Washington, 24 April 2004

International Monetary and Financial Committee (IMFC)

Mr. Chairman,

Sustaining the economic recovery

The improved economic situation in Asia and the United States is giving an important boost to world trade growth, which the WTO is projecting could reach 7.5% in 2004 compared to 4.5% last year. But when you look around the world, trade growth is uneven. There remain many barriers in place that are preventing trade from realising its full potential to support sustained economic growth and job creation. These barriers must be removed. The best way to do that, I believe, is to advance the multilateral trade negotiations and bring about a successful conclusion to the Doha Round as soon as possible.

Multilateral trade system is functioning well

One of the most important developments this year, outside the Doha Round, will be preparing for the full elimination on 1 January 2005 of the remaining quota restrictions that were introduced in the 1970s on trade in textiles and clothing under the Multifibre Arrangement. This will be a major achievement for the WTO, and it will provide some developing countries with important new opportunities for export growth. But because the distortions in this area have been so longstanding, there are others who understandably are apprehensive about their future ability to compete.

Doha Round

With regard to the Doha Round, the trade negotiations have moved on from the setback that occurred in Cancún last September. Intensive consultations among WTO Members are now taking place, in a constructive and determined manner, with the aim by this summer of completing framework agreements as a basis on which the final phase of the negotiations can be conducted.

Active problem solving and political commitment is needed over the next three months to ensure that framework agreements are reached in the key areas and that there is a solid platform for further work overall. We feel that there must be no slippage in the level of ambition that prevailed when the Round was launched, particularly to increase market access, if trade is to live up to its potential to deliver income growth and poverty reduction worldwide. The support of the IMFC in endorsing that message would be valuable, particularly since we are now at that crucial but tricky juncture when our members need to translate their words into action .

Trade Integration Mechanism

The IMF's new policy — the Trade Integration Mechanism — is a welcome contribution to the Doha Round, in particular to attaining ambitious market access results. The Mechanism can help reassure low income developing countries that they will receive assistance from the international community to deal with adjustment difficulties they encounter from the loss of trade preferences which will result automatically from the lowering of MFN tariffs at the end of the Doha Round.

The WTO is cooperating closely with the IMF in making WTO Members aware of the opportunities that the Trade Integration Mechanism presents. In this regard, we look forward to the participation of the acting Managing Director, Anne Krueger, at the WTO General Council meeting in May. We hope also to be able to contribute constructively to its effective implementation by the IMF.