Statement by Mr. Carlos Fortin, Deputy Secretary-General of UNCTAD
Mr. Chairman, Excellencies, distinguished delegates, ladies and gentlemen,
Allow me to start by conveying the greetings and the best wishes of the Secretary-General of UNCTAD, Mr. Rubens Ricupero. He was very much looking forward to being here today, but was unable to do so. It is my pleasure to represent him and UNCTAD at this important meeting.
May I also congratulate and thank the Government and the Delegation of the Kingdom of Morocco, and most notably yourself, Mr. Chairman, for the excellent work you have done at the helm of the Group of 77 and China. I would also like to congratulate the Government of the State of Qatar on its election to chair the Group in the year to come, and the Government of the Democratic Republic of Timor-Leste on its admission to the Group.
It would not be an exaggeration to say that this meeting takes place at a decisive moment in the history of international relations and international development cooperation since the U.N. was created. Indeed Secretary-General Annan said as much two days ago at the General Assembly when he stated that the U.N. had "come to a fork in the road." He was, of course, referring to the field of international peace and security, where there is a challenge to the fundamental principles of collective security on which, in his words, "however imperfectly, world peace and stability have rested for the last 58 years".
Faced with this challenge, many felt that the field of international economic relations remained a bastion of multilateralism. The failure of the Cancun Ministerial Meeting of the World Trade Organization has, unfortunately, cast doubt on that belief also.
There is nothing to be gained by trying to apportion blame. It is useful, however, to recall the sequence of events leading to the decision to suspend the Cancun Meeting without an agreed final outcome. Following the successful agreement on TRIPs and Public Health, which augured well for the Meeting, the United States and the European Union tabled their joint proposal on agriculture. This was regarded as inadequate by many developing countries, in-as-much-as it contained no quantitative targets nor target dates. Furthermore, they objected to the procedure whereby the two largest trading partners struck a compromise among themselves and presented it to the other countries as the basis for negotiation. The response was the emergence of the Group of 20, later Group of 22 and currently Group of 21 developing countries with a common position on agriculture.
The emergence of the Group of 21 is one of the positive outcomes of the whole process. Its rapid tabling of a comprehensive and technically accomplished counter-proposal on agriculture showed the degree to which developing countries could respond both effectively and responsibly to the challenge. If to this we add the participation of the Finance Ministers of the Group of 24 developing countries in the recent meetings of the IMF and the World Bank in Dubai, which, again showed both the technical solvency and the political realism of the positions of developing countries, it is clear that developing countries in various fora are playing an increasingly active role in keeping multilateralism alive and relevant.
In this context, the contribution of the Group of 77 and China as the structure that can help coordinate and articulate the developing country positions in the economic field is central. With the General Assembly seized with the question of the follow up to the major Summits and Conferences, it is incumbent on the Group to help advance a genuinely integrated and coherent development agenda, based on the Millennium Development Goals and taking into account the Doha Programme of Work, and the Monterrey and Johannesburg outcomes. The G77 is particularly well suited to this task. Not only has it been a decided proponent and practitioner of multilateralism in its relations with other groupings, but it has adhered to multilateral principles of consensus-seeking and collective decision making in its own internal processes. The forthcoming Marrakech High-Level Conference on South-South Cooperation is yet another example of this multilateral vocation. And, equally important, it is now generally recognized, not least by the President of the World Bank, that at the heart of the problems confronting the world trading system - and we would add, international economic relations more generally - lies the problem of the imbalance between "the rich and the powerful and the poor and numerous".
In this scenario UNCTAD can be of help. Indeed, the theme of UNCTAD XI, which as the Chairman reminded us, will take place in Sao Paulo, Brazil, in June of 2004, is precisely that of "enhancing coherence between national development strategies and global economic processes towards economic growth and development, particularly of developing countries". Within the theme, four sub themes have been identified:
Development strategies in a globalizing world economy;
Building productive capacity and international competitiveness;
Assuring development gains from the international trading system and trade negotiations; and
Partnership for development.
This agenda is an effort at moving away from what we regard as a false dichotomy: whether it is more important to improve the international environment for development or improve domestic policies and governance. We believe it is both, and that they are furthermore closely related.
This is well exemplified by the trade negotiations. If we were to be asked how to define the development component of the programme of work on trade, we would probably summarize it under five rubrics: access, rules, transition, support and interdependence. Let me, Mr. Chairman, say a few words on each.
Access: under this we include, of course, the need to reduce and, ideally, eliminate barriers, whether tariff or quantitative, making it difficult for developing countries to export their goods and services to the rest of the world; but we also include the need to put an end to other trade-distorting factors, notably subsidies. And may I here refer specifically to an example in the field of international commodities. It is what Secretary-General Ricupero has recently called "the international scandal of cotton". As he explained in ECOSOC, the international cotton market is grossly distorted by the existence of subsidies, particularly in the USA, which have led to a veritable crisis for developing country producers. 25,000 cotton farmers in the United States receive between US$ 3 and $ 4 billion annually in subsidies, allowing for inefficient overproduction to continue and depressing prices. As a result, last year Africa as a whole lost about US$ 300 million, with West Africa losing US$ 191 million. Most affected countries are Benin, Burkina Faso, Chad and Mali.
Rules: refers to the need to make the rules on international trade adopted at the WTO development- friendly. This applies both to the implementation of existing rules, such as on anti-dumping, and to potential new rules. On the latter, attention should be paid to not expanding the scope of trade rules to unrelated areas, which would both dilute the force of the trade rules proper and unduly reduce the space for national development policy of developing countries.
Transition: it refers to the need to allow for developing countries adjusting to the shocks entailed by implementing their obligations under the international trading system. Special and differential treatment is an accepted component of the integration of developing countries into the world trading system, and it should be made operational.
Support: it entails the provision of technical assistance to implement the obligations entered into by developing countries within the WTO, as well as to participate meaningfully in negotiations and indeed to accede to the WTO for those countries which are not yet members. But it also most importantly means support to expand productive capacity, generate exportable surpluses and become competitive. Investment and transfer of technology are essential here. Trade preferences can be seen in some cases as a necessary condition to expand trade, but they are seldom a sufficient condition, particularly for the least developed countries. The need to support developing countries´ efforts at diversification within and out of commodity production is especially relevant here, with prices of commodities, especially agricultural, at historic lows and the terms of trade developing countries deteriorating: excluding principal petroleum and manufactured goods exporters, the terms of trade of developing countries have fallen by 20 per cent since 1980. For African countries, which are the most commodity dependent group, the fall has been 25 per cent.
Interdependence: it refers to the need to link international trade policy and negotiations with developments in other sectors of the world economy. Two such links have already been accepted by Governments in the WTO, when they created working groups on trade, debt and finance and on trade and technology transfer. Their work should be strengthened.
Mr. Chairman, this is thus the challenging agenda before us. Cancun was not another Seattle. Positive things came out of it: issues were clarified, and developing countries exhibited a new and highly responsible assertiveness. But there is no denying that the Cancun failure has created frustration, a loss of confidence in, and fear for, the future of the multilateral trading system. UNCTAD XI, just as it did after Seattle, can perhaps help re-establish trust, and in so doing reduce the frustration and dispel the fears. The contribution of the G-77 to this endeavour is, as always, crucial.