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UNCTAD COMMISSION RECOMMENDATIONS ON SERVICES, COMMODITIES

by Someshwar Singh


Geneva, 15 Oct 99 -- Developing countries need to be provided appropriate flexibility for opening fewer sectors and liberalizing fewer types of transactions, according to an UNCTAD Commission.

The UNCTAD Commission on Trade in Goods, Services and Commodities has made several recommendations at the end of its four-day meeting here Thursday.

In accordance with article XIX.2 of the General Agreement on Trade in Services (GATS), the Commission says the progressive extension of market access in developing countries should be in line with their development situation.

And, when making access to their markets available to foreign service suppliers, the Commission recommends attaching conditions to that access, aimed at achieving the objectives referred to in article IV of GATS.

In a section addressed to the international community, the Commission calls for initiatives to help build supply capacity and remove the barriers faced by developing countries' labour-intensive exports, as provided for under article IV of the GATS.

Some of the specific issues in services where the Commission has recommended action are:

* Support the development of appropriate telecommunications infrastructure, interconnectivity, interoperability and access to information technology in developing countries to allow them to benefit from opportunities offered by electronic commerce.

* Facilitate the recognition of qualifications of professionals from developing countries and provide them with effective access to mutual recognition agreements;

* Provide non-discriminatory access to information channels and distribution networks such as the global distribution system (GDS) in the air transport and tourism sectors;

* Facilitate developing country firms' access to international financial markets in view of the growing importance of financing in winning projects in export markets;

* Discipline anti-competitive conduct that is adversely affecting services exports of developing countries;

* Consider the possibilities of establishing disciplines on subsidies and investment incentives, including at sub-national levels, that adversely affect trade in services;

* Assist the UNCTAD secretariat in improving services statistics to meet the needs of policy makers and trade negotiators for the next round of GATS negotiations.

As a result of liberalization, the Commission has noted, developing country producers and consumers are fully exposed to world market price instability. The UNCTAD Commission has called on governments to explore the possibilities of market-based safety-net approaches both for export-oriented sectors and for the protection of low-income consumers.

The Commission also notes that the physical and administrative infrastructure for trade is inadequate in many developing countries, resulting in inefficient logistics, high transaction costs and loss of market opportunities. Governments need to support the creation of such infrastructure and to accept a greater role for the private sector in its provision.

In the light of the penetration by international trade houses and other transnational companies into procurement and distribution activities in developing countries' domestic commodity markets, the Commission says efforts need to be made to ensure that local farmers, processors and traders are in a position to participate equitably in these markets, for example, by improving their access to essential services such as credit, and increasing transparency in the activities of governmental and non-governmental enterprises.

Efforts should be made, the Commission adds, to decentralize existing international commodity market concentration with a view to enhancing producer-consumer cooperation.

Trade negotiations on agriculture should address issues of interest to developing countries, taking into account, inter alia, issues identified in the agreed conclusions of the Expert Meeting on examining trade in the agricultural sector (TD/B/COM.1/23).

The commitment to provide financial and technical assistance that are more focused on the problems of food security in the least developed countries (LDCs) should also be considered, the Commission noted. (SUNS4531)

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

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