the WTO Committee timely information and assessment of the consulting member’s balance of payments situation. Towards this end, the Fund and WTO will consult on the appropriate timing of the consultation, the Fund will provide the WTO Committee on a timely basis the latest RED report of the consulting member. When a recent RED is not available or where there have been significant changes in the country’s external position since the last RED, the Fund will provide updated information on recent economic developments; transmittal of such supplementary information is submitted for Board approval on a lapse of time basis. in the case of a full consultation by the WTO Committee (when detailed discussion of the external financial justification for the restrictions is required), the Fund representative will also provide a statement that has been cleared by the Fund’s Executive Board.
Coherence in global economic policymaking
The WTO’s charter calls for cooperation with the Fund and the Bank with a view to achieving greater coherence in global economic policymaking. the Fund, given its responsibilities in the macroeconomic policy area, including with respect to exchange rates, can contribute to assessing issues of coherence between macroeconomic and trade policies. the Fund can also contribute to greater policy coherence by taking into account in its work the concerns of the WTO in the trade area. in the period ahead, Fund and WTO staffs will work closely to define better the elements and mechanisms for achieving coherence in economic policymaking, including formal and informal channels for communication between the Fund and the WTO.
Consistency of policy advice and obligations
In the conduct of their surveillance functions, the Fund and the WTO should ensure policy consistency and avoid duplication. in its surveillance, the Fund examines a member country’s trade policy, along with its other economic and financial policies, with respect to their impact on the member’s own adjustment and on other Fund members. the WTO exercises surveillance over specific aspects of trade policies (such as the implementation of the Multifiber Arrangement) and over individual countries’ overall trade policy (through the trade policy review mechanism (TPRM)) with a view to enhancing the transparency of the trade regime. in surveillance, Fund staff should place greater emphasis on specific macroeconomic/trade linkages. the staff should also take into account the WTO’s views of the trade stance of particular member countries, as enunciated, for example, in the WTO’s conclusions of the Trade Policy Reviews (TPRs) with individual countries; when TPR reports are out of date or not available, the staff could seek the relevant information from the WTO Secretariat including in some cases through informal staff visits. the WTO Secretariat’s reports for the TPR contain as background information the macroeconomic environment of the consulting member. To assist the WTO’s surveillance, Fund staff should stand ready to provide information on the macroeconomic policies of common members in the preparation of TPR reports. This would be particularly so in cases where a recent Article IV consultation report is not available.
Fund staff need also to ensure that, in the context of surveillance and use of Fund resources (UFR), and bearing in mind the aim of achieving medium-term external viability, recommended policy measures and program conditionality are consistent with the member’s agreements under the auspices of the WTO. This has assumed particular importance in the light of the more extensive commitments undertaken by members under the Uruguay Round. To promote structural reform, Fund policy advice often encompasses features that require reforms that are consistent with (though they may go beyond) a member’s undertakings in the WTO. for example, tariffs may be reduced under a Fund-supported program to below levels “bound” in the relevant WTO agreements; this would promote economic efficiency without conflict with obligations under these agreements. However, if tariffs were to be raised above bound levels, this would breach the member’s obligations in the agreements under the auspices of the WTO. To avoid such situations, Fund staff should seek information from the member and from the WTO on the nature and level of its tariff obligations under WTO-administered agreements, and take this information into account in policy formulation. Internal staff review procedures should assist in identifying potentially inconsistent policy measures. Where there is ambiguity or doubt about the WTO-consistency of specific measures, Fund staff should consult with WTO staff on member countries’ WTO obligations and would expect WTO staff to provide the necessary input promptly so as to allow timely implementation of Fund-supported adjustment programs. the authorities should also be urged to consult with the WTO to clarify potential conflicts before the measures are implemented.
Fund-supported programs should continue to avoid cross conditionality. That is, Fund-supported programs should continue to avoid directly linking the use of Fund resources to the performance of obligations under the WTO-administered agreements. Fund-supported programs may include reductions in subsidies or trade barriers that are consistent with or go beyond the commitments undertaken under the Uruguay Round when the Fund finds that such measures are necessary to achieve the objectives of the Fund-supported program, but not to enforce commitments to agreements under the auspices of the WTO. Thus, for example, under the Uruguay Round, countries are required in principle to reduce their agricultural export subsidies over a six year period by certain percentages from those prevailing during a specified base period. Fund-supported programs may also call for a reduction in such subsidies, which could be more rapid and comprehensive than under the Uruguay Round, if this is necessary to achieve the program’s fiscal and resource allocation objectives. Moreover, provisions in a Fund arrangement constitute conditions for the member’s use of Fund resources and do not alter obligations vis-à-vis other WTO members. for example, if program design calls for a reduction in applied tariffs to below WTO “bound” levels, this does not constitute a requirement by the Fund for the member to “bind” its WTO-administered commitments at the lower applied level. Fund staff will continue to consult and coordinate with Bank staff in the design of trade reforms included in Fund-supported adjustment programs.
Resolution of open jurisdictional issues
The Final Act of the Uruguay Round includes a Declaration on the Relationship of the World Trade Organization with the International Monetary Fund, which confirms the continued application of Article XV of GATT 1947 (now GATT 1994) on collaboration with the Fund in the area of trade in goods. Article XV requires the WTO to seek cooperation with the Fund in order for the WTO and the Fund to pursue a coordinated policy with regard to exchange questions within the jurisdiction of the Fund and questions of quantitative restrictions and other trade measures within the jurisdiction of the WTO. These provisions also recognize the right of a WTO member that is a Fund member to maintain exchange controls or restrictions in accordance with the Fund’s Articles. Similarly, in the area of services, Article XI of the General Agreement on Trade in Services (GATS) safeguards the rights and obligations of Fund members under the Fund’s Articles with respect to restrictions on current international transactions. Thus, it is expected that the WTO will not authorize countermeasures against exchange measures that are consistent with the Fund’s Articles, or find measures consistent with the Fund’s Articles to violate one of the Multilateral Agreements on Trade in Goods or the GATS, or subject exchange measures to remedies in the absence of violation for “nonviolation nullification or impairment.” The Fund and the WTO will work on clarifying jurisdictional issues in order that the rights and obligations of Fund members are protected.
Effective cooperation and interaction among the two staffs will be crucial in ensuring that policy inconsistencies and duplication are avoided, and there is full mutual awareness of the interests and concerns of each institution. the Fund’s Geneva Office will continue to provide liaison between the Fund and the WTO on an ongoing basis, supplemented by contacts at headquarters. This will include periodic meetings (at least annually) between appropriately senior staff of the Fund and the WTO to identify issues of common concern and the means of dealing with them, including specifically the manner of enhancing collaboration. Bank staff will be invited to some of these meetings for trilateral discussions on issues of mutual interest. Meetings at head of institution level would be arranged as needed. in cases involving important trade policy issues, there should be more active use of informal Fund staff visits to exchange views with WTO staff, for example en route to Article IV and/or UFR consultations. Similarly, WTO staff should be encouraged to visit Fund headquarters periodically to informally discuss specific country cases (including in the context of preparing TPR reports) or policy issues. Staff secondments could also be given consideration.
Observer status in the WTO and the Fund is under discussion.
It is envisaged that representation in the Fund could be on several levels. the Director-General of the WTO (or his representative) could be regularly invited as an observer to the meetings of the Interim and Development Committees and to the joint Annual Meetings by the Chairman of the relevant Committee. the WTO Director General (or his representative) would also be invited as an observer in selected meetings covering general trade policy issues of the Fund’s Executive Board, and there would also be some contact with the Committee on Liaison with the WTO (CWTO). in parallel with arrangements for Bank staff observers, the WTO staff representative could be invited to intervene in Fund Board/CWTO meetings by an Executive Director or the Chairman, the WTO Secretariat would be expected to treat the deliberations of the Fund Board/CWTO as strictly confidential information not available to other organizations or to the public. Similarly, Fund staff would be expected to treat the deliberations of the WTO with strict confidentiality.
As mentioned earlier, the Fund will transmit to the WTO Committee on Balance of Payments Restrictions the latest RED report or similar document on the consulting member (in addition to a Fund statement where relevant). the Director-General of the WTO will be regularly provided, for the confidential use of the Secretariat, Article IV Consultation reports (staff reports and REDs) on common members. for these members, consideration might be given in the future to transmitting the Chairman’s Summing-Up of the Board discussion to the WTO Director-General, as long as the concerned Executive Director raises no objection. for Fund members that are seeking accession to the WTO, consideration might also be given to transmitting to the WTO Director-General Article IV Consultation reports, provided that the concerned Executive Director raises no objection. Fund staff will also ensure that an up-to-date assessment of a country’s macroeconomic situation is available to WTO staff at the time of preparation of the latter’s TPR reports or as needed; where there is considerable interval between the Article IV discussion and the TPR, Fund staff should be able to provide WTO staff updated factual information on the macroeconomic situation. As in arrangements with the GATT, Fund staff expect to continue to receive on a confidential basis most WTO documents (i.e., minutes and reports of councils and other bodies, the reports of member countries to these bodies, and TPR reports).
Research and information exchange
Fund staff will seek the WTO Secretariat’s views on selected reports in which international trade policy issues are prominently featured. Fund staff expect to be able to comment on selected WTO staff reports in which macroeconomic issues are discussed. Joint studies on topics of mutual interest could be considered from time to time. Fund and WTO staff could participate in seminars at respective institutions involving topics of mutual interest. To improve awareness and reduce duplication, Fund and WTO staffs could make greater use of each other’s basic data, taking into account confidentiality requirements of the respective organizations. This could also help reduce the burden on officials in member countries caused by duplication of requests for basic information. With a view to better investigating the economic and financial implications of the Uruguay Round on individual countries,1 Fund staff have requested access to the WTO’s Integrated Database; this should not involve setting up new communications links as Fund staff would be able to obtain relevant data from the World Bank which has already been granted access to the Integrated Database.
Exchange of Documents with Other International Agencies
Staff reports pertaining to: (i) surveillance under Article IV, Section 3(a) and (b), and (ii) the use of Fund resources by members; and (iii) technical assistance reports may be transmitted by the Managing Director to international agencies having specialized responsibilities within the Fund’s field of interest, subject to the reciprocal transmittal of comparable documents of the recipients to the Fund, and on the understanding with the recipients of the reports that the reports will be kept confidential. Such transmittals and exchanges of documents shall be carried out in accordance with the criteria set forth in SM/90/120 (6/20/90) and Correction 1 (7/17/90), and in SM/93/24 (1/28/93), and in the light of the discussion and summing up of EBM/90/105 and EBM/90/106 (7/2/90).
In addition, documents referred to in paragraph 11 of the Agreement between the Fund and the World Trade Organization may be transmitted to the World Trade Organization Secretariat on the sixth working day after their circulation to Executive Directors, provided that there is no objection by the member concerned.
Decision No. A-9786-(93/20)
February 11, 1993,
as amended by Decision No. A-10615-(96/105), November 25, 1996
(a) Criteria for access
The following three basic criteria would seem relevant in considering the appropriateness of access to Fund documents:
(i) Commonality of operational interest and need: documents would in principle be available to official international organizations that share with the Fund a current operational and financial interest in the particular member country concerned. Thus, organizations that are or will be providing substantial financial assistance to Fund members, primarily balance of payments support whose effectiveness is dependent on the macroeconomic environment, would a priori meet this criterion. Organizations would also have to be deemed to have an operational need for the information in Fund documents.
(ii) Reciprocity: recipient organizations would need to be prepared to make arrangements as appropriate to ensure reciprocity of comparable country papers. the staff will need to explore the scope and nature of these papers in the case of each organization.
(iii) Confidentiality: recipient organizations would need to assure the Fund that the documents provided will not be used for any purpose other than that specified in the organization’s request and would be kept confidential. A senior official of the organization would submit a request to the Secretary of the Fund for the regular transmittal of documents, and provide assurance that the material in the documents was for the internal and exclusive use by staff only and that it would not be quoted from, either in whole or in part, or used in publication.
The agencies which meet these criteria at this time, and which could be expected to request regular transmittal of country documents, would include the AfDB, AsDB, Arab Monetary Fund, CDB, IsDB, IDB, EC Commission (see also Section V), EIB, and the UNDP on countries that are receiving technical assistance under the executing agency arrangement with the Fund. However, this indicative list can be expected to evolve over time with the agencies’ scope of financial operations, and in terms of the countries of concern for each agency, for example, it might also be appropriate to include in this list at some point in the future the newly founded European Bank for Reconstruction and Development. Thus, the staff would keep agency and country indicative lists under periodic review in light of the basic criteria listed above.
Given the clear need for a more timely release of country documents, certain modifications in the procedures set out in SM/92/90 may be helpful. These do not alter the guidelines and principles of the Board’s decision of July 1990. the request for clearance of the document’s transmittal could be made, on a “no objection” basis, in the Secretary’s cover note to the document when it is first circulated to Executive Directors (see sample in Attachment III), with a considerable saving of paperwork and time, in this way, the document could be prepared for transmittal shortly after its circulation, and dispatched at a time indicated on the cover note. This time could be, according to the circumstances and on the basis of requirements to be indicated by the area department, either immediately following consideration by the Board or, in what are expected to be exceptional cases, at a specific date before the Board discussion the need to consider release prior to Board discussion could arise when the early availability of a document is seen to be required, for instance, in order to make available background information when preparations are being made for the provision by donors or other agencies of financial or technical assistance to members, or to facilitate Paris Club rescheduling discussions.1
The modified procedures for clearing the release of country documents will apply only to the transmittal of staff reports and REDs sent to various agencies on a regular basis. Ad hoc requests for country documents will continue to be cleared in the same way as in the past, with the area and issuing department, and with the concurrence of the Executive Director concerned.
Summing Up By the Chairman Policy Orientation and Balance of Payments Assistance of Bilateral and Multilateral Aid Agencies Executive Board Meeting 90/106, July 2, 1990
To facilitate a greater exchange of information on country operations with multilateral agencies that are providing financial support for economic reforms, Directors agreed that the current procedures for release of Fund country documents should be modified to allow access to a wider range of such documents and for a larger group of recipient organizations, provided the confidentiality of the documents would be properly safeguarded. the changes in procedures would comprise staff reports for Article IV consultations, as well as staff papers on requests for and reviews of the use of Fund resources, and papers on recent economic developments. in all cases of documents involving the use of Fund resources, letters of intent and/or policy memoranda, as well as relevant decisions and texts of arrangements, would be deleted; and in certain exceptional cases, perhaps a summary of especially sensitive information would be provided. Directors endorsed the proposal for such a modification on the basis of the criteria set out in the staff paper (SM/90/120).1
Such investigations would also help assessment of possible adverse effects of the Round on particular developing countries as recognized by the WTO ministerial decision.
See, for example, requests to provide economic reviews on states of the former Soviet Union to the EC, the EBRD, the EIB, the OECD, and the BIS (EBD/92/44,3/6/92), and staff reports on the use of Fund resources by Estonia, Latvia, and Lithuania to the EC (EBD/92/185, 8/28/92, and EBD/92/237, 10/2/92).
Not included in this volume.