This meeting is the first of its kind for two reasons, UNCTAD Secretary-General Rubens Ricupero pointed out in an opening address to a High-Level Meeting for Integrated Initiatives for Least Developed Countries´ Trade Development, being held under the World Trade Organization (WTO)´s auspices today and tomorrow. It was the first meeting held in the context of the WTO specifically devoted to Least Developed Countries (LDCs). Secondly, it marked a new alliance among six major international institutions to develop a coherent and integrated approach to the LDCs´ trade-related problems. The other multialteral institutions involved in the Meeting are the International Trade Centre (ITC) UNCTAD/WTO, the United Nations Development Programme (UNDP), the World Bank and the International Monetary Fund (IMF).
UNCTAD has been actively involved in the preparations of the High-Level Meeting, and Mr. Ricupero pledged his continued active support to the Meeting itself and the implementation of its outcome. UNCTAD´s contributions to the Meeting would include the policy conclusions of the Trade and Development Board´s debate over the past two weeks on LDC agriculture.
Mr. Ricupero commended the commitment of WTO Director-General Renato Ruggiero in recommending duty-free access for all LDC exports, as well as the subsequent call by WTO Ministers in Singapore last December to convene a High-Level Meeting. In the opinion of the UNCTAD Secretary-General, the three key ingredients for a successful resolution of the "particularly difficult" problems of the LDCs were comprehensiveness, coherence and, as others had stated, ownership by the LDCs themselves.
Market access and special treatment under multilateral trade rules may not, by themselves, be sufficient to accelerate growth in the LDCs, Mr. Ricupero stated. But they were certainly necessary. Much remained to be done in terms of market access. A joint study just completed by UNCTAD and the WTO (document TD/B/COM.1/14) showed that of the six sectors with the highest levels of tariff escalation and tariff peaks, five were of direct or potential interest to LDCs. Those five sectors are: major agricultural staple foodstuffs and commodities; fruit, vegetables, and fish; the food industry; textiles and clothing; footwear, leather and travel goods. Difficulties also persisted as regards rules of origin for LDC exports.
Are the LDCs really integrating into world trade?
Picking up on Mr. Ruggiero´s observation that the LDCs today represent less than half of one percent of world trade, the UNCTAD Secretary-General questioned whether the LDCs were really integrating into world trade. Noting that only half of the 48 LDCs are currently members of WTO, and that their representation in Geneva is small, he said that the membership process of the remainder should be accelerated. The dispute settlement procedures of the WTO were costly and difficult, causing problems for LDCs in being able to utilize this mechanism adequately. Fresh thinking needed to be given to resolving this problem, possibly through the provision of international judicial assistance.
To assist LDCs to better seize market access opportunities, their productive sector would need to be strengthened and supply constraints removed. The foundations of the market economy in these countries need to be built "from the bottom up", Mr. Ricupero said. The LDCs had too little to sell in the world market. He also emphasized the need for training in the formulation of trade policies and the acquisition by the LDCs of negotiating skills. This required the commitment of all the agencies involved in the Meeting.
Development is a complex process, going beyond economic factors
Looking beyond the specific objective of improving market access for LDCs, the UNCTAD Secretary-General stressed that development was a complex process of interacting political and economic activities, and required a comprehensive strategy. It was difficult to attain development without a minimum of political and macroeconomic stability, and strong state institutions. Mr. Ricupero pointed out that most of the LDCs had been plagued by civil war and civil unrest, with an enormous loss in terms of human life (six and a half million since 1980) and production, trade or income (the civil war in Mozambique alone had resulted in an estimated US$60 billion in losses for the SADC region).
But development also required favourable external factors, including a significant reduction in foreign debt, an increase in official development assistance (ODA), and access not only to markets, but also to investment, financial flows and technology. He welcomed the launch of the World Bank/IMF Initiative for Heavily Indebted Poor Countries (HIPC), adding that he hoped it would soon be enlarged to cover all countries in need of debt relief. Paradoxically, at a time of continuous decline in ODA, with each successive year showing a new negative record, there has been a multiplication of international initiatives for the LDCs. Among these were the extension by the EU of Lomé Convention trade preferences to all LDCs, Japan´s and the United States of America´s initiatives for Africa, and initiatives taken by the United Nations. There was a need to ensure coherence among them, he said. Noting that the UNCTAD secretariat would soon begin preparations for third United Nations Conference on LDCs, scheduled to take place by the year 2000, Mr. Ricupero hoped that the current WTO-led Meeting on LDCs would dynamize the process.