Global Trends by Martin Khor

Monday 30 April 2012

South wins battle for new UNCTAD mandate

After a bruising negotiating session at a week-long Ministerial conference, the developing countries won a battle to give UNCTAD a renewed and broad mandate for its future work, including on the global economic crisis.


A fresh mandate has been given to the UN Conference on Trade and Development to continue the scope of its present activities as well as to take on some new issues in the next four years.

This was the main result of the UNCTAD’s ministerial conference (known as UNCTAD XIII) that ended in Doha (Qatar) on 26 April.  It came after a huge battle between developing and developed countries that went on for several months, first at Geneva (where the UN organisation is located) and then at Doha.

At times it seemed as if the developed countries would succeed in blocking the UN’s premier development think tank from continuing its work in some key areas, especially on the global economic crisis, financial issues, macroeconomic policy and debt.

But this onslaught was eventually successfully resisted by the developing countries which stayed united under the Group of 77 and China as well as the groupings of Africa, Asia and Latin America and Caribbean and the least developed countries.

The adoption by consensus of the Doha Accord was hailed as a success by all parties at the end of conference. It was a triumph of multilateral cooperation at a time when there have been many failures, said one developed country grouping at the close of the meeting.

This is indeed true.  The World Trade Organisation’s trade round, initiated in 2001 also in Doha, has been unable to conclude due to an unbridgeable North-South divide.

The UN Framework Convention on Climate Change negotiations face severe strains with each recent annual conference becoming a nail-biting event as to whether there would be a bust-up or a temporary patch-up agreement in the last hours.

The preparations for this year’s other big event, the UN Sustainable Development Conference to be held in June in Rio de Janeiro, are also facing serious challenges, with many areas of disagreement and only a few more days left to negotiate.

It is becoming evident that we are now in a new era of great difficulties in international relations, where principles and issues that for a long time were accepted as being part of (or even the bedrock of) North-South cooperation have now become issues of serious contention.

At the heart of this sea-change is the concern of many developed countries that they are losing ground to several developing countries in economic performance and global influence, and that to check this trend the old contours of international cooperation have to be re-drawn. 

Thus, the North seems to be re-thinking whether to continue (and if so then how to continue differently) the practice of developing countries being provided development assistance and trade preferences, or with the recognition that developing countries be allowed to take on lesser obligations in agreements on trade or environment in recognition of their lower economic levels.

Thus there are attempts to remove or drastically re-define the “common and differentiated responsibilities” principle in environmental agreements especially in the climate area.

Similarly there is an attempt to downgrade or re-define the extent to which developing countries get special and differential treatment in trade agreements, with the developed countries not so interested anymore in the WTO where this principle is alive, and instead wanting to negotiate bilateral and regional agreements where the reciprocity principle prevails, and both sides have to make similar commitments.

The UNCTAD conference, held once in four years in order to decide on UNCTAD’s specific work until the next conference, almost became a victim of this larger global geo-political change.

Since the last conference in Accra in 2008, the UNCTAD secretariat has continued to do outstanding work on the global economy, providing incisive analysis of the causes of the financial crisis and the inadequate policy responses by developed countries, and offering proposals for solutions that are more systemic (and more workable) than the orthodox.

In recent weeks, many pointed out that UNCTAD has through the years been ahead of the curve, providing analyses and proposing solutions vastly different from those the IMF and World Bank, and often proving right.

The developed countries, especially the grouping JUSSCANZ (that includes the US, Japan, Canada, Australia and Switzerland) and sometimes supported by the European Union, sought to remove or dilute the mandate of UNCTAD to work on finance and macro-economic issues, arguing that it should stick to only trade-related issues.

Developing countries argued that UNCTAD has through the years enjoyed a broad mandate to address a broad range of issues covering not only trade and development but also finance, technology and sustainable development.

They and a growing group of NGOs and scholars, including over fifty former senior UNCTAD staff, argued that UNCTAD’s work on the global financial and economic issues has not only proven valuable but even more important now that the world is in a crisis.

“The credibility of the orthodox theories and of the IMF and World Bank is now low because their prescriptions led to the crisis, and the developed countries are seeking to silence UNCTAD because its analyses and proposed reforms have gained ground,” said a senior developing country Ambassador in the corridors of UNCTAD XIII.

On April 13, the G77 and China made a strong statement in Geneva that it could no longer make any concessions and that at a minimum the Doha conference should reaffirm that UNCTAD continue the work agreed to at the Accra conference in 2008, and take on any additional work that the Doha conference may agree on.

Since the developed countries were not willing to give UNCTAD any new work, the battle in Doha was really about whether or not to reaffirm the Accra Accord of 2008, which would allow UNCTAD to continue its present work.

After often heated negotiations, which lasted till 5.00 a.m. on the last night, the G77 and China and its regional groupings finally succeeded in convincing the developed countries to reaffirm the Accra Accord, to not place new conditions on UNCTAD’s future work, and to continue to work on the financial crisis.

The JUSSCANZ group had opened another front to narrow UNCTAD’s work by proposing that UNCTAD stick to its “core” mandate and not to “duplicate” the work of other international organisations.  By this it meant that UNCTAD should only work on trade issues, and leave finance and technology to the IMF, World Bank and others.

The G77 and China succeeded both in having the Accra Accord reaffirmed as well as in maintaining UNCTAD’s broad mandate.

In the Doha Accord adopted on 26 April, para 16 reaffirms the Accra Accord which it says remains valid and relevant, while para 17 states that UNCTAD remains the focal point for the UN for an integrated treatment of trade and development and interrelated issues of finance, technology, investment and sustainable development, while enhancing synergies and complementarities with other UN and other international organisations.

In closing speeches, the G77 and China said what was achieved at UNCTAD XIII had been very significant, and UNCTAD now has a clear road map for its work for the next four years.

The European Union welcomed the Doha mandate which it said gave UNCTAD a very solid mandate for the next four years.

The JUSSCANZ group said UNCTAD XIII had a positive conclusion, and this was a success for multilateral cooperation.

The NGOs, which played a significant role in UNCTAD XIII, said they were concerned that some countries tried to circumscribe the work of UNCTAD on the financial crisis but it interpreted the outcome to mean that UNCTAD can address the root causes of the crisis in order to help avoid future crises.

Thus ended the UNCTAD XIII, in which international development cooperation was put to a severe test, and the developing countries came out successfully in defending the mandate and work of the UN’s most important development organisation.