Ladies and Gentlemen,
At UNCTAD VIII, the Cartagena Commitment urged that exports from least developed countries should be guaranteed duty-free access to major markets.
This proposal was simple, entirely practical, and morally unarguable.
In the bigger picture, the costs to importing countries would have been minuscule, and the
benefits to the 600 million inhabitants of the 48 LDCs potentially enormous. But too many vested
interests in particular sectors - most of them "sunset" industries in Western countries -- would
have been hurt. So the idea was stillborn.
Instead, LDCs had to settle for second-best: A high-level meeting in Geneva that would
focus instead on providing at least some LDCs - those whom the international community
pronounced ready - with a dose of trade-related technical assistance. The six multilateral agencies
involved in this initiative conducted a needs assessment which confirmed what was already well
known. The supply-side problems faced by most LDCs are enormous. They receive only a trickle
of foreign direct investment, despite strenuous efforts to make themselves "investor-friendly".
And their human and institutional capacity to cope with the demands posed by rules-based
multilateral trading system is on the verge of being overwhelmed.
If new trade negotiations commence in the coming weeks, their - perhaps I should say your -
need for further technical assistance will shoot up. We in the international agencies must be ready
to respond. But first we have to get the numbers right.
The World Bank estimates that the average cost to each developing country of
implementing just three of the agreements in the Uruguay Round was US$150 million. Putting
that figure into perspective, this was as much as the entire FDI received by Bangladesh and
Tanzania, two of the larger members of your group. For some of the smaller and weaker
members, it was four or five times the value of their annual foreign investment.
On the eve of the third WTO Ministerial Conference, let us therefore adopt a clear and
unambiguous position. Before LDCs are asked to implement any new international norms in trade
or trade-related areas, the cost of doing so must be quantified; the sources of funding identified;
and further technical assistance approved. This is a sine qua non.
Let us now turn to the heart of the matter. The main concern of LDCs at present is to stem,
and hopefully reverse, their marginalization, and to ensure their meaningful and beneficial
integration into the multilateral trading system.
To have a chance of overcoming the heavy odds stacked against these countries - ranging
from frequent natural disasters to civil war or AIDS - I would urge you to keep in mind five
Ways need to be found to obtain improved, and unencumbered, market access for your
exports. "Best endeavours" are not good enough: Only binding commitments will do
this time around.
Supply capacity needs to be strengthened, perhaps starting with the more familiar and
often less demanding markets in your own region. Subregional trade zones are a
promising means for a country to be able to learn to stand on its own feet.
Transport infrastructure needs to be upgraded, so as not to dissipate the comparative
price advantage which could be lost through high transport costs and long delays in
getting goods to market. It is no coincidence that over half of the LDCs are either small
island or landlocked countries, where this problem is particularly acute.
It is important to retain flexibility in the use of appropriate policy instruments, at least
for the time being, in order to strengthen the international competitiveness of those
sectors you deem to be of strategic importance.
Collective bargaining brings greater muscle to the negotiating table, but is only effective
if it is used to support precise, realistic and clearly articulated objectives. The meeting
of senior LDC officials at Sun City in South Africa, which we in UNCTAD organized,
endorsed this approach, and set out clear objectives for future negotiations. And in this
context it is with great pleasure that I take this opportunity officially to present to you
our Handbook for Trade Negotiators from Least Developed Countries. This should be
seen as part as UNCTAD´s effort to assist LDCs and other developing countries in
developing a positive trade agenda in multilateral Trade Negotiations.
You will be well aware that there might be attempts to divide the LDCs. Some may indeed
wish to see splits in the developing world. These moves should be resisted. Whatever the
rationale or justification given, the hard-won recognition of such key concepts as preferential
market access, adequate transitional periods, and special and differential treatment (S&D) in a
range of trade policy areas should be firmly defended.
Since the Uruguay Round, the underlying reality behind the provision of S&D measures has
not altered. If anything, the case has been strengthened. Far from being an exercise in generosity,
S&D should be treated as a corrective step that has two purposes in mind: first, to deal with the
structural weaknesses of LDC economies; second, to ensure a better balance in the distribution
of the benefits of the system for sustainable development.
These measures should be made an integral part of the rules and disciplines governing the
multilateral trading system.
The negotiations on agriculture could take initial moves, where the special needs of LDCs
must be recognized both in the area of food security and also in upgrading the productivity of
their agricultural sectors and protecting the livelihood of subsistence farmers.
As should be clear to anyone who has listened to UNCTAD in recent years, we do not
favour an approach whereby developing countries turn their backs on the WTO. We must
therefore work harder to ensure that the existing system delivers in favour of the majority of its
members, especially the weakest and poorest among them.
In order to reach that position, the first step surely is to ensure the universality of the
system, as quickly as possible. At present, 19 of the 48 LDCs are not WTO members. Several
of these are still distracted by conflicts; but those seven countries which are in the accession
pipeline today have rightly been complaining about the snail´s pace at which their applications
have been handled and the complicated nature of the process.
We must not compromise the transparency and integrity of the WTO multilateral rules and
disciplines. But the present process should be reviewed so as to reduce the exceptionally heavy
burden it places on LDCs, in administrative and human terms.
There has been an unfortunate tendency on the part of existing members, especially the most
powerful among the, to "raise the ante" for new applicants to the club. This may be a justified
tactic for an exclusive social club anxious to hang on to its elite status. It is definitely not for an avowedly universal association of nations that are at very different stages of economic
development, but all of which have to operate in the same global economic space.
Improved and clearly defined accession procedures for LDCs should therefore be a priority.
In this regard, consideration could be given to a "fast track" approach. Those 13 LDCs that have
not yet applied to become members cannot expect to remain unaffected by the processes and
evolution of the trading system. The train is moving along and gathering speed. But in order to
join on terms that are consistent with their trade, financial and overall development needs, they
need first to formulate their major negotiating objectives on the basis of their conformity with the
obligations of WTO membership and their national economic strategies.
Again, UNCTAD stands ready to help - provided that it, in turn, is given adequate resources
to do so.
Another area where we are already providing concrete assistance to LDCs is that of
attracting FDI. Investment policy reviews are being undertaken and investment guides produced
for a number of LDCs, in projects that emphasize the process as much as the final products. In
addition, a recent symposium was organized for LDC negotiators on the important subject of
international investment agreements, including the need for dual agreements to leave sufficient
space for national development policies. LDCs have a particular interest in attracting FDI, as they
need to strengthen their supply capacity. But efforts cannot end with attracting FDI - they need
to seek to ensure that the contributions that FDI can make to development are maximized.
National policies are central in this respect. While FDI is expected to play an important role, the
harsh realities facing your countries are such that ODA will continue to be critical for sustainable
development, and for financing critical public investments without which FDI might not be
forthcoming. Equally critical is for LDCs to get broader, deeper and faster debt relief. The
challenge facing your countries is to overcome the cynicism that has come to surround ODA by
demonstrating its effectiveness in building productive capacity. The challenge facing your
development partners is to honour the UN target of 0.15% of GNP, presently met by a handful
On behalf of the United Nations as a whole, UNCTAD has been asked to organize the Third
UN Conference on the Least Developed Countries. This important event will take place in about
18 months´ time, in Brussels, as the European Union has kindly offered to act as the host.
Preparations for the Conference are under way, focusing on country-level needs assessments
and aiming at identifying concrete measures to help your countries overcome supply-side
UNCTAD X will provide an opportunity to discuss many of the issues and will be a first step on the road to Brussels, to LDC III. I look forward to welcoming you all there, to what
promises to be a valuable occasion to take stock of development strategies and forge a new
broader consensus among developed and developing countries.
Thank you for your attention.