LEAST DEVELOPED COUNTRIES NEED SUBSTANTIAL FINANCIAL AND TECHNICAL ASSISTANCE TO OVERCOME MARKET MARGINALIZATION

Press Release
ECOSOC/5764

LEAST DEVELOPED COUNTRIES NEED SUBSTANTIAL FINANCIAL AND TECHNICAL ASSISTANCE TO OVERCOME MARKET MARGINALIZATION

Agreements made during the Uruguay Round of the General Agreement of Tariffs and Trade (GATT) had eased many trade barriers, but the interests of the least developed countries had been largely bypassed, the representative of Bangladesh told the Economic and Social Council this morning as it continued its ministerial-level debate on market access.

Speaking on behalf of the least developed countries, he said that many of the market access opportunities were of little practical benefit to the least developed countries. Tariffs still remained in major markets on the few important exportable items for many least developed countries, such as textiles, clothing and leather products. In order to overcome marginalization, those countries needed to be provided with substantially increased financial resources and technical assistance.

Trade-related technical and financial assistance should be made available to developing countries so they could take advantage of increased market access, said Denmark's Minister for Development Cooperation. Private investment in the least developed countries must be encouraged, as well as their participation in trade-policy review processes. The multilateral institutions had a special responsibility to strengthen the trade-related capacities of those countries.

Barriers to markets were considerably higher for goods with a low aggregate value and small technological content, Cuba's Minister for Economy and Planning told the Council. That practice particularly affected agricultural products, textiles, clothing, footwear and other items that constituted the main exportable goods of developing countries. Developed countries had also increasingly resisted the exports of developing countries by adopting anti-dumping measures, safeguarding actions, quota allocation and other restrictions.

Guyana's Minister for Trade, Tourism and Industry said smaller countries were often faced by the spectre of protectionism. For example, the European Union had established non-tariff barriers to the export of Caribbean bananas, by which each banana had to be of a certain shape and size. Clearly, it was

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difficult for those small countries to satisfy such rigid requirements. As a result, the Caribbean trade had suffered, as had those who depended on it for their livelihood.

Statements were also made by the representatives of Jordan, the former Yugoslav Republic of Macedonia, United States, Chile, Uruguay, Turkey, Argentina, Brazil, China, Mexico, Japan, Tunisia, India and Algeria.

The Council will meet again today at 3 p.m. to continue its high-level ministerial debate and to hold a panel discussion on the topic "Market access: prospective beyond the Uruguay Round".

Council Work Programme

The Economic and Social Council this morning began the second day of its four-week 1998 substantive session by continuing a ministerial-level debate on market access. During the debate, the Council would consider developments since the conclusion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) within the context of globalization and liberalization.

The Council had before it the World Economic and Social Survey 1998 (document E/1998/50) which depicts a large and volatile world economy with growing volumes of trade and financial flows. The Survey notes, however, that the Asian financial crisis of 1997 had plunged several of the world's fastest growing economies into severe recession, and had slowed growth of world output and trade. (For further background on the Survey, as well as general information on the session, see Press Release ECOSOC/5760, issued on 2 July.)

Also before the Council is a report prepared by the secretariats of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) on market access: developments since the Uruguay Round, implications, opportunities and challenges, in particular for the developing countries and the least developed among them, in the context of globalization and liberalization.

The report, transmitted to the Council in a note from the Secretary- General (document E/1998/55), states that tariffs and other traditional barriers to market access remain an issue in a wide range of sectors, many of which are of particular export interest to developing countries, including the least developed countries. The Uruguay Round resulted in significant improvements in the conditions and security of market access. Furthermore, since the establishment of the WTO in 1995, multilateral negotiations have been concluded that have greatly increased market access for information technology products, basic telecommunication services and financial services. Such liberalization in goods and services sectors demonstrates that the WTO provides a forum for continuous negotiation on market access improvements and for dispute settlement.

Yet, significant tariff barriers and high variances continue to affect a significant number of products, according to the report. That was true because certain countries participating in the Uruguay Round had offered only small tariff reductions, or none at all, for some sensitive products. Because the Uruguay Round negotiations, unlike some earlier negotiations, did not establish specific targets for tariff harmonization, there remains ample room for further multilateral trade liberalization. While WTO members are committed to new negotiations on agriculture and services by the year 2000, a decision would be required to extend those negotiations to other areas, such as industrial tariffs.

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Since the close of the Uruguay Round, the report states that many developing countries have reduced their tariffs, liberalized various import and exchange-rate restrictions and reduced the scope of State trading. Developing countries also have removed barriers to trade by concluding regional trade agreements. The freeing-up of trade by such agreements has been significant in Latin America and the Caribbean and in South-East Asia, and it is picking up in other subregions of Asia and Africa, particularly Eastern and Southern Africa. The reduction and elimination of customs duties have been the primary method of regional trade liberalization. Those market- opening efforts have focused on trade in goods, though some agreements have started to adopt programmes for the liberalization of trade in services.

Several new regional and cross-regional trade and investment liberalization initiatives are being developed that would provide impetus to the consolidation of existing agreements and revive progress where it has been moribund, the report says. Some such initiatives include the anticipated conclusion of the second round of negotiations under the Global System of Trade Preferences among Developing Countries (GSTP); trade liberalization activities of the Summit Level Group of Developing Countries (G-15); and a proposed economic community of Middle East and North African countries.

According to the report, the Generalized System of Preferences (GSP) remains a major instrument for further liberalizing market access of developing countries. Following the conclusion of the Uruguay Round, developed countries revised their GSP schemes. Major common features were a substantial extension of product coverage for all GSP recipients, as well as additional improvements in favour of the least developed countries. Yet, consecutive rounds of multilateral trade negotiations have gradually eroded GSP benefits, and they have been further reduced following the expansion of preferential trading arrangements among major trading partners. Preferential benefits also have been diminished as a result of most-favoured-nation tariff reductions and liberalization within regional trading arrangements.

Low average duties resulting from the Uruguay Round and GSP revisions have led to a widespread belief that tariffs no longer have a negative effect on the trade of developing countries, the report states. Yet, after all concessions are fully implemented, frequent tariff peaks and significant tariff escalation will continue to provide high import protection and affect crucial exports of developing countries. That protection is reinforced by numerous quantitative restrictions which continue to constrain textiles and clothing exports to major developed countries.

Duty-free most-favoured-nation treatment for many tropical products has been the most important result of the Uruguay Round for least developed countries, the report says. The revised GSP schemes also involve substantial additional advantages for least developed countries. Yet, market access problems for those countries have not disappeared. In spite of special GSP

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treatment, a number of significant tariffs will continue to apply to some of their most important export products in all major markets. Industrial imports from least developed countries are almost fully liberalized in the countries of the European Union and Japan. In the United States, a substantially larger number of products of the least developed countries now enjoy duty-free treatment, but their major and often only industrial exports –- textiles, clothing, footwear and leather products -– remain excluded from GSP and special least developed country provisions.

Statements

ANWARUL KARIM CHOWDHURY (Bangladesh), on behalf of the least developed countries, said that it was paradoxical that many market access opportunities offered to least developed countries were of little practical benefit to them. Their global share of trade remained below 0.4 per cent. Their trade expansion was sluggish and lagged far behind other developing countries. GSP exclusion and peak most-favoured-nation duties still remained on most textiles, clothing and leather products in major markets. Those articles were among the few important exportable items of many least developed countries.

There remained a major scope and urgent need for extension of GSP schemes to cover those areas in particular, he said. while the Uruguay Round had eased many trade barriers, it was soon found that the interests of the least developed countries had been bypassed. Much later, some limited and often time-bound opportunities had been extended to those countries in the form of special and differential treatments. In most cases, those treatments had proved to be grossly inadequate.

To overcome marginalization, least developed countries needed substantially increased financial resources and technical assistance, he continued. Assistance to those countries should be on preferential terms, and it should focus on building infrastructure, institutions and telecommunications networks, as well as human development. A number of substantive actions and special treatments were needed, including: full and effective implementation of the plan of action for the least developed countries adopted at the recent WTO Ministerial Conference in Singapore; provision of duty-free access to all products and removal of all quantitative import quotas for the least developed countries, as a group; elimination of tariff escalation on common duties of export importance; removal of textile import restrictions from least developed country exporters, whether they were members of the WTO or not; banning of product-specific restrictions against least developed country exports; and elimination of time-bound elements from preferential treatment.

POUL NIELSON, Minister for Development Cooperation of Denmark, said it was illusory to believe that formal market access alone would bring about the integration of developing countries into the global trading system. Access also depended on an improvement of the human and institutional capacities of

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those countries. Trade-related technical and financial assistance would have to be made available for developing countries to take advantage of increased market access. The multilateral institutions had a special responsibility to strengthen the trade-related capacities of the least developed countries. Private investment in those countries must be encouraged, as well as their participation in trade-policy review processes.

In addition to trade and investment, aid was an essential component of sustainable development, he said. Official development assistance (ODA) ensured flows to countries that had difficulties in mobilizing domestic resources or problems attracting foreign direct investment. The ODA funding helped finance developments in sectors not reached by private flows, such as health, education, capacity-building and good governance. ODA should be seen as a natural and necessary part of the process of globalization and a permanent feature in a world characterized by increased interdependence.

The international community must establish a system of governance which included responsibilities in the economic, ecological, social and political fields, he said. That system should also have the participation of governments, as well as the private sector.

JAWAD ANANI, Deputy Prime Minister of Jordan, said the question of market access was a main concern of the developing countries. Many felt that if they opened their markets to imported goods, they would suffer from a resulting lack of revenues and reduction in employment. The paradigm of globalization and liberalization was based on the principle that free international trade would strengthen capacities and lead to export-led growth. If developing countries did not gain market access, they would pay the price in increased unemployment and poverty.

Jordan supported openness in globalization and liberalization, he said. It promoted increased efficiency in local production and urged its corporations to observe relevant international standards. He called on the "Group of 77" developing countries to join the multilateral trading system in an efficient manner. Rich countries and the international organizations should help developing countries utilize opportunities for export and trade.

BORIS RIKALOVSKI, Minister of Economy of The former Yugoslav Republic of Macedonia, said barriers to foreign markets particularly affected countries with economies in transition. Due to the reduction of their former domestic markets, the only chance for development for those countries lay in their increased participation in external markets. A prevention of that process would lead directly to the marginalization of those countries and have negative implications for economic cooperation and overall international relations. Thus, the international community should pay special attention to eliminating barriers to free-market access. His Government hoped that the

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Council's current session could make a significant contribution in that regard.

The liberalization of external trade was essential for the economic development of his country, he said. His country's newly introduced customs duty system had been harmonized with the customs duty system of the European Union. His Government had also made efforts to contribute to the liberalization of the world economy by implementing the principles of free trade on the regional level. Closer cooperation at the regional level should contribute to the political stability of the region and to the "Europeanization" of the Balkans. Those processes could be further accelerated and strengthened by closer engagement by the relevant United Nations organs and bodies.

It has been more than two years since his Government presented its candidacy for membership in the WTO by submitting a memorandum for accession, he said. Regrettably, that memorandum had still not been circulated to WTO members and others concerned. The admission of the countries still not members of the WTO could be a powerful instrument for eliminating the marginalization of the fragile economies of developing countries and countries in transition. The harmonization and the stability of international economic relations depended on the successful economic and social development of the underdeveloped countries.

MICHAEL SHREE CHAN, Minister of Trade, Tourism and Industry of Guyana, said there was concern as to whether the proclaimed "opportunities" of globalization and liberalization were real and open to all and whether the so-called "challenges" were not a euphemism for the effective marginalization of small States. The United Nations Development Programme (UNDP) Human Development Report of 1997 revealed that over a quarter of the developing world's people still lived in poverty. Clearly, small countries such as his were yet to reap any dividends from rapid globalization. With a narrow export base and limited productive capacity, most small States found it extremely difficult to compete in the global market place. Foreign investment in the productive sectors was scarce, since multinational corporations preferred to direct their flows to larger countries with greater profitability. At the same time, ODA had been greatly reduced.

He said there was also the frightening likelihood of the loss of preferential access to important markets such as the European Union, because of drastic free-trade rules of the WTO. Smaller countries were often faced by the spectre of protectionism. Caribbean banana producers, for example, now faced what could only be described as non-tariff barriers to the export of the fruit to some markets in the European Union. For their bananas to qualify for acceptance, they must now be of a certain shape and size. Not surprisingly, it was difficult for those small countries to satisfy such rigid requirements. As a result, the Caribbean trade had suffered, and so too had those who depended on it for their livelihood.

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He said that, in the case of Guyana's timber exports, access to North American markets was threatened by declared environmental concerns over the preservation of tropical forests. Such prohibitive measures were difficult to understand since his country's forests were in a pristine state and were carefully managed with an eye to conservation. Developing countries should not be denied the rational economic use of their natural resources and should not be forced into the premature adoption of the rules of a globalized system.

JOSE LUIS RODRIGUEZ, Minister of Economy and Planning, and Vice- President of the Council of Ministers of Cuba, said while outcome of the Uruguay Round did lead to improved access to markets, the benefits had been mostly reaped by the developed countries, which showed no interest in fully implementing the agreements on areas sensitive for developing countries. Developed countries had increasingly resisted the exports of developing countries by adopting anti-dumping measures, safeguarding actions, quota allocation and other restrictions. Barriers to markets were considerably higher for goods with a low aggregate value and small technological content. That practice particularly affected agricultural products, textiles, clothing, footwear and other items that constituted the main exportable goods of developing countries.

The process of globalization had been expressed in the rise of direct investment flows, which could constitute a dynamizing or delaying element of world trade, he said. Yet, those flows were not equally distributed, nor did they always add new assets to production and services. The volatility of capital and its role in the process of growing financial speculation had led to the conclusion of a multilateral agreement on investments, which began in 1995 on the initiative of the United States. That agreement was intended to ensure greater deregulation of international financial flows. If such an agreement was adopted, it would limit the possibility for developing countries to use foreign investment, along with trade, as an instrument for development.

Cuba shared the difficulties of other developing countries in achieving access to markets and performing its foreign trade, he said. Yet, Cuba was also a blockaded country, which had been subjected to an unprecedented economic war waged by the United States for more than 37 years. Recently, an agreement had been negotiated between the United States and the European Union which sought to solve a dispute between both sides at Cuba's expense. That blockage had already cost Cuba more than $60 billion and brought inestimable hardships to its people. The blockade must be eliminated without conditions.

JOHN ROSENBAUM (United States) said, while trade expansion had become a universal objective of every country, there was no consensus on the acceptance of imports. Unrestricted trade between States was enshrined in the Constitution of the United States.

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In some countries, people shunned imports because they were viewed as inferior and tainted, he said. That reaction was often propagated and stimulated by governments, culture and tradition. A study of tariff levels and non-tariff barriers gave an incomplete account of the factors at play in the world market place. For the least developed countries, an enabling environment was necessary, as was those countries' ability to supply products that satisfied the criteria of foreign buyers. The United States had a good record in the area of liberal market access, and duties on many products were either non-existent or so low that they did not affect quotas.

He said that in almost all cases the United States market was accessible. However, it had the most competitive market in the world, with price quality and delivery time the determinants. For developing countries, it was not just a problem of market access, but of exploiting that access properly. In 1997, the United States had a $100 million goods deficit with developing countries. American people who represented 4 per cent of the world consumers were buying 20 per cent of the exports of developing countries. In short, the vibrant United States economy was providing jobs at home and around the globe. While supporting market access, that alone was not enough to assist developing countries. They also had to find markets for their products.

He said that ensuring market access for least developed countries required the participation and assistance of all countries. While the time had passed when only a few countries could be viewed as being responsible for that effort, the GSP was largely dominated by a few countries. What needed to be ensured was a spill-over effect for least developed countries. The United States Congress was currently considering a measure on African growth and opportunity which would provide duty-free status for certain products from African countries and establish a number of non-market access tools, such as support for trade capacity-building. The economies of sub-Saharan Africa were fragile and weak and remained at risk. For economic ventures to work, violence in those nations had to be removed, as there was little point in improving market access to countries that were consumed by violence.

MARIANO FERNANDEZ, Under-Secretary for Foreign Affairs of Chile, said it was important to ensure that trade negotiations become increasingly more equitable. It was also vital that balanced trade affected workers, producers and consumers equally in all parts of the globe. All types of barriers to trade, including international anti-competitive practices, should be ended. That should lead to better regional distribution of the benefits of globalization. The continued expansion of trade was a fundamental source of employment, economic development and technological progress.

In recent years, Chile had made progress in opening its markets and in seeking to improve access for its exports, he said. That had been achieved on the multilateral level, through reduction and consolidation of its tariffs,

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and on the bilateral and regional level, through the negotiation of free-trade agreements with individual countries and trading groups. During the Second Summit of the Americas, held in Santiago in April, a negotiation process was initiated to establish a free-trade zone that extended from Alaska to Cape Horn. Chile was also promoting agreements with the European Union that included free trade as an essential component.

Future negotiations within the WTO should promote an intensification of the process of tariff reduction and consolidation, he said. Special attention should be paid to avoiding the establishment of tariff blocks and peak tariffs which blocked the expansion of internationally competitive industrial activities in developing countries.

New negotiations should remedy the defects and distortions that existed in world agricultural trade, resulting from excessive support programmes and growing export subsidies, he said. If the aim was to maintain and develop rural life by halting mass migration to the cities, it was better to support farmers directly. Countries should not subsidize products which created distortions in trade, as that would impair the comparative or competitive advantages each economy exhibited.

JOSE MARIA ARANEO, Under-Secretary for International Economic Affairs of Uruguay, said recent macroeconomic adjustments in Latin America had been necessary for the continent to fit into a globalized economic world. The continent was now committed to a number of subregional economic processes designed to build an economically strong Latin America. Those adjustments had also made it possible for the countries to better manage foreign indebtedness, reduce inflation and increase growth of gross domestic product (GDP). The countries of the Southern Common Market (MERCOSUR) (Argentina, Brazil, Paraguay and Uruguay) had also made tremendous efforts to achieve a stable macroeconomic environment which supported a doubling of imports and exports in that market. Adjustment policies and the opening of the Uruguay economy had led to economic growth without neglecting the functions of the State and the needs of the social sector.

He said the most crucial achievement of the Uruguay Round of GATT had been the progress made in areas that had been marked by a lack of international consensus, an absence of standards, and which had repeatedly provoked disputes and threatened to dismantle the multilateral trading system. His Government was committed to further strengthening the multilateral trading system in any way that it could. Uruguay was convinced that agreement on priority topics identified by the WTO would be the key to achieving fair access to markets.

Uruguay reaffirmed the need for agricultural negotiations in 1999, he said. Agriculture was the main source of economic activity in Uruguay. The international community must achieve a meaningful reduction of tariffs, particularly tariff peaks. Internal support measures that distorted

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protection and trade must be eliminated, including exports subsidies, whether for agricultural or industrial products. That was one of the challenges before the international community, if it truly wanted to create a fair and competitive world economy.

AVNI OZCAN, Director-General of the Under-Secretariat for Foreign Trade of Turkey, said that in this new era, the free-market economy had become virtually accepted, while globalization and liberalization had gained strength. Although some barriers still existed, Turkey hoped that those difficulties would be overcome and that developing countries would face a more secure and broad-based trade liberalization process. Turkey fully supported the establishment of a liberal, international trading system, based on the principles of free competition, non-discrimination and the elimination of barriers. Such a system would contribute to the improvement of global welfare. Due consideration should also be given to the special needs of the least developed countries, which had faced difficulties in implementing the outcomes of the Uruguay Round.

Turkey believed that the prevention of the marginalization of the developing and least developed countries was vital. He said Turkey had already put into effect an autonomous preferential tariff regime for a comprehensive list of products imported from the least developed countries. Trading opportunities granted to those countries should include technical, assistance and capacity-building programmes.

FERNANDO MAURETTE, President of the Foreign Relations Committee of the Parliament of Argentina, said the reduction of tariffs and subsidies had led to better competitiveness, greater efficiency and benefits for consumers. Another gain had been a greater dynamism in the area of trade for developing countries. Yet, there still existed several negative aspects, including certain tensions that had been attributed to trade liberalization. The international community must find solutions to problems which remained. Trade liberalization was not an end in itself, but an element in an integrated global economic policy intended to bring about better living conditions for all.

There were still many products affected by high protective tariffs, he said. Those tariffs had a particular effect on the exports of developing countries, including, among others, clothing, shoes, food and automobiles. Those higher tariffs forced developing countries to concentrate on exporting raw materials. In addition, many developed countries had adopted protectionist measures under the guise of safeguards for "sensitive products". Protective tariffs often affected the most dynamic sectors in which developing countries had comparative advantage, including oils, meat, grains, sugar, coffee, cocoa, tea, fruit and fish.

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Trade liberalization required a balanced package of national policies which included the social, trade, investment and environmental sectors, he said. The process of accession to the WTO should proceed as quickly as possible so that the membership of the organization could become truly universal. The negotiations on agriculture should start on time and conclude rapidly. The members of the WTO should pledge to improve the coherence and formulation of economic policy at the international level in order to maximize the contribution of an open-trading system to the economies of all countries at all levels of development.

CELSO AMORIM (Brazil) said trade was a major engine of growth and development. The World Economic and Social Survey 1998 indicated that the volume of world trade had grown an estimated 9 per cent in 1997 and was expected to grow by another 7 per cent this year. Those aggregate numbers concealed a very uneven distribution of benefits. While developing countries had the most dramatic increases in the volumes of exports, the industrialized countries had benefited the most from the increase in world trade. Last May in Geneva, ministers had recognized the need to respond to the particular trade interests and developmental needs of the developing countries. They had stressed the urgent need to address the marginalization of those States.

He said full implementation of the Uruguay Round commitments remained paramount for the developing countries. Persistent protectionist measures in the administration of tariff quotas made it virtually impossible for exporting developing countries to full benefit from them. Much remained to be done to liberalize agricultural trade and bring it fully into the realm of the rules of fair competition. That was also true for many industrial products of export interest for developing countries.

A recent survey of the main barriers faced by Brazilian exports revealed that in the United States alone they ranged from high tariffs and tariff quotas to peak tariffs, anti-dumping measures, countervailing duties, and import license procedures, he said. The idea of a free trade area in the Americas would only make sense if such an arsenal could be dismantled.

QIN HUASUN (China) said there was an increasing need to establish an equitable, rule-based and non-discriminatory international trading system. While the Uruguay Round had provided opportunities for greater participation by the developing countries in international trade, developed countries reaped most of the benefits. The needs and interests of the developing countries had not been fully accommodated, and those of the least developed countries had been largely ignored. In addition, the implementation of the Uruguay Round agreements related to market access had encountered a series of problems.

Developed countries had not loosened their grip on multilateral policy- making, he said. Those countries arbitrarily expanded the scope of WTO coordination to include questions extraneous to market access in the

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multilateral trading system. Developing countries were still facing many obstacles in market access. Tariff peaks and tariff escalation in some sectors in the developed markets were seriously hampering the exports from developing countries. The admission of new members into the WTO had been delayed by political considerations. Some members had relied on the accession negotiations as the most convenient venue for resolving bilateral trade problems, thereby prolonging the process of accession negotiations.

Regarding market access, he said the respect should be given to the economic development goals of developing countries and the need for gradual opening of their markets. Developed countries should not insist on market liberalization without first taking full consideration of the level and stage of development of developing countries. Developed countries also must honour their commitments to improve market access for developing countries and eliminate tariff peaks.

The WTO should concentrate its efforts on the implementation of the Uruguay Round agreements instead of diverting its attention to new issues that had little to do with market access, he said. Developing countries must strengthen their coordination and enhance their capacity for participating in the multilateral trading system. Those countries should also enhance coordination among themselves in the formulation of strategies to defend their legitimate rights. In addition, they should pursue their interests in order to gain the maximum benefits during the next round of multilateral trade negotiations.

ALEJANDRO DE LA PEÑA (Mexico) said the external sector had become the prime engine of growth and employment in his country. In 1997, Mexico's exports totalled some $110 billion. That represented almost one third of its external debt. Outside of the United States and Canada, Mexico had also established free-trade agreements with Chile, Colombia, Venezuela, Costa Rica, Bolivia and Nicaragua. It was presently negotiating free-trade agreements with Guatemala, El Salvador, Honduras, Panama, Ecuador, Peru, Belize, Trinidad and Tobago, the European Union and Israel. Such initiatives would situate Mexico in a global free-trade position at the beginning of the next century.

Important for developing countries was the development of rules for negotiation appropriate for them in their talks with the WTO. The choice today was between sectoral negotiation or package negotiation. Mexico felt that sectoral negotiation would not promote the interests of all the developing countries or those of the multilateral system. It would create lopsidedness in the market, attracting the larger markets and excluding the smaller products of smaller producers.

MASAKI KONISHI (Japan) said his Government was aware that its economic recovery would have an essential bearing on the economic stability of other Asian countries, and the world economy as a whole. Therefore, on 24 April,

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Japan had announced an unprecedented economic stimulus programme to which it was allocating more than $124 billion. In order to stabilize its financial system and restore confidence, his Government was working to dispose of bad assets. Japan was determined to stimulate domestic demand and promote its economic recovery, which hopefully would have a positive influence on Asian countries.

Global economic prosperity should continue to be pursued so that all countries fully benefited from the free-trading system, he said. To that end, developing countries should diversify their products and enhance their competitiveness, and developed countries should assist them by opening their markets. Japan believed that trade and market access were of great importance in securing financial flows for the economic growth of developing countries.

Development should include ODA and foreign direct investment, he said. In addition, emphasis should be placed on socio-economic infrastructure, telecommunications, transportation systems and human capacity-building. Developing countries should strengthen their participation in the free-trade system through ownership of the development process.

Regarding capacity-building in the context of trade, he said countries should concentrate on two separate aspects. The first was the capacity to produce what the market demanded. The other was the capacity to sell products. The former entailed going into production only after collecting information regarding the desires of consumers. The needs of developing countries in that area are often similar, and South-South cooperation could be quite successful.

Enhancing the capacity to sell required the establishment of the necessary infrastructure for transportation and speedy customs procedures, he said. Japan was undertaking a number of human development and institution- building projects that should enhance the trade of developing countries and promote their access to markets, including training courses on trade promotion and seminars on trade and investment.

ALI HACHANI (Tunisia) said problems facing developing countries and the interdependence of the world economy made international cooperation particularly important. Globalization had led to the speeding up of macroeconomic decision-making, as measures adopted by countries domestically became of decisive importance to the rest of the world. It was important to better channel financial flows so international financial institutions could have an accurate picture of possible financial crises that could prove a threat to the world economy.

The liberalization of developing countries had proven to be catalysts in increasing the volume of international trade, he said. The international

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community should promote an open, reliable and transparent multilateral trading system that would benefit all countries.

There should be appropriate follow-up steps designed to ensure that the rights and interests of all countries were respected and taken into account in new multilateral trade negotiations, he said. Environmental policies should not be a means to carry out disguised forms of protectionism. Social concerns, including international labour standards, should also not be exploited for protectionist purposes. Developed countries should respond favourably to request for technical assistance that was required to diversify the export capabilities of developing countries.

KAMALESH SHARMA (India) said that, while trade was a major engine of growth, aspects influencing developing countries' use of resources to generate trade remained distorted. It would be premature to say that the Uruguay Round had resulted in significant improvement in market access. More remained to be done. Liberalization of markets had been selectively applied to products and capital markets, to the exclusion of markets for unskilled labour. Similarly, little attention had been paid to market access for professionals.

He said another major area of concern was tariff escalation which locked developing countries into volatile primary commodity export markets, where real prices were declining. India was fully committed to a transparent rule- based, predictable and equitable multilateral trading system.

ABDALLAH BAALI (Algeria) said WTO agreements had set forth specific provisions that allowed for special and deferential treatment for developing countries. Through the Uruguay Round, the developing countries had also succeeded in bringing about a considerable improvement in opportunities for accessing markets for their exports. Market access was a key factor in the successful integrating of those countries into the multilateral trading system. Yet, as was documented in the joint report by the WTO and UNCTAD, there were still serious hurdles for developing countries. Those included tariff barriers which continued to affect a large number of goods and non- tariff barrier which hampered the exports of developing countries. The least developed countries and countries in Africa were most vulnerable to those protectionist measures.

The export capacity of the least developed countries should be further strengthened and their possibilities for market access broadened, he said. The international community should work to make it possible for those countries to play a more active and diversified role in international trade. All obstacles to market access needed to be removed before the countries of the South played a larger and more appropriate role in world trade. Partners of the South must honour the commitments they undertook during the Uruguay Round, and the WTO should speed up the accession process. Attention should be

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paid to implementation of special and differentiated agreements in favour of the developing countries.

The international community should guarantee the opening of markets and the removal of protectionist policies, he said. Countries should remove high tariffs and non-tariff barriers that hampered international trade. The system of preferences and technical cooperation for developing countries should be strengthened, so those countries could achieve a genuine partnership in international trade. In addition, the international community should address, in a sustainable manner, the poor distribution of capital investment flows.

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