For use of information media - Not an official record

Geneva, Switzerland, 18 October 1999

At yesterday’s close of a four-day meeting, UNCTAD’s intergovernmental trade body unanimously adopted a series of recommendations aimed at enhancing the position of developing countries in commodity and services trade.

Sixty-seven countries from all regions participated in the session of the Commission on Trade in Goods and Services, and Commodities - the last Commission session before UNCTAD X (see also TAD/INF/2827). The meeting was chaired by Ambassador Federico Cuello of the Dominican Republic.

The Commission attributed the decline in the share of developing countries in agricultural commodities, in part, to agricultural production, processing and export support policies in developed countries. The agreed text (TD/B/COM.1/L.11) says that "trade negotiations on agriculture should address issues of interest to developing countries". The international community should improve "market access conditions for agricultural products of export interest to LDCs on as broad and liberal a basis as possible".

Furthermore, there was agreement that "the existing mechanisms for helping to stabilize commodity export earnings should be improved so as to respond to the real concerns of developing-country producers", particularly making use of new financial instruments for price risk management.

In this respect the Commission recognized that UNCTAD’s work to promote market transparency and price risk management needs to be strengthened. It also recommended that the Common Fund for Commodities, as a major financier of commodity development activities, should continue to support research and development for promoting diversification, improvement of productivity and competitiveness.

The withdrawal of Governments from commodity marketing has in many countries led to a disruption in the supply of basic services to farmers. To overcome this problem, the international community should, according to the UNCTAD Commission, assist Governments in "identifying and promoting new models under which the private sector can provide such services".

At the national level, governments should orient commodity trade policies towards establishing a fair and market-oriented agricultural trading system. Policies should be more consistent with the development objectives of developing countries.

The Commission also underlined the need for the competitive position of these countries to be improved so that they can achieve diversification and broader-based economic development. It recommended that in order to strengthen their supply capacities and competitiveness developing countries consider cooperative arrangements among their enterprises; business-oriented domestic institutions could fill the void created by the abolition of traditional marketing boards. Governments need to accept also a greater role for the private sector in the provision of the physical and administrative infrastructure for trade, which is inadequate in many developing countries.

In light of the penetration by international trade houses and other transnational companies into procurement and distribution activities in developing countries’ domestic commodity markets, local farmers, processors and traders need to be able to participate equitably in these markets. For example, their access to essential services such as credit, can be improved.

Turning to services, including the development implications of electronic commerce, the Commission said that developing countries should be provided "with meaningful commercial opportunities in sectors and modes of supply of interest to them". Another invitation to the international community was to "support the development of appropriate telecommunications infrastructure, interconnectivity, interoperability and access to information technology in developing countries to allow them to benefit from opportunities offered by electronic commerce".

In line with the General Agreement on Trade in Services (GATS), developing countries should be given the flexibility to open up fewer sectors and liberalize fewer types of transactions, progressively extending market access in line with their stage of development.

"Anti-competitive conduct that is adversely affecting services exports of developing countries", should be disciplined, said the Commission. It went on to state that "establishing disciplines on subsidies and investment incentives, including at sub-national levels, that adversely affect trade in services", should be considered. In this regard, the UNCTAD secretariat should be helped to improve the provision of services statistics to meet the needs of policy makers and trade negotiators for the next round of GATS negotiations.

Governments could, meanwhile, "undertake regulatory reform required to ensure a coherent, procompetitive regulatory framework". They could also "help small and medium-sized enterprises to access new technologies, management techniques and financial resources" and "support service exporters by strengthening their national service industry associations".