GA/EF/3123
1 November 2005
Second Committee Delegates Stress Need for Hong Kong Trade Talks to Focus on Eliminating Barriers, Ending Subsidies, Levelling Playing Field
Head of UN Conference on Trade Says Marginalized Countries Need Special Support to Develop Infrastructure
NEW YORK, 31 October (UN Headquarters) -- The upcoming Hong Kong World Trade Organization meeting in December should focus on eliminating non-tariff barriers and domestic subsidies, opening up markets to exports of agricultural goods and services, and preserving special and differential treatment in creating a "level playing field" for developing-country exports, speakers in the Second Committee (Economic and Financial) said today as it held its general discussion on trade and development.
India's delegate noted that non-tariff barriers, especially protective subsidies, cost developing countries more than $100 billion, almost twice the current level of official development assistance (ODA), adding that anticipated gains from agricultural reform and trade liberalization by developed countries had eluded developing countries. Of the estimated $165 billion in annual global welfare gains to be made through the complete removal of trade barriers in agriculture, developing countries would receive only about a quarter.
Quoting the United Nations Conference on Trade and Development (UNCTAD), he said that estimated welfare gains that developing countries would make from liberalized trade in non-agricultural products would range from $20-$60 billion, while export-revenue gains could increase by $50 billion. But developing countries would only benefit if job and revenue losses were minimized by the preservation of national autonomy when liberalizing, and by the protection of sensitive tariffs in small-scale and employment-intensive economic sectors.
Underscoring that point, the representative of Bangladesh said that open trade and the international financial system had exposed developing countries to a fiercely competitive environment, increasing their vulnerability to external shocks and forcing many to make painful adjustments to their economies. Paying severely for their openness and premature liberalization, they had learned that government non-intervention was no guarantee of economic stability. Many developed countries had attained higher rates of growth without opening their markets, or by opening them selectively.
He added that a trade-enabling development cooperation agenda was needed to realize open-market benefits, with "aid for trade" delving into deeper and more sustained capacity-building, including assistance to address supply-side constraints, lack of competitiveness and infrastructural inadequacies in developing countries. Moreover, special funds should be made available for microcredit and micro-projects to diversify production; to solve practical trade problems arising from liberalization, implementation and other related shocks; and to help with job creation.
Similarly, Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), stressed when introducing the report on trade, that marginalized and commodity-dependent countries must be provided with special support to develop their infrastructures, supply capacities and competitiveness. Unfortunately, that assistance could be thwarted by current trends that could adversely affect trade and development, including oil-price hikes, security concerns, natural disasters, as well as the risks and uncertainties of the international financial system.
Other speakers addressed the need for increased market access for developing-country products, noting that protectionism by some developed countries had persisted, despite their commitments to reduce or eliminate tariffs and non-tariff barriers on exports from developing countries. Quoting the 2005 Human Development Report, Myanmar's representative observed that low-income developing countries and least developed countries faced tariffs on their exports that were, on average, three to four times higher than those applied to trade between high-income nations.
Participants also expressed concern over the erosion of special trading preferences, noting that World Trade Organization negotiations had preferred to focus on their apparent value, rather than on resolving the problem. Mozambique's representative, speaking on behalf of the Southern African Development Community (SADC), stressed that such preferences had assured market access for the few export products of many developing countries and should be viewed as a development imperative. The World Trade Organization should focus on alleviating the losses incurred by preference-benefiting countries.
In addition, speakers stressed the importance of market access for non-agricultural products, and the need to place greater emphasize on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement, which addressed the problems faced by countries in accessing medicines at affordable prices. They also stressed the importance of South-South cooperation in accelerating economic growth, and the need for policy space in adapting to the international trading system.
Other speakers included the representatives of Jamaica (on behalf of the Group of 77 and China), Indonesia, Costa Rica, Australia (on behalf of the Cairns Group), Cuba, Malaysia, China, Myanmar, Libya, Viet Nam, United States, Kenya, Belarus, Sri Lanka, Uruguay (on behalf of MERCOSUR), Ethiopia, Lao People's Democratic Republic (on behalf of the Group of Landlocked Developing Countries), Nepal, Russian Federation, Pakistan and Qatar.
Anwarul Chowdhury, Under-Secretary-General and High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, also made a statement.
Also making statements were the representatives of the European Commission, World Intellectual Property Organization, International Union for the Conservation of Nature and Natural Resources and the Eurasian Economic Community.
Earlier in the meeting, Jomo Kwame Sundaram, Assistant-Secretary-General in the Department of Economic and Social Affairs, introduced the report on unilateral economic measures as a means of political and economic coercion against developing countries. Ransford Smith, President of the Trade and Development Board, introduced that body's report on its twenty-second special session.
The Second Committee will meet again tomorrow, Tuesday 1 November at 9:30 a.m., to take up implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the United Nations Human Settlements Programme (UN-HABITAT). It is also expected to take action on several draft resolutions in the area of humanitarian and disaster relief assistance.
Background
The Second Committee (Economic and Financial) met today to begin its general discussion on trade and development.
Before the Committee was a report of the Secretary-General on international trade and development (document A/60/225), which discusses recent developments in the international trading system, including the potential impact on developing countries of the Sixth World Trade Organization Ministerial Conference.
The report notes that developing-country merchandise exports expanded by 25 per cent from 2003 to 2004 to reach $3 trillion, representing an increase in their share of world merchandise exports from 24 per cent in 1990 to 33 per cent in 2004. The share of developing countries in the trade in services increased from 18.5 per cent in 1990 to 22.5 per cent in 2004, with an export value worth $495 billion. The expansion of many developing countries' trade, however, contrasts sharply with the difficulties that many low-income countries face in integrating themselves beneficially into the world trading system. Sub-Saharan Africa's merchandise exports stood at $146 billion in 2004, accounting for a modest share of 1.6 per cent of world exports, and representing a decline from
2.0 per cent in 1990. Moreover, the share of least developed countries in exports of the world's commercial services dropped from the already low level of 0.49 per cent in 1990 to 0.44 per cent in 2004.
In addressing those and other imbalances in global trade, the report highlights some of the key issues to be considered at the World Trade Organization Conference, to be held in Hong Kong, in December. They include the staging and end-date for a structure that has been set up to eliminate agricultural export subsidies; safeguard products that are essential to promoting food security, livelihood security and rural development in developing countries; and most-favoured-nation status.
According to the report, gains from eliminating agricultural trade barriers could reach an estimated $165 billion annually, of which about one quarter would go to developing countries. Those earnings could help those countries reduce poverty and hunger, improve the welfare of women and children, achieve environmental sustainability and provide work for youth. Proponents of eliminating cotton subsidies are calling for a fast-track, front-loading approach to removing trade-distorting policies affecting this sector, as well as duty-free and quota-free access for cotton producers and exporters in least developed countries. In assisting developing countries to meet the financial requirements of a more open trade region, the United Nations Millennium Project report has recommended an "Aid for Trade" funding mechanism, which is non-debt-creating and supplementary to existing development aid flows.
As for non-agricultural products (including services), the report says the United Nations Conference on Trade and Development (UNCTAD) estimates that welfare gains for developing countries could reach $20 billion to $60 billion annually, and that export revenue gains could increase by $50 billion. However, non-tariff barriers are difficult to identify, define and classify, which has posed constraints for developing countries, inhibiting their full participation in negotiations on the General Agreement on Trade in Services.
The report also highlights deteriorating terms of trade for commodities, noting that a platform for addressing these issues is being set up by the UNCTAD, supported by the Ministerial Declarations of the African Union and the Commission for Africa. In addition, World Trade Organization accession continues to challenge the least developed countries, which had called for the full implementation of guidelines on Accession of the Least Developed Countries, adopted in December 2002. Given that developing countries are still subject to requests for deep liberalization and stringent reform commitments, the specific needs of acceding and newly acceded countries should be addressed in the Doha negotiations.
Also before the Committee was a report of the Secretary-General on unilateral economic measures as a means of political and economic coercion against developing countries (document A/60/226), which contains the views of 14 countries rejecting or condemning such measures. A statement from The Economic and Social Commission for Western Asia (ESCWA) is also contained in the report, noting that unilateral measures on developing countries restrict investment, trade and technology acquisition, and prevent affected countries from accessing export markets and generating employment.
Other reports before the Committee include the reports of the Trade and Development Board (documents A/60/15, Parts I, II, III and IV) on its thirty-sixth and thirty-seventh executive sessions, its twenty-second special session, and fifty-second regular sessions, respectively.
Introduction of Reports
SUPACHAI PANITCHPAKDI, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), introducing the report on trade and development (document A/60/225), said the international community must focus on what could be done to enhance trade for development. Currently, developed countries were the major drivers of international trade, but the system was changing dramatically. The role of trade in the economic growth and development of developing countries was increasing in both quality and quantity. Developing countries today accounted for some 30 per cent of the most dynamic export products in world trade. Their diversification into manufacturing and services marked a progressive trend, with many developing countries emerging as regional or global locomotives of trade and economic growth. At the same time, South-South trade was enjoying an unprecedented expansion across continents, accounting for 43 per cent of all exports from the South.
However, only a handful of developing countries had benefited from rising trade, he continued. Many low-income nations, especially in sub-Saharan Africa, had remained marginalized from the trading system, and were also commodity-dependent. To ensure a broader distribution of gains, marginalized countries must be provided with special support -- beyond market access -- to develop their infrastructures, supply capacities and competitiveness. Unfortunately, some of the trends emerging today could adversely affect developing-country trade and development prospects, including oil price hikes and the resultant increases in energy costs and security-related concerns and measures. Other negative factors included natural disasters, risks and uncertainties in the international financial system.
The upcoming World Trade Organization meeting in December should stress the need for a successful and timely completion of the Doha Development Agenda, which would depend on political will and statesmanship, he said. The focus must be on market access and entry conditions for developing countries, particularly in agriculture and services. Care must be taken to minimize the effects of trade liberalization on the welfare of the poor and vulnerable. A credible package on development issues should emerge from the negotiations, which should include duty-free market access, enhanced market access for agricultural goods, meaningful access for developing countries' services exports; removal of trade-distorting non-tariff barriers; elimination of general subsidies; elimination of subsidies for cotton; and a mobilizing of investment and trade-related technical assistance for developing countries.
JOMO KWAME SUNDARAM, Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs, introduced the Secretary-General's report on unilateral economic measures as a means of political and economic coercion against developing countries (document A/60/226), saying that as part of the effort to monitor the imposition of unilateral coercive economic measures, Member States and relevant organizations were invited to provide relevant information, as well as their views, on the matter. Fourteen Member States and two United Nations bodies had sent replies, expressing the view that unilateral economic measures were inconsistent with international law. Three Governments, as well as the United Nations Economic and Social Commission for Western Asia (ESCWA) had reported the adverse impact of such measures.
RANSFORD SMITH, President, Trade and Development Board, introduced the report of the Trade and Development Board on its twenty-second session (document A/60/15, Parts I-IV), which included a high-level segment on economic growth and poverty reduction in the 1990s, with discussions focusing on key problems for development, as well as lessons learned. Observing that there was no universal prescription for economic progress, participants had stressed the need to tailor policy reform to a given country's specific needs. Previous reforms had often been inspired by international financial institutions or by commitments made in multilateral trading negotiations.
Light had also been shed during the session on the social and economic hardships that structural adjustment processes had thrust on many societies, he said. Many countries, particularly small economies, continued to face severe obstacles to economic growth as they struggled to build up export strength. However, policy changes had also helped to reverse economic decline in some countries, which had then paved a path to sustained growth.
Participants had also stressed that better regional integration and South-South cooperation could facilitate the economic reform process, he said. In addition, they had underlined the need for rapid debt relief, while emphasizing that relief must not come at the expense of aid flows. It had also been recognized that rapid growth in China and India had spilled over into neighbouring economies, especially the demand for commodities. But the global economic environment was still shaped by the developed world, which should share the necessary adjustments. Commodity prices had remained volatile, sinking to a level that was lower than some 20 years ago. Such price instability, which was not in the interest of producers or consumers, could lead to insufficient supplies.
Statement by Under-Secretary-General
ANWARUL CHOWDHURY, Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Development States, introducing the Secretary-General's report on international trade and development (document A/60/225), said that the 50 least developed countries comprised about 12.5 per cent of the world's population but their contribution to world trade stood at only half of 1 per cent. From total world merchandise trade of $8.9 trillion in 2004, the share of those countries was 0.64 per cent, and it had taken 14 years to reach that paltry increase from 0.56 per cent in 1990, when the least developed countries were fewer in number. The situation was worse for trade in services, falling from 0.49 per cent in 1990 to 0.44 per cent in 2004.
To help those countries build their capacities, he strongly underscored the need to expand the Integrated Framework for Trade-related Technical Assistance for Least Developed Countries, which currently covered 31 countries, to include all 50. Also, the provision of duty-free and quota-free preferential treatment by developed countries for all products from the least developed countries could generate welfare gains of up to $8 billion and export gains of up to $6.4 billion, and should, therefore, be considered.
He added that the situation became doubly complex for 31 landlocked developing countries, of which 16 were also least developed countries, because of their lack of territorial access to the sea and isolation from world markets. While the landlocked developing countries and some international financial institutions and transit neighbours had undertaken some action towards implementing the Almaty Programme, international support measures needed considerable enhancement.
The upcoming World Trade Organization Ministerial Conference should highlight the situation of the most vulnerable countries and heed the call for an expeditious cotton-based decision to protect the millions of cotton growers in the West African countries, he said. In addition, the international community should heed the proposal of African, Caribbean and Pacific countries for a "vulnerability index" to identify those products that were eligible for non-reciprocal treatment. The widespread economic hardship and uncertainty faced by preference-dependent least developed countries and small island developing States, as in the case of sugar, bananas and textiles, merited the consideration of an "Aid for Trade" fund to overcome supply-side constraints and address transitional adjustment costs alongside a staggered elimination of preferences.
Statements
DIEDRE MILLS (Jamaica), speaking on behalf of the "Group of 77" developing countries and China, stressed the urgent need for a substantial reduction of trade-distorting domestic support and the elimination of export subsidies by developed countries. Of equal importance was the need to ensure a strong special and differential treatment component in the final outcome of negotiations on agriculture. Protectionist measures by developed countries that continued to undermine the comparative advantage of developing countries must also be addressed, while developing countries must play a stronger role in developing safety, environmental and health standards.
She reiterated the need to address trade-related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and called for the full implementation of the Mauritius Strategy, the Brussels Programme of Action, and the Almaty Programme of Action. In line with the need to create a more equitable economic system that adequately protected vulnerable States from shocks, there was also a need to make the international property regime more development-oriented, so as to enable the transfer of technology and know-how to developing countries.
Member States must also work towards a legally binding international instrument on the preservation, protection and promotion of traditional knowledge and genetic resources, she said, in order that developing countries could benefit from the use of their own resources. There was deep concern that the deadlines for negotiations on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement in the Doha Ministerial Declaration had not been respected, and it was to be hoped that the trend would be reversed. Regarding the use of unilateral economic measures, the international community had not yet succeeded in rejecting that practice, which required corrective actions.
FERNANDO VALENZUELA, Head of the Delegation of the European Commission, said the European Union was conscious of the obligations placed upon the international community to achieve a universal, open, rule-based, non-discriminatory and equitable multilateral trading system, as well as market-access opportunities and real ability for poor countries to trade competitively and become successfully integrated into the global economy. Negotiations on non-agricultural market access, agriculture (including cotton), services, rules and trade facilitation provided the greatest opportunities for ensuring pro-development outcomes in the Doha Round, and the European Union remained firmly committed to those talks.
However, he noted, although market access was essential to development, progress was also necessary on full duty-free and quota-free market access for all least developed countries, which the Union already provided through its "Everything But Arms" scheme. It was hoped that developing countries in a position to do so would take steps in that direction. Also, least developed countries should not be asked to open their markets too rapidly, and neither should other countries with particular problems in that regard. Issues of special and differential treatment should be approached in a pragmatic manner.
Turning to the problem of preference erosion, he said the solution should come from trade and development measures, such as increasing South-South trade, creating duty- and quota-free access for least developed countries, and allowing longer transitional periods for particularly affected products. At the same time, support for capacity-building, restructuring, diversification and regional integration was also necessary. The European Commission alone would increase funds for trade related assistance to 1 billion euros per year, under its "Aid for Trade" programme. Hopefully, other Ministers would also agree on a strong aid-for-trade package of that sort.
REZLAN ISHAR JENIE (Indonesia), speaking on behalf of the Association of South-East Asian Nations (ASEAN), said that body had established a target date of 2015 for the liberalization of its services and the opening-up of investment sectors currently placed on the sensitive list. Mindful of the different stages of development in its membership, the grouping had created the ASEAN Integration System of Preferences Initiative, which helped narrow the development gap between more developed and less developed member countries. As a result, overall trade had grown significantly in 2004, with total exports from the 10 members increasing by 20.7 per cent to about $551.19 billion. Over the same period, total imports had increased to $492.86 billion.
He said that issues requiring urgent attention in the international trading system included the need to establish full modalities in agriculture and non-agricultural market access, as well as good progress in services, trade facilitation, and rules and solutions in implementation-related issues currently being discussed at the World Trade Organization. In addressing those issues, it was important to grant developing countries adequate policy space; consider the needs of small and vulnerable economies in making allowances for special and preferential treatment and increased technical assistance and capacity-building; establish immediate duty-free and quota-free market access for all exports from least developed countries to developed-country markets, as well as those of developing countries; realize the international commitment to an open, rule-based, predictable and non-discriminatory trading system; and promote South-South trade as a building block for North-South trade.
CINTHIA SOTO (Costa Rica), aligning herself with the Group of 77, said the macroeconomic decisions of developed countries often had significant effects on the economies of developing countries, including Costa Rica. Developed countries should take more care when formulating policies, because actions meant to assist developing countries could be undermined by contradictory policies. For example, while official development assistance (ODA) from countries of the Organization for Economic Cooperation and Development (OECD) was set at $50 billion this year, five times that amount was being paid in domestic subsidies to OECD farmers. While efforts were being made to help developing countries diversify their exports, they were undermined by the escalation of tariffs on higher value imports from developing countries. Finally, many countries that met their aid commitments also happened to apply some of the most restrictive agricultural trade policies, perversely leading to greater dependence on aid for recipients.
She said Member States must demand pro-development results at the Doha Round of negotiations. According to the World Bank, eliminating barriers could lift 140 million people out of poverty, leading to an 8 per cent drop in poverty levels. Costa Rica favoured substantial results in eliminating export subsidies, reducing aid which distorted trade, and providing developing countries with full access to all markets, including full trade-liberalization for tropical agricultural products. It was also necessary to help developing countries obtain access for non-agricultural goods. However, improved access would have little effect unless World Trade Organization anti-dumping rules were improved. There was also a need to address the issue of preference erosion in a manner that did not deprive countries without such preferences.
ANDREW SOUTHCOTT ( Australia), speaking on behalf of the Cairns Group of agricultural trading countries, said that distortions in the world agricultural markets continued to undermine the ability of many developing-country agricultural sectors to contribute to sustained economic development and poverty alleviation. With only a few weeks before the sixth World Trade Organization ministerial meeting in Hong Kong, it was crucial to agree on a date for eliminating all forms of export subsidies on all products. Member States should agree on a blueprint for achieving substantial reductions in trade-distorting domestic support, particularly that provided by the major subsidising countries; a detailed plan on how substantial improvements in market access for all products would be delivered; and a mechanism for countries with special and differential treatment.
He said the Cairns Group had consistently emphasized deep reform to global agricultural trade, so as to unlock the full potential of developing countries. The Doha mandate called on the industrial countries that were major subsidisers to make the greatest contribution to that reform effort, but the Cairns Group recognized that all countries should make a contribution. Numerous studies had shown that the global welfare gains of agricultural trade reform would amount to hundreds of billions of dollars in annual welfare gains and that the majority of those gains would accrue to developing countries, helping with poverty alleviation, advancing food security, and promoting economic growth and higher living standards.
NADIESKA NAVARRO ( Cuba) stressed the need to reform and strengthen the multilateral trading system and ensure that development was at the forefront of any trade negotiations. Reform should consider the importance of multilateralism in formulating and implementing international commercial agreements and standards; the principle of special and differential treatment for developing countries; the concerns of developing countries depending on commercial preferences; the adoption of specific measures to reach a lasting solution to external debt in developing countries; the preservation of necessary policy space for underdeveloped countries; and the elimination of conditionality.
She noted that the international trading system continued to be the victim of unilateral coercive measures, hindering a truly free commercial exchange among nations. The economic, commercial and financial blockade by the United States against a small island State like Cuba was the clearest example of that irrational policy. It not only prevented commercial exchange between both nations, but also tried to repress Cuba's trade with third States and their private companies. The action was an outright violation of the sovereignty of those States, and of the most elemental principles of international law.
ASHRI MUDA ( Malaysia), aligning himself with the Group of 77, ASEAN and the Cairns Group, said the South should not be content to be mere exporters of raw materials for the industries of the North, or importers of their processed or manufactured goods and services. The developed partners should assist developing countries not only through ODA but also through knowledge-sharing, the transfer of technology, technical assistance and investment. At the same time, South-South trade should not be neglected, and developing countries must make efforts to promote their trade relations and to help each other develop the necessary infrastructure to facilitate trade among themselves. The total merchandise exports from developing countries stood at $3 trillion in 2004.
Expressing the hope that the Doha Round negotiations would move forward with a balanced solution, he said it was essential for developed countries, as major economies and trading nations, to demonstrate flexibility and goodwill. The improvement of market access for products from developing countries, particularly agricultural exports, would have a direct impact on growth and poverty reduction. In terms of non-agriculture market access, sensitive sectors should be given some flexibility, and liberalization must take into account the level of development of domestic service suppliers. Some developing countries faced difficulties in implementing World Trade Organization agreements and decisions, because they lacked resources and technical capabilities. In that regard, Malaysia commended the initiatives undertaken by the UNCTAD to assess the Doha work programme, and to help countries develop appropriate institutional capacity and technical knowledge.
YAO WENLONG ( China) said that an open international trade system could bring about solid benefits to developing countries and poverty-stricken populations. China called on all World Trade Organization members to demonstrate greater political will and flexibility, to improve communication and cooperation, and adopt new measures that would ensure that the Doha Round reached a balanced multilateral trade agreement. Negotiations on agriculture were key to the whole process and all parties should work actively towards trade liberalization for agricultural products, the reduction of domestic subsidies and an early timetable for eliminating export subsidies.
Attention must also be paid to market access for non-agricultural products, he said, adding that early agreement should be made on tariff reduction in order to drastically lower tariff peaks and escalation. As for services, developed members should open up those areas in which developing countries had comparative advantages, such as the migration of persons. Negotiations should consider both the demands of developed countries for the promotion of trade liberalization, and the practical interests of developing and new members that they must protect. Adequate policy space and special differential treatment should be given to developing members. Implementation of special and differential treatments for least developed countries should also be a priority.
R. PRABHU ( India), aligning himself with the Group of 77, said that non-tariff barriers cost developing countries over $100 billion, almost twice the current level of ODA. The playing field must be "un-levelled" in favour of developing countries while respecting the autonomy of a country's policy space. Indeed, the anticipated gains from agricultural reform and trade liberalization by developed countries until now had eluded developing countries. Out of the estimated contribution of $165 billion in annual global welfare gains that would result from the complete removal of trade barriers in agriculture, the developing countries would only receive about a quarter.
Furthermore, agriculture was not only about trade, he said. Food security and rural livelihood were of immense economic relevance and had a socio-political dimension in many developing countries. Since the fundamental objective of any Government was to defend the livelihoods of ordinary people, a multilateral system that impinged adversely on such objectives was difficult to uphold. India itself faced demands from 100,000 farmers for the country to leave the World Trade Organization.
He said the UNCTAD estimated that welfare gains for developing countries from liberalized trade in non-agricultural products would range from $20-$60 billion. Export revenue gains could increase by $50 billion, leading to shifts in output and employment in key developing-country sectors, resulting in job and revenue losses. It was important to protect sensitive tariff lines in small-scale and employment-intensive sectors of the economy and to preserve a country's autonomy when deciding to liberalize. In addition, greater emphasis must be placed on key development issues, such as the TRIPs Agreement with regard to public health, which was meant to address problems faced by countries in accessing medicines at affordable prices. In terms of preference erosion, developing countries must be responsible for lowering preferential rates to zero and rationalizing the rules of origin. India would be finalizing a bilateral package of preferential market access for least developed countries into the Indian market, and welcomed the World Bank's "Aid for Trade" initiative.
U KYAW MOE TUN ( Myanmar) said the international trading system had remained unfair and inequitable, and that protectionism by some developed countries had persisted, despite their commitments to reduce or eliminate tariffs and non-tariff barriers on developing-country exports. In addition, developing countries were still facing difficulties in gaining access to international markets for their commodities. According to the 2005 Human Development Report, low-income developing countries and least developed countries faced tariffs on their exports that were an average of three to four times higher than those applied to trade between high-income nations. Special and differential treatment for developing countries was needed for an equitable international trading system.
He said that in 2004-2005, Myanmar's total trade had amounted to $4.9 billion, an increase of 6.6 per cent over the previous year. The country had been able to increase its trade volume despite restrictions imposed on its exports. Those unilateral coercive measures, applied as a means of political and economic coercion against Myanmar, had negatively affected trade and foreign direct investment (FDI) flows into the country.
JABER ALI RAMADAN (Libya), aligning himself with the Group of 77, said that the outcome of various world summits over the past five years had shown that trade could be a positive force to drive development forward and reduce poverty. The liberalization of trade in goods and services was an opportunity for developing countries to obtain $310 billion in welfare gains. To that end, the international community must work together in a multilateral fashion to ensure non-discriminatory treatment for all within the international trading system. The Doha Action Programme emphasized the importance of trade in achieving economic development, and efforts must be stepped up if development goals were to be met on time.
He expressed his country's hope for significant measures in both the agricultural and non-agricultural sectors, given that developing countries faced numerous constraints in those areas. At the same time, it was important to enhance the participation of developing countries in the international trade regime to ensure that their products reached the developed countries. They also needed support in financial services and transportation, as well as additional support to help them bear the brunt of price fluctuations. The UNCTAD should continue its role of helping to secure such resources.
Regarding unilateral coercive economic measures, he said they aggravated the economies of developing countries and had an adverse impact on their socio-political development. Such measures should be halted because they stood in the way of an open international trading system. He appealed to Member States for support in favour of Libya's accession to the World Trade Organization.
IFTEKHAR AHMED CHOWDHURY ( Bangladesh) said that open trade and the international financial system had exposed developing countries to a fiercely competitive environment, increasing their vulnerability to external shocks and forcing many to undergo painful adjustments in their economies. At the same time, globalization had failed to end narrow nationalism, selective exclusion and the pursuit of vested interests. Developing countries had paid for their openness and premature liberalization, while learning that government non-intervention was no guarantee of economic stability, and that market forces were not necessarily self-adjusting. Many developed countries had attained higher rates of growth without opening their markets, or by opening them selectively.
To realize the expected benefits of market openings, a trade-enabling development cooperation agenda was required, he said. "Aid for trade" initiatives should go beyond compliance or enabling trade negotiations into deeper and more sustained capacity-building, including assistance to address supply-side constraints, lack of competitiveness and infrastructural inadequacies. Developed countries should make available special funds for microcredit and micro-projects to diversify production; solve practical trade problems arising from liberalization, implementation and other related shocks; and help with job creation.
FILIPE CHIDUMO (Mozambique), speaking on behalf of the Southern African Development Community (SADC) and aligning himself with the Group of 77, said the SADC countries were concerned by the continuing lack of progress on development issues at the international level. Agriculture was a critical component of the World Trade Organization negotiations and there was a need for an expeditious, credible end-date for eliminating all forms of trade-distorting mechanisms, particularly agricultural subsidies. There was an urgent need to implement the Marrakech Decision in favour of net-food-importing developing countries and least developed countries. The introduction of new subsidies should be avoided, as should the increase in existing subsidies and the reintroduction of any form of export subsidies that had already been discontinued.
With regard to TRIPs and public health, he reminded Member States that the SADC countries were among the most affected by HIV/AIDS. There was concern that a permanent solution had not been found, and Member States were urged to work hard towards solving that issue. Regarding preferences, negotiations were not focused on finding a solution but rather on questioning the value of preferences. Indeed, preferences had assured market access for the few export products of many developing countries and should be viewed as a development imperative. A solution must be found within the World Trade Organization Doha Round and focus on alleviating the losses incurred by preference benefiting countries.
Suspension of Meeting
Shortly after opening its afternoon meeting, the Committee Chairman suspended it in order to hear reports regarding negotiations on several draft resolutions. The Committee then resumed its discussion on trade and development.
Statements
DUONG HOAI NAM ( Viet Nam) said international trade had increasingly become an engine for sustained economic growth, and a critical source of development financing. While the majority of exports from developing countries were agricultural products, distortions in the world agricultural market had continued to undermine the ability of developing-country agriculture to contribute meaningfully to sustained economic development and poverty alleviation.
This year, multilateral trade negotiations under the World Trade Organization Doha work programme would enter a crucial stage for its successful and development-oriented conclusion, he said. An international consensus was evolving that the Doha negotiations should be concluded no later than 2006 so as to contribute to the timely implementation of the Millennium Development Goals. Concrete actions should be taken by World Trade Organization members to address concerns raised by developing countries about their difficulties in acceding to the World Trade Organization or implementing some of its agreements. Acceding developing countries were still subjected to relatively deep liberalization and stringent reform commitments. They must be granted special and differential treatment, which was essential in addressing their special development, financial and trade needs.
SICHAN SIV ( United States) said his country was committed to trade liberalization as a way to ignite economic growth in a system that was more open and free. But trade by itself was not enough; good governance was essential to sustainable development. Governments must create structures and systems that allowed people to use their ideas and abilities to the fullest, and open up a world of suppliers and consumers to various products and services.
The successful conclusion to the negotiations under the Doha Development Agenda could lift as many as 500 million people out of poverty and add $200 billion annually to developing-country economies, he said. It was essential that the General Assembly's deliberations not adversely affect those negotiations. Member States must not construe previous World Trade Organization declarations and decisions in any manner that would attempt to prejudge the outcome of the negotiations. Last year, the United States had opposed the Assembly resolution on the present agenda item because it contained text that would attempt to prejudge World Trade Organization negotiations. Hopefully, this year's Assembly negotiations would lend momentum to trade liberalization while respecting the World Trade Organization's independent mandate.
SOLOMON KARANJA ( Kenya) said sub-Saharan Africa had performed poorly in world trade due to the continued use by developed countries of tariff and non-tariff barriers, which restricted developing-country access to developed country markets. Developed countries had also continued to shelter their producers through subsidies, making entry conditions for developing-country products difficult and uncompetitive. An expeditious successful conclusion of the Doha Round was crucial to the entry of developing countries into the global economy. One of the most contentious Doha issues had been the formula for tariff cuts on agricultural and non-agricultural products; market access; domestic subsidies; and export competition. The Round should establish timetables for the total elimination of export subsidies or domestic support by developed countries to ensure a level playing field in global trade.
Over the last two years, trade in commodities had been characterized by unstable prices, he said. Although there had been a marked improvement in prices during that period, especially on commodities from Africa and Latin America, rice gains were insufficient to have a positive impact on economic growth in those countries. The commodity crisis should be addressed urgently within the agricultural framework of the Doha Round. Efforts should also be made to establish an export-enhancement fund to help commodity-dependent countries build the key institutions and infrastructure needed to address supply-side constraints, so that they could maximize the benefits of a successful Doha conclusion.
ULADZIMIR GERUS ( Belarus) said Member States had often spoken of creating a genuinely equitable multilateral trading system as a tool to increase trade and growth in developing countries and countries with economies in transition. Currently, using the multilateral trade "tool" had not proven easy. A few months ago, during preparations for the 2005 World Summit, Member States had been unable to agree on important provisions on trade liberalization. Nevertheless, Belarus awaited the next World Trade Organization meeting with great hope, since successful negotiations would exponentially increase the export capacity of developing countries and those with economies in transition.
He called for support from Member States to expedite the accession of countries, including Belarus, to the World Trade Organization under fair conditions. Belarus had an open economy and was one of the leaders in the growth of exports in Central and Eastern Europe. Accession to the World Trade Organization would be in line with its sustainable-development strategy. However, countries were being asked to liberalize their economies and meet discriminatory obligations in economic reform, in addition to existing requirements, which exceeded those made by current World Trade Organization members. Belarus did not agree with such an approach, believing instead that any reforms must match the capacity of States to undertake them and enable them to benefit from the system. Indeed, the use of trade preferences by developed countries to exert political pressure on sovereign States was inadmissible, and flew in the face of all countries' development aspirations.
YASOJA GUNASEKERA ( Sri Lanka) said the World Trade Organization trade negotiations on agricultural products were critical, as they could have enormous impacts on poor communities. Developing countries needed improved market access to developed countries, which would mean reducing tariff peaks and eliminating tariff escalation, particularly for agricultural and processed-food exports of interest to developing countries.
In Sri Lanka, agriculture contributed around 20 per cent of gross domestic product (GDP), 18 per cent of merchandise exports and it supported 40 per cent of the population, she said. Out of a total population of 19 million, nearly 72 per cent lived in rural areas, mainly on agriculture and livestock-related activities. For the majority of small farmers, the process had been one of systemic impoverishment. Many had been squeezed out of farming altogether. Providing greater security for the rural masses would bring about more even and equitable development for the country as a whole.
NURY BAUZÁN DE SENES (Uruguay), speaking on behalf of the Southern Common Market (MERCOSUR), said that in keeping with the principle of open regionalism, MERCOSUR countries were actively negotiating with other countries and blocs to sign trade agreements that would help promote the expansion of trade and the strengthening of external relations with the rest of the world. However, the internal effort that each country was making required a favourable international environment that was rule-based, predictable and non-discriminatory. In such an environment, high and escalating tariffs must be eliminated, special and differentiated treatment in favour of developing countries must be secured and implemented, and the TRIPs Agreements must not become an obstacle to the development and implementation of health policies.
He noted that physical interconnection promoted development and the strengthening of trade ties, adding that the MERCOSUR countries were seeking to develop financing mechanisms to develop South America's infrastructure so as to facilitate trade between them. Regarding the Doha Round, MERCOSUR would continue to push for substantial reductions in trade-distorting domestic subsidies, substantial improvements in market access and the eventual elimination of all forms of export subsidies. In turn, developed countries bore a special responsibility for ensuring the success of the Doha Round and they should honour commitments to implement the reforms agreed upon four years ago.
EYOB TEKALEGN ( Ethiopia) said integration remained a mere wish for many low-income countries, particularly those in sub-Saharan Africa, whose share of the global trade had stagnated at best, and deteriorated at worst. For that reason, Ethiopia attached great importance to assistance to help the least developed countries achieve their development goals. In that connection, Ethiopia welcomed the commitment of world leaders to design mechanisms to ensure the full participation of low-income countries in the world trading system, and was encouraged by the "Aid for Trade" fund, which would help remove supply-side constraints. Ethiopia also welcomed the World Summit agreement to support commodity dependent countries that were vulnerable to volatile and weak prices, having itself lost $830 million in export earnings from coffee at the beginning of the century, which could have been used for development purposes.
In an effort to serve the goal of greater integration into the international economy, he said, Ethiopia had taken important steps to improve its trade policies, legal and regulatory environments, trade facilitation and trade-based institutions. In addition, the country's application for accession to the World Trade Organization was another strong signal of its commitment to abide by international rules and obligations. The World Trade Organization should support the fair and equitable terms of accession for least developed countries.
ALOUNKEO KITTIKHOUN (Lao People's Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries, noted that little of substance had been achieved to advance the Doha Development Round after four years of negotiation. Unfair trade policies had continued to perpetuate obscene inequalities and to deny millions of people in the world's poorest countries an escape route from poverty. Most troubling was that preparations for the World Trade Organization meeting in Hong Kong had been sluggish, if not stagnant.
Landlocked developing nations had remained marginalized in the multilateral trading system, mainly due to high transport and transit costs, he said. Facing the double challenge of distance and border crossings, they were heavily dependent on transit trade, which had recently been compounded by soaring oil prices. Due to narrow economic bases, small domestic markets and supply-side constraints, their participation in global trade had been limited and their share of world trade amounted to only 0.5 per cent of the merchandise trade and 0.6 per cent of trade in services for 2002. Their exports, mainly primary commodities, had remained uncompetitive, as they were subject to high-price volatility and fluctuating demand in the global market. The current World Trade Organization negotiations on market access for agricultural and non-agricultural goods should pay particular heed to products of special interest to landlocked developing countries.
BALA BHADRA BHARATI ( Nepal), aligning himself with the Group of 77, said trade benefits could finance the development of poor countries if those countries could compete in international markets. Those in a disadvantaged situation, such as the least developed and landlocked developing countries, deserved preferential treatment. Nepal would like to see the successful conclusion of the Doha Development Round in a way that took the needs and concerns of those countries into account.
He said the least developed countries faced serious constraints, especially in managing trade-adjustment costs and strengthening competitiveness. For example, with the phasing out of the quota system in textile and apparel trade, some small and medium-sized companies had been forced to close down, resulting in the loss of jobs and hindering social and economic development. Only the effective integration of least developed countries into the international trading system could enable them to bring about the level of trade and investment they needed for their development. In that light, Nepal welcomed the "Aid for Trade" concept, the Integrated Framework for Trade-related Technical Assistance to Least Developed Countries, and the Brussels and Almaty Programmes of Action, and would like to see their implementation. Domestically, Nepal had encouraged its private sector to take a leadership role in development efforts, with a focus on privatization and financial-sector reform.
MR. ARISTOV ( Russian Federation) said that further liberalization of international trade must consider the economic realities and requirements of various countries or groups of countries in extending the advantages of globalization and trade liberalization, and preventing a worsening of the situation for domestic producers. Although the liberalization of trade had contributed to economic growth, there were still opportunities to open up many areas of interest to developing and transition countries. If country specificities were taken into account, liberalization would contribute to their international competitiveness and provide incentives for economic growth.
If the World Trade Organization were based on the principle of equality, acceding members would not be required to make commitments beyond a standard set of obligations, he said. Hopefully, another step forward would be taken during the World Trade Organization meeting in Hong Kong to reach goals set out in the organization's framework. The Russian Federation had contributed to international trade liberalization by reducing its import duties and applying a special preferential regime to imports from many developing countries. Under Russian legislation, neither quotas, nor anti-dumping or special protective measures were applied against imports of goods from least developed countries.
AIZAZ AHMAD CHAUDHRY (Pakistan), aligning himself with the Group of 77, said discussion of Doha Round issues so far did not inspire confidence that the development agenda would be adequately reflected in the World Trade Organization negotiations. Only a broadly phrased framework agreement on agriculture had been adopted, but even that was proving difficult to elaborate upon and its development content remained uncertain. There was a need to identify clearly and achieve the development objectives of the Doha Round, and key benchmarks should include: deep cuts in rich-country government support for agriculture and a prohibition on export subsidies; deep cuts in barriers to developing-country exports; compensation for countries losing preferences; protection of the policy space for human development; a commitment to avoid "World Trade Organization-plus" arrangements in regional trade agreements; and the refocusing of services negotiations on temporary movements of labour.
He said the Hong Kong ministerial meeting should achieve an early harvest of agreements responding to the interests of developing countries. That should include: an agreement on the end-date for agriculture export subsidies, including an early end to cotton subsidies; agreement on a tariff-cutting formula for non-agricultural goods that would lead to early elimination of tariff peaks and tariff escalation against the exports of developing countries; a moratorium on the use of anti-dumping actions against low-income countries; a commitment to the liberalization of labour services; an end to arbitrary and abusive use of standards to restrain exports from low-income countries; and implementation of the special and differential provisions of existing World Trade Organization agreements.
Other initiatives that must be pursued urgently he said, were the creation of a trade capacity-building fund; the creation of a mechanism, perhaps with private-sector participation, for the stabilization of commodity prices; and a review, by both the World Trade Organization and the World Intellectual Property Organization, of a development dimension to the global intellectual property regime. Emphasis should also be placed on building the productive capacities of the weakest States.
FAISAL ABDULLA AL-HINZAB ( Qatar) said the upcoming World Trade Organization meeting in Hong Kong should emphasize the need to conclude the Doha Round by 2006. Negotiations should ensure the adoption of an open, fair and rules-based international trading system; that developing-country privileges were not eroded by protective measures, including non-tariff trade barriers; that developing countries enjoyed increased market access for their products, an increased role in formulating environmental and health standards; and increased technical assistance and capacity-building programmes to increase their trading opportunities.
He said agriculture should be prioritized in World Trade Organization negotiations, which should elaborate methods for improving market access, reducing export and domestic trade-distorting subsidies, and retaining special and preferential treatment. Regarding commodities, several developing countries were dependent on primary goods, continued to suffer from marginalization and were still vulnerable to external shocks. There was an urgent need to resolve the commodities question and take steps to stabilize volatile prices in that sector. It was also important to promote World Trade Organization universality by accelerating accession, with no political barriers and in full compliance with special and preferential treatment.
OROBOLA FASEHUN, Director, World Intellectual Property Organization (WIPO), said that a key aspect of that body's work was to advise nations on the compatibility of their laws with those of international intellectual property agreements. WIPO's legislative assistance was aimed at policymakers and those who drafted laws. When a developing country acceded to international intellectual property treaties, WIPO provided the training necessary to implement those treaties, upon request. Regional meetings were held in cooperation with WIPO countries to encourage the exchange of experiences, and WIPO was currently collaborating with a group of African countries to develop national structures to exploit local products and produce while protecting them. Assistance was also being given to Middle Eastern Governments to develop cultural industries.
He said economic studies on the intellectual property system had been conducted in ASEAN countries, and discussions had been organized in the Latin American and Caribbean regions. Meanwhile, the least developed countries had been a special focus and advisory services had been extended to them as they made preparations to implement the TRIPs Agreement by January 2006. As a member-driven organization, WIPO was committed to creating an inclusive intellectual property regime from which all States would derive benefits and through which they could attain sustainable development.
K. BHAGWAT-SINGH, Observer for the International Union for Conservation of Nature and Natural Resources (IUCN), stressed the need to reform, and ultimately remove, subsidies that harmed the environment and hampered trade, notably in agriculture and fisheries. The spread of invasive alien species and other environmental hazards through trade was a growing and global problem, requiring significant efforts to develop appropriate trade-policy measures to reduce such by-products.
Noting that biotechnology was developing rapidly, he stressed the need to protect intellectual property by providing fair rewards for technical innovation and risk-taking. At the same time, the international community must encourage the conservation of biological resources in countries and communities that harboured them and provide adequate compensation when they were used in a sustainable manner. There was also a need to help developing and transition countries to meet the increasingly stringent environmental standards of major consumer markets by upgrading production practices and strengthening regulatory mechanisms. In general, there was a need to strengthen environmental governance, so that Governments would be able to respond when changing patterns and volumes of trade threatened environmental integrity.
GRIGORY RAPOTA, Eurasian Economic Community (EURASEC), said that body had become the most dynamically developing trade and economic integration organization in the post-Soviet space, and it was working to establish a legal framework for cooperation. It had implemented several multilateral projects with international and regional organizations in sectors like energy and transport. Concrete practical measures had helped to nearly double the trade volume within EURASEC in five years to a level exceeding $53 billion in 2004. Negotiations on the accession of the Community's member States to the World Trade Organization was being pursued and Kyrgyzstan was already a member.
In that connection, the Community fully supported the decisions by the 2005 World Summit to accelerate and facilitate the accession of transition economies to the World Trade Organization, by supporting their efforts to undertake commitments that reflected the levels of their economic development, took into account their structural specificities and were consistent with the obligations of other World Trade Organization members.
He said the Community sought the assistance of the United Nations and its specialized agencies on a number of projects, including the construction of hydropower plants in Kyrgyzstan and Tajikistan to supply electric power to the Russian Federation via the territory of Uzbekistan and Kazakhstan. There were also agreements in transport, the agro-industrial sector and the elimination of uranium waste burial sites in Kyrgyzstan and Tajikistan, as well as in seeking solutions to the problems of the Aral Sea and the former Semipalatinsk nuclear test-site, which might require assistance. Five out of six EURASEC members were landlocked countries, and the Community also called for more intensive efforts to implement the Almaty Programme of Action.
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