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October 3, 1998

Joint Statement by the Heads of the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO)  

The present difficult period for the world economy places a premium on cooperation and collaboration between the international organizations involved in the global economy.

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The need for this cooperation was explicitly recognized at the completion of the Uruguay Round, when Ministers invited us to consider means to improve further our cooperation and efforts towards greater coherence in global economic policymaking. The IMF, World Bank, and WTO, as partners in this endeavor, have since worked steadily in this direction. As the heads of these institutions, we have personally seen the advantages of increased cooperation, and have today discussed ways to strengthen further our ongoing efforts in the direction of collaboration and coherence in our areas of common and complementary objectives. We have agreed to have a meeting of our High Level Working Group to continue these discussions.

Recent developments in the global economy have further raised the importance of our collaboration. In our discussions today we have re-emphasized that pursuit of policies facilitating a return to more orderly financial markets and exchange rate stability are the immediate requirements for recovery. These policies, combined with sound macroeconomic fundamentals, appropriate social safety nets, nondiscriminatory trade liberalization, structural and financial sector reform, and the orderly integration of financial markets along with the safeguards and prudence such integration requires, are critical to promoting the common objectives of high-quality economic growth, poverty alleviation, and broad-based economic development on a sustainable basis.

Trade liberalization has yielded enormous benefits to the world in the last fifty years; we must be on constant guard to counter any tendency to slip back into protectionism, which would be a tragic mistake and a self-defeating strategy in an interdependent world. History teaches this lesson all too clearly. Indeed, resorting to protectionism would make the present problems much worse by inhibiting trade flows and the benefits they bring. Markets must remain open, and here all countries have a role to play. Pressing on with the agenda for the liberalization of trade in goods and services, including appropriate implementation of the Financial Services Agreement, will make a key contribution to a durable recovery. We also continue to give high priority to the accession of candidates to the WTO.

The goals we have outlined are a critical objective in which the IMF, World Bank, and WTO have complementary roles. We will continue to search for additional means to enhance the coherence of global economic policymaking by building on the strong base of collaboration established in recent years. A collaborative and mutually supportive approach based on the principles embedded in our institutions is a key ingredient for international economic recovery and sustained high quality growth that we all seek.