South-South cooperation on trade is aimed at removing distortions in the world market in order to facilitate South-South exchanges, and not at dictating to the market, Carlos Fortin, Officer-in-Charge of UNCTAD, told the Trade and Development Board this week. The Board, which opened its annual two-week session on Monday, is meeting in Geneva to examine global economic trends and review the work priorities of the organization accordingly. This year it is taking a close look at new developments in international economic relations and their policy implications, particularly in the light of UNCTAD XI, which took place in São Paulo last June.
A note by the secretariat, Follow-up to UNCTAD XI: New developments in international economic relations (TD/B/51/6), served as the basis for discussion during a day-long segment on 5 October. The note highlights the emergence of a new geography of trade, in which the countries of the South are increasingly moving from the periphery towards the centre of world trade and investment. A South-South strategy focused on several priority areas could reinforce and accelerate the transformations under way in South-South trade, investment and economic cooperation. This would enable developing countries to become a real engine of sustained growth and to diversity their economies, generate employment and reduce poverty, both at home and elsewhere.
Some speakers, however, warned that the new trade dynamism in the South appeared to be largely unsupported by significant increases in investment or other resource flows, and that most export and investment growth in the South was concentrated in just a few developing countries. Some of the recent gains, they suggested, might prove to be fragile and shallow.
One question addressed by the session was how the international community could work together to ensure that the emerging international economic geography benefited all countries and peoples, particularly the poor and women. Development solidarity in favour of the South on the part of governments, global corporations and other actors in the North was considered important in that regard, and particularly the issues of national policy space and corporate responsibility. "What is happening in today´s world is largely the result of the dynamism of international capital, and the role played by that dynamism carries with it some responsibilities", Mr. Fortin said. But, he added, "this is not simply a call to charity or to abstract morality; it is a call for good business. A company that is respectful of the environment of its host country is likely to be better received, to last longer and in general to have an easier life than a company that does not".
Civil society hearings
On the Board´s first day, 4 October, hearings were held with civil society representatives as part of the Board´s efforts to include all development actors in its work. Those efforts have now been institutionalized by the São Paulo Consensus (TD/410), one of the two documents adopted at UNCTAD XI.
Most speakers in the hearings agreed on the need to strengthen UNCTAD´s development policy analysis within the framework of differentiated treatment that enables each country to find the right balance between its national policy strategy and its international commitments. Future negotiations arising from the "July package" adopted by the WTO should take those considerations into account, they said. The need to link the issues covered by UNCTAD´s mandate with the cross-cutting issue of gender equality was also stressed, with a call for the systematic gender disaggregation of all UNCTAD statistics. NGOs urged that UNCTAD´s work on commodities should be strengthened. Mr. Fortin said that one of the principal achievements of UNCTAD XI had been the launch of a commodities task force, which would seek solutions to the many problems faced by commodity-producing countries.
The Report on UNCTAD´s assistance to the Palestinian people (TD/B/51/2 and Corr.1) was considered by the Board on Wednesday, 6 October. It says that the estimated 4.5% growth in real GDP in 2003 is not sufficient to signal genuine recovery, and that the Palestinian economy remains extremely fragile (see press release UNCTAD/Press/PR/2004/030 of 29 September.) One speaker asked why there was a specific UNCTAD programme of assistance to the Palestinian people, given that the economic indicators of many of the least developed countries (LDCs) were much worse and that they did not benefit from special attention or special treatment. Others praised the resilience of the Palestinian economy in the face of many hardships, and said they hoped that more resources would be made available to the programme to help build peace in the region.
On 7 October, during its consideration of interdependence and global economic issues from a trade and development perspective, the Board discussed the Trade and Development Report 2004 (UNCTAD/TDR/2004). The report highlights the need for the international community to establish a more global general policy framework that could strengthen the coherence between the international trade system and the international monetary and financial systems (for background, see press releases UNCTAD/PRESS/PR/2004/020 and 021 of 16 September).
WTO Director-General Dr. Supachai Panitchpakdi addressed the Board today during its review of developments and issues in the post-Doha work programme of particular concern to developing countries. He said that the recently adopted "July package" ensured that that work programme - the "Doha development agenda" -- was now back on track. While the package did not herald the end of the Round, which was never its aim, it did provide an "excellent launching paid" for further work. One of the main challenges facing the WTO was still the integration of developing countries into the trading system, and in that regard WTO members should demonstrate the "requisite political will and flexibility" and also work on the basis of "realistic" ambitions and avoid "extreme" positions.
A note by the secretariat presenting a post-UNCTAD XI perspective on the post-Doha work programme (TD/B/51/4) states that the Conference enhanced UNCTAD´s comprehensive mandate in key areas of international trade and development and describes the new initiatives launched there. Many speakers this morning similarly stressed the importance of the São Paulo Consensus, and of the WTO "July package", in the resumption of negotiations within the post-Doha framework. The Consensus affirms that assuring development gains from the international trading system and negotiations requires increased and effective market access and entry opportunities for developing-country exports. It is imperative, the Consensus says, to ensure equity and fairness in the trading system and negotiations so as to address significant asymmetries in the size, capacity, resources and competitiveness of developed and developing countries. That would contribute towards an "open, rule-based, equitable and predictable and non-discriminatory multilateral trading system" and towards the Millennium Development Goals (MDGs).
Africa, LDCs to be considered next week
The Board will devote Monday 11 October and Tuesday 12 October to economic development in Africa: issues relating to Africa´s debt sustainability. Discussions will be based on UNCTAD´s latest report, Economic development in Africa. Debt sustainability: oasis or mirage? (UNCTAD/GDS/AFRICA/2004/1), released on 30 September. The report shows that despite recent initiatives to reduce Africa´s debt burden, particularly as part of the Heavily Indebted Poor Countries (HIPC) Initiative, African debt is still at unsustainable levels. And while there are no absolute measures of debt sustainability, the UNCTAD study proposes several new approaches (for background, see press release UNCTAD/PRESS/PR/2004/031 of 30 September).
Speaking at the Monday afternoon session will be Prof. Ernest Aryeetey of the University of Ghana; Ann Pettifor of the New Economics Foundation (UK); and Prof. Samuel Wangwe of the Economic and Social Research Foundation (Tanzania).
The Least Developed Countries Report 2004: Linking Trade and Poverty Reduction (UNCTAD/LDC/2004) serves as background for the Board´s review of progress in the implementation of the Programme of Action for the LDCs for the Decade 2001-2010. This report, published on 27 May, provides the first comprehensive analysis of the relationship between trade and poverty in the LDCs. It shows that the positive effects of world trade are evident in only a few LDCs, and that export growth is not sufficient for reducing poverty. For the first time, the report also looks at the impact of HIV/AIDS and armed conflict on LDC economies (for background, see press releases UNCTAD/PRESS/PR/2004/009, 010 and 011 of 27 May 2004).
J. Denis Bélisle, Executive Director of the International Trade Centre UNCTAD/WTO (ITC); Gyan Chandra Acharya, Ambassador of Nepal; and Prof A. Cornia of the University of Florence are scheduled to address the Board on this item Wednesday afternoon, 13 October.
Composition of the Bureau
Presiding over the 148-member Board at its 51st session is Mary Whelan (Ireland). The Vice-Presidents are: Yuri Afanassiev (Russian Federation), Luciano Barillaro (Italy), Doru Romulus Costea (Romania), Sarala M. Fernando (Sri Lanka), Kiminori Iwama (Japan), Melissa J. Kehoe (United States), Ernesto Martínez Gondra (Argentina), Jorge Ivan Mora Godoy (Cuba), Love Mtesa (Zambia) and Preeti Saran (India). Patrick Krappie (South Africa) is Rapporteur.
Sessional Committee I, which will consider implementation of the LDC programme of action, will be chaired by Mary Whelan (Ireland).
Ousmane Camara (Senegal) will chair Sessional Committee II, which will examine economic development in Africa.
