Raymond Saner & Ricardo Guilherme (2007), The International Monetary Fund's Influence on Trade Policies of Low-income Countries:Valid Undertaking?, Journal of World Trade 41(5) : 931±981, Kluwer Law International, The Hague , The Netherlands .
This article analyses the involvement of the IMF in influencing the setting of trade policy and tariff regimes of low-income countries, in the specific context of the HIPC (Heavily Indebted Poor Countries) initiative and the related PRGF (Poverty Reduction and Growth Facility) lending mechanism. The authors begin by discussing, in brief terms, the prominence of Washington Consensus considerations on the guidance provided by the Fund, followed by a legal critique of the Fund's mandate on trade, notably in what pertains to surveillance activities and conditionality; in this section, the authors analyze whether the broadening of the Fund's traditional focus from monetary and fiscal policy to trade policy is truly within the boundaries of its mission. The authors tackle the issue of direct and indirect influencing by the IMF of poor countries' trade policies and tariff regimes, and how such influencing may occur as part of traditional interactions between the Fund and these countries, with special emphasis on the HIPC initiative, PRSPs (Poverty Reduction Strategy Papers) and the related provision of financial resources through the PRGF lending facility. Given the lack of consensus on the assumed benefits of trade liberalization for poorest countries as far as poverty reduction and economic growth are concerned, the authors discuss whether such an IMF ingérence in trade policy matters is appropriate for HIPC/PRGF countries. The article concludes with a short discussion on whether a redirecting of IMF towards its core business and away from influencing trade policy and tariff regimes would also help improve coherence among the international institutions involved with poverty reduction efforts, economic development and trade policy reforms in heavily indebted poor countries.
E-TISNET MONTHLY INFORMATION SOURCES, ISSUE 12/2007, DECEMber 20