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Avoid being paralysed by status quo, says Ricupero

by Chakravarthi Raghavan

Geneva, 19 Feb 2001 -- The task of UNCTAD to help developing countries in trade negotiations, involves suggesting initiatives to change the status quo which might upset well-established interest groups,  and what matters most is to identify the best approach for improvement of the trading system to make it more responsive to development aspirations and “avoid being paralysed by the status quo,” UNCTAD Secretary-General Rubens Ricupero declared Monday while opening the fifth session of the Commission on Trade in Goods and Services and Commodities.

The task of UNCTAD in assisting developing countries in the field of trade, Ricupero said, was far from simple. UNCTAD had to meet two different kinds of concerns, at times difficult to reconcile. On the one hand UNCTAD was required to assist developing countries to participate productively in trade negotiations. On the other hand, UNCTAD had also to ensure that the interests and views of all member States and groups of States are duly taken into account in making policy suggestions.

“In order to help developing countries, we need to suggest initiatives to change the status quo, but to do so might upset certain well-established interest groups. In such cases, what matters is to identify the best approach for promoting the improvement of the trading system in the sense of making it more responsive to development aspirations.”

“For this,” added the UNCTAD head, “we must avoid being paralysed by the status quo.”

To enhance the status of the UNCTAD’s Commissions as policy-formulating organs, UNCTAD-X and the Bangkok Plan of Action adopted there has asked that the work of Commissions be informed by the technical advice of the experts, placing the results of such expert meetings within the appropriate policy context and framework.

The Commission, which meets from 19 to 23 February,  elected Amb.  Boniface Guwa Chidyausiku of Zimbabwe as its Chair. The Commission, since UNCTAD-X and the Bangkok Plan of Action has before it the reports of four expert meetings on agriculture, construction services, protection of traditional knowledge and the impacts of anti-dumping.

The discussions and outcome at these expert  meetings, as in the case of the meeting on anti-dumping, has aroused concerns among the major industrialized nations, with the United States in a note circulated at the meeting that issues like anti-dumping and how the rules should be applied should be addressed at the World Trade Organization and its Committee on anti-dumping and the ad hoc group on implementation.

In placing UNCTAD’s work in context, and undertaking what he called “stocktaking of the past, as well as planning for the future,” Ricupero referred to the meeting on challenges and concerns faced by the least-developed and the net food importing developing countries (NFIDCs) as a result of the agricultural  reform process of the Uruguay Round, and said the realities (of the outcome) identified by the experts, were of great concern.

“After the lowering of trade barriers in developing countries, it was the rural poor - over 70% of the population in those countries - who were most affected by the exposure to cheap, often subsidized imports.  They were also the first to suffer form the autonomous freeze of domestic support measures, including subsidies, which was locked in as multilateral commitments under the WTO Agreement on Agriculture.”

Meanwhile, the food import burden had increased due to a combination of such factors as (1) steady fall in food aid, (2) local production losing out to cheap imports, (3) increased import prices for basic foodstuffs due to export subsidy reduction in supplier countries and, (4) declining terms of trade for exports.

All these had been amply document in presentations on numerous countries available in the report of the meeting.

At the same time, multilateral trade liberalisation, as so eloquently confirmed by trade statistics, had not resulted in tangible benefits to agricultural exports, which account for a significant share of the foreign exchange earnings of many LDCs and NFIDCs.

Based on these findings, elements were suggested by experts for inclusion in the agenda of the ongoing agriculture negotiations. The outcome of the meeting helped form the basis of negotiating proposals submitted by several LDCs and NFIDCs.

“The challenge we face now is to ensure that those concerns become an integral part not only of the negotiations but of their results,” Ricupero said.

The second expert meeting, that on national experiences with regulations and liberalizations in construction services sector and its contribution to development had brought out that stringent technical and financial criteria and tied aid constituted major barriers, as did restrictions on movement of persons, non-recognition of professional qualifications and technical requirements at various levels, not forgetting that “another important factor undermining the competitiveness of developing-country firms is the use of subsidies and government procurement in international bidding procedures.”

The experts had stressed the importance of participation in such projects resulting in “an effective transfer of technology” and had urged the assistance of multilateral financial institutions and bilateral donors.

UNCTAD had recently held long-distance dialogue on the subject with the World and the Inter-American Development Bank and counted on these and other regional banks to help redress the structural imbalances affecting developing countries in this sector. The experts hd also encouraged UNCTAD to promote a dialogue among all private and public players in this field.

Ricupero referred in this connection referred to the specific proposals recently tabled by the European Communities in the services negotiations, and the good use made in several proposals before the services talks of the ideas discussed in the expert meeting.

On the issue of protection of  trading knowledge (TK), innovations and practices in the light of several developments including the TRIPs Agreement and the global loss of biodiversity, the problems examined by the experts were not only about how to preserve TK, but also how to make better use of it in the development process and how to prevent its inappropriate use. Different options, and national and international actions had been considered by the experts, who had called for further discussions in WIPO Intergovernmental Committee on IPRs and Genetic Resources and Folklore, in the Working Group on implementation of Article 8(j) and Related provisions in the Convention on Biological Diversity and at the WTO.

The fourth expert meeting on antidumping and countervailing duties had made a number of suggestions on dumping and injury determinations and how they could affect developing countries. Their main thrust was to alleviate unnecessary adverse impact on the trade of these countries by ensuring: first, that they would not be subject to anti-dumping duties unless there were firms engaged in dumping and clearly responsible for injury inn the importing countries; and, second, that when such duties are applied, they would be no higher than necessary to alleviate such injury. Another reality described by experts from African countries in particular was the perceived influx into their markets of dumped imports and their inability to defend themselves effectively against injury, due to inadequate administrative and financial reasons.

This aspect required further study, Ricupero added.

The outcome of these meetings had been of great use for UNCTAD’s work in assisting developing countries.

“But our task is far from simple. We at UNCTAD need to meet two different kinds of concerns that are at times difficult to reconcile.  On the one hand, we are required to assist developing countries to participate productively in trade negotiations, but on the other hand we must also ensure that the interests and views of all member States and groups of States are duly taken into account in our policy suggestions.

“In order to help developing countries, we need to suggest initiatives to change the status quo, but to do so might upset certain well-established interest groups. In such cases, what matters is to identify the best approach for promoting the improvement of the trading system in the sense of making it more responsive to development aspirations.  For this we must avoid being paralysed by the status quo.”

UNCTAD’s efforts to help weaker countries to participate fully in the global economy, Ricupero continued, “are founded on good faith and on an ethical commitment” to making the multilateral trading system more development-oriented. During the years since the establishment of the WTO, the UNCTAD secretariat and member States alike have been fully aware of the fact that “in fulfilling this commitment, our role and that of  the WTO cannot be the same.”

To define the frontiers between UNCTAD’s work and that of the WTO “should not lead to any misunderstanding, provided we recognize that the WTO is basically a rule-making body with a dispute settlement mechanism, while our contribution is geared towards actively bringing the development perspective as a paramount concern into issues on the multilateral trade agenda.”

“The fact that we are not negotiating binding rules or agreements could be perceived as a source of greater flexibility and openness, enabling us to explore new avenues and confront a broader gamut of arguments or approaches to issues on the multiliateral trade agenda. This is an important ingredient of creativity in UNCTAD’s work, one which member States must appreciate and take advantage of, given the increasing complexity we face in managing globalization.”

“Quite simply,” Ricupero said, “the rules in debates that are not part of negotiations, such as expert meetings and this Commission session at UNCTAD, should be more flexible and afford greater freedom and innovation than the rules that should prevail in a negotiating forum: we are facing different types of constraints, constraints which paradoxically offer greater synergies between all institutional stakeholders involved in trade and development. Such synergies draw on the dual perspective of rule-making on the one hand, and a policy-oriented research and consensus-building on the other hand. In this context, UNCTAD’s comparative advantage is its ability to promote in an open and balanced manner new initiatives and ideas aimed at securing greater equity in international economic relations.”

Ricupero went on to cite the views of Prof. Gunnar Myrdal (who for nine years had headed the UN Economic Commission for Europe) that a research group such as the ECE should be “a free and independent scientific agent, which approaches the problems and reaches and states its findings, guided only by the inherited and established standards of the profession, without sideward glances at what would be politically opportune.”

Myrdal had further said that “a great deal of credit is also due to governments, which have been willing to pay the price of the embarrassing things sometimes said about them, in order to obtain organized data and analyses which they value and which would not otherwise be forthcoming.”

Finally, Myrdal had said, research organizations had a clearly practical purpose, and in the case of international organizations such as the ECE or UNCTAD, that purpose was “to serve the general aim of increasing rationality in the national and international policies of member countries.”

Myrdal had appealed for ‘statesmanship in research’, and that “lofty goal should guide us in the future,” Ricupero said. “This would require above all the constant effort to treat trade negotiations as a necessary but not sufficient condition for making trade an effective instrument for growth, alongside investments, enterprise development, technology and other elements.

“In other words, trade negotiations, even when balanced, well conceived and successfully conducted, are not enough in themselves to allow countries to benefit from their potential. In order to help developing countries become more competitive in the use of the opportunities opened up by trade negotiations, UNCTAD, the secretariat and member States alike will have to match and integrate in the years to come the elements in multilateral negotiations that influence the conditions of access to markets, while at the same time focussing on the decisive factors that enhance the supply capacity of goods and services.

“This,” Ricupero concluded, “is one of the major challenges for our work over the next few years, not only in this Commission, but in all UNCTAD’s activities.”-SUNS4840

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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