WTO, World Bank, and IMF chiefs warn against rich-country protectionism
The heads of the WTO, World Bank and International Monetary Fund on 16 May 2002 urged OECD ministers to give impetus to the Doha agenda negotiations, and warned that increased protectionism in the world’s leading economies would undermine developing countries’ efforts to reform through more open economies. They made the call in a joint note to the 15-16 May meeting of the OECD Ministerial Council in Paris.
Joint note on the Doha Development Agenda
The Doha and Monterrey declarations have been landmarks in the fight against poverty. A central message is that aid and trade must go hand in hand if the opportunities of globalization are to spread to the most needy — the one billion and more of humankind living in absolute poverty. Ensuring that poor people have every possible chance to participate in trade, and directing our assistance to enable them to do so, is not only morally right it also makes economic sense.
We are pleased therefore that this week's gathering of OECD Ministers will give special attention to trade and development. We hope that Ministers will give impetus to the necessary actions to meet the development objectives of the Doha agenda on time, within the next 30 months. And we encourage them to set out clearly how progress towards these objectives will be monitored. Prospects for reform of agricultural support policies and textiles regimes, toward interventions that are less damaging to the economic opportunities of the poor, are particularly important.
Any increase in protectionism by any country is damaging. Such actions will hurt growth prospects where fostering growth is most essential. And they are sending the wrong signal, threatening to undermine the ability of governments everywhere to build support for market-oriented reforms. How can leaders in developing countries or in any capital argue for more open economies if leadership in this area is not forthcoming from wealthy nations.
Progress within the WTO framework of reciprocal liberalization is the best guarantee for spreading the benefits of trade and anchoring them within multilateral rules. But developing countries need not wait. South-south trade in the 1990s grew faster than world trade and now accounts for more than a third of developing country exports. Yet the barriers to this trade are higher still than to trade with industrial countries. Most of the benefits of liberalization derive from action at home. Sound trade policies are rarely contingent on the policies of others.
We should be aware that Doha marked the first time that the wealthy countries committed to assist the developing world in building capacity to better engage in the global trading system. It is important that they follow through on this commitment.
We remain confident that the commitments of Doha and Monterrey will carry us towards a world trading system that empowers the poor. But we must move beyond rhetoric, firmly resist protectionism, whatever its form or justification, and promote policies that foster economic growth and prosperity.
International Monetary Fund
World Trade Organization
James D. Wolfensohn
World Bank Group