Doha trade talks: the main risk is a "gutless" agreement

• Pages: 148-149

Page 148

At a time when the global community is focused on breaking the deadlock in the Doha Round of multilateral trade talks-with an eye on the December Hong Kong ministerial meeting of the World Trade Organization (WTO)-the IMF is stepping up its push for freer trade, on the part of developed and developing countries. Hans Peter Lankes, Division Chief in the IMF's Policy Development and Review Department, spoke with Christine Ebrahim-zadeh of the IMF Survey about these issues in the context of a recently concluded IMF review of its work on trade.

The IMF has long urged its member countries to liberalize their trade restrictions and to engage in multilateral trade liberalization.

And, over the past few years, it has intensified its focus particularly on the effects of the trade policies of the industrial countries. "IMF management is quite active in urging rich nations to open their markets to developing countries to help spur economic growth," Lankes said. "But it's not about developing countries versus industrial countries," he added.While developed countries can play a critical role in removing market access restrictions, reducing tariff escalation, and cutting agricultural and other subsidies, there are good reasons for developing countries to also liberalize their own trade regimes."Much of the benefit of trade reform is domestic and can be reaped unilaterally, whether or not other countries liberalize as well. And there is also mileage to be gained from developing countries opening their markets to each other. They tend to be more restrictive to each other than they are to industrial countries," he said.

While most countries welcome, in principle, the prospect of a freer trading environment, some are apprehensive.

Countries that fall into the latter category are notably the least developed countries and some small island economies in Africa, the Caribbean, and the Pacific, who feel they will be damaged by the loss of preferential access that their exports to developed country markets currently enjoy. In response to this-and the legitimate concern that these countries' balance of payments might suffer in the short term-the IMF introduced, almost a year ago, the Trade Integration Mechanism (TIM). The TIM enables the IMF to assist member countries in meeting balance of payments shortfalls that might result from multilateral trade liberalization. To...