TRADE PROTECTIONISM DISGUISED AS ENVIRONMENTAL AND LABOUR LAW SHOULD BE ELIMINATED, SECOND COMMITTEE TOLD

Press Release
GA/EF/2841

TRADE PROTECTIONISM DISGUISED AS ENVIRONMENTAL AND LABOUR LAW SHOULD BE ELIMINATED, SECOND COMMITTEE TOLD

Trade protectionism disguised as environmental and labour laws should be eliminated by industrialized countries, the Second Committee (Economic and Financial) was told this morning, as it considered macroeconomic policy questions.

The elimination of trade-distorting policies, protectionist practices and non-tariff barriers, in the guise of environmental, technical and labour standards, remained urgent, said the representative of Bangladesh. Products of least developed countries very often faced problems of access in the industrial markets due to those policies. Close cooperation among the United Nations, the World Trade Organization (WTO) and the Bretton Woods institutions remained an imperative in that regard.

There was an excessive array of trade tariffs, quotas and unilateral measures that were intended to safeguard markets and limit free trade, said the representative of Brazil, on behalf of the Southern Common Market (MERCOSUR). Many countries invoked environmental protection and labour rights as a pretext to control and limit trade. Access to markets and the reductions of subsidies must have priority for future deliberations and decisions of the WTO.

Speaking on the topic of globalization, the representative of Indonesia, on behalf of the "Group of 77" developing countries and China, said the phenomenon had triggered a range of opportunities for development and advanced economies had already reaped significant benefits. However, globalization also exposed developing countries to new and enormous risks, making them much more vulnerable to certain external factors that were beyond their control.

Preferential access on its own was unlikely to achieve the effective integration of least developed countries into the world trading system, said the representative of the European Union. In order to ensure that development was sustainable and contributed to human, social and economic development, export expansion should not come at the expense of social and environmental protection.

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On the global financial crisis, the representative of Thailand, on behalf of the Association of South-East Asian Nations (ASEAN), said one country could not act alone in responding to it. National recovery measures must be complemented by appropriate regional and global policies. Globally, the crisis called for a review of the international financial architecture. Without such comprehensive, parallel efforts, a durable solution to the crisis would be difficult to obtain.

Statements were also made by the representatives of the United States, Cuba, Russian Federation, China, Australia, Nigeria, Republic of Korea, Kazakhstan, Belarus and Pakistan.

The Committee will meet again at 3 p.m. today to continue its discussion of macroeconomic policy questions. They would also take up sustainable development and international economic cooperation.

Committee Work Programme

The Second Committee (Economic and Financial) met this morning to consider macroeconomic policy questions. Under that heading, it would discuss trade and development. (For background information see Press Release GA/EF/2840 of 29 October.)

Draft Resolutions

The Committee will hear the introduction of a draft resolution on the report of the Governing Council of the United Nations Environment Programme (A/C.2/53/L.21). The draft was sponsored by: Indonesia, on behalf of the "Group of 77" developing States and China.

By that text, the General Assembly would encourage the United Nations Environment Programme (UNEP) to further strengthen its revitalized role as an important implementing agency of the Global Environment Facility. It would also welcome, in particular, the collaboration with the Global Environment Facility on freshwater resources, such as global international waters assessment, and on activities aiming at combating land degradation as they related to the focal areas of the Facility.

The Assembly would also welcome the efforts made by the Executive Director of UNEP in streamlining the organization in Nairobi. It would stress the importance of adequate, stable and predictable financial resources as an essential prerequisite to enable UNEP to discharge its strengthened mandate. The Assembly would also call upon Governments to make contributions in order to allow for the full implementation of the programmes of the UNEP.

Also by the text, the Assembly would encourage the Executive Director of UNEP to intensify his efforts to mobilize additional resources from other donor sources, as appropriate.

The Committee will also hear the introduction of a draft resolution on the permanent sovereignty of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources (A/C.2/53/L.22). The draft was sponsored by: Afghanistan, Algeria, Bangladesh, Cuba, Djibouti, Egypt, Jordan, Malaysia, Mauritania, Qatar, Saudi Arabia, Sudan, United Arab Emirates, Yemen, Palestine, Indonesia, and Brunei Darussalam.

By that text, the General Assembly would call upon Israel, the occupying power, not to exploit, to cause loss or depletion of, or to endanger, the natural resources in the occupied Palestinian territory, including Jerusalem, and in the occupied Syrian Golan.

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The Assembly would recognize the right of the Palestinian people to claim restitution as a result of any exploitation, loss or depletion of, or danger to, their natural resources. The Assembly would also express the hope that that issue would be dealt with in the framework of the final status negotiation between the Palestinian and Israeli sides.

Introduction of Draft Resolutions

ADAM ADAWA (Kenya) introduced the draft resolution on the report of the Governing Council of the United Nations Environment Programme (A/C.2/53/L.21).

MAGED ABDELAZIZ (Egypt) introduced the draft resolution on the permanent sovereignty of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources (A/C.2/53/L.22).

SAODAH B. A. SYAHRUDDIN (Indonesia) on behalf of the Group of 77 developing countries and China said that over the past decades, the international community had witnessed the fundamental impact of globalization on the entire spectrum of global economic activities, with far-reaching consequences around the world. The phenomenon, on the one hand, triggered a whole range of opportunities for development and indeed, many countries, particularly the advanced economies, had already reaped significant benefits of those opportunities for development. On the other hand, it has also exposed developing countries to new and enormous risks: globalization and liberalization had made the developing economies much more vulnerable to certain external factors beyond their control.

While firmly committed to the multilateral trading system and fully supportive of the aim to make the system universal, the developing countries also recognized the crucial role played by regional trading arrangements. It was the Group's considered opinion that the two were not mutually exclusive, and should be complementary to each other. In fact, regional trading arrangements should represent constructive building blocks for a solid multilateral trading system. The multilateral trading system could also learn from the positive experiences gained by regional trading arrangements.

J. CUNNANE, speaking for the European Union, said that his group considered the integration of developing countries into the world trading system to be a primary objective of its development policies. As one means of achieving that objective, it granted preferential access to its market to all developing countries for almost all their exports.

He said that the European Union called on its developed partners and more advanced developing countries to open the markets to the exports of least developed countries in a comparable way. But preferential access alone was unlikely to achieve the effective integration of least developed countries

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into the world trading system. In order to ensure that development was sustainable, and contributed to human and social, as well as economic development, export expansion must not be at the expense of social and environmental protection.

ENIO CORDEIRO (Brazil) on behalf of Southern Common Market (MERCOSUR), said financial instability and volatility posed a serious threat to the international trading system. Trade arrangements and laws should be applied to all countries equally and fairly. There was an excessive array of trade tariffs, quotas, and unilateral measures that were intended to safeguard markets and limit free trade. Many countries invoked environmental protection and labour rights as a pretext to control and limit trade. The world had made rapid strides on some trade issues; however, little progress had been made to help developing countries in their trade in textiles and agricultural products. The countries of MERCOSUR were ready to compete in the global market on equal terms, but it could not compete with the power of treasuries in the United States, Japan and the European Union. Access to markets and the reductions of subsidies must have priority for future deliberations and decisions of the World Trade Organization (WTO).

ANWARUL KARIM CHOWDHURY (Bangladesh) said the multilateral trading system which had evolved over the last 50 years had greatly contributed to growth, employment and stability by promoting the liberalization and expansion of trade and by institutionalizing the framework for the conduct of international trade relations. The importance of an open, rule-based, equitable, secure and non-discriminatory, transparent and predictable, multilateral trading system could, therefore, not be overemphasized.

He said that the elimination of trade-distorting policies, protectionist practices and non-tariff barriers in the guise of environmental, technical and labour standards, remained imperative, as the products of least developed countries very often faced problems of access in the industrial markets. Close cooperation among the United Nations, the WTO and Bretton Woods institutions remained an imperative.

DEBORAH LINDE (United States) said the goal of economic development was to improve people's lives, and the least developed economies must not be left to fend for themselves in the emerging global economy. Her country had recognized that open domestic markets and an open global trading system did a better job than trade protection and isolationism in promoting broad-based economic growth and prosperity. Through its efforts to liberalize global trade and investment, the United States sought to put those ideas into action. Experience showed that many developing countries were unable to take advantage of existing market access opportunities in the Organisation for Economic Cooperation and Development (OECD) countries. That was not due to trade barriers or delays in WTO accession, but to domestic policies in the developing countries that stifled competition and discouraged foreign

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investment. The United States, committed to helping the least developed countries take advantage of trading opportunities, last year added 1,743 tariff lines to its general system of preferences programme, solely for the least developed countries.

The United States had urged the United Nations Conference on Trade and Development (UNCTAD) to continue providing technical assistance and analysis to enable developing countries, especially least developed countries, to build the capacities needed to enhance their trading opportunities, she said. It was encouraged by UNCTAD's commitment to reform and called for it to consolidate the reform process outlined in 1996. The mandate was clear and played an invaluable role. The UNCTAD must not be encouraged to dilute its comparative advantage by straying into the fields represented by the Bretton Woods institutions and WTO. With continued implementation of its reforms, UNCTAD would continue to play a crucial role in United Nations trade and development efforts.

RAFAEL DAUSA CESPEDES (Cuba) said the global financial crisis had demonstrated the ties that linked the world financial community. The role of UNCTAD in that context had become increasingly more relevant. Its work had been important in reacting to the new realities. It had put behind it the days when it was seen only as a tool of WTO. There was a need for new decisions, not only in trade, but also in the field of finance. The UNCTAD should reassert its role as a negotiating body and a place for building consensus. The United Nations should increase its role in the area of trade and development and ensure that the momentum achieved so far was retained.

He said that an objective analysis of current conditions regarding market access must include discussion of the processes of globalization. Together with the new challenges of globalization came problems, such as external debt, unequal trade, and the widening gap in technology. Those things made the situation of developing countries more complex than in the past. It was paradoxical that while developing countries had been asked to step up liberalized trade measures, there had been an increase in protectionism by developed countries. There had also been an unprecedented increase in unilateral measures meant to limit or freeze trade by developed countries against developing ones. The United States, for example, had adopted more than 40 laws to limit or freeze trade against 75 countries.

NIKOLAI V. TCHOULKOV (Russian Federation) said the time was ripe for prompt adoption of concerted measures, which could make it easier for countries in a critical situation to gain better access to markets and financial resources. In that regard, his country supported the need to tighten international surveillance over the use of discriminatory trade remedies, particularly anti-dumping ones, and to grant a more favourable trade regime to the nations suffering from the international financial crisis.

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He said an extremely important problem for many countries, including the Russian Federation, was accession to WTO. He asked how the international community could speak of universality for the multilateral trading system when 32 countries, who had negotiated their accession to WTO for many years, did not have access to world markets guaranteed by international rules. The negotiating process was too sluggish, not only because the scope and complexity of negotiations had expanded significantly when WTO replaced the General Agreement on Tariffs and Trade, but also because the leading trade powers demanded too much of the countries seeking accession, compared to the obligations of current WTO members. Furthermore, the Russian Federation expected that the next round of multilateral trade negotiations would be open for participation to all countries concerned, irrespective of how far they had moved towards WTO membership. That would give them a timely opportunity to bring their economy and national trade practices in line with those regulating norms and obligations, which would be agreed on during the round.

ASDA JAYANAMA (Thailand), on behalf of the Association of South-East Asian Nations (ASEAN), said it was important to ensure that all countries were able to benefit fully from the opportunities offered by trade liberalization, so as to enable them to sustain the momentum of liberalization. In that context, ASEAN supported the continued efforts of UNCTAD and the WTO to assist developing countries in their preparations for ongoing and future trade negotiations.

He added that the pervasiveness of the global financial crisis had certainly reflected the interdependence of the global economy. It was clear that one country could not act alone in its response to the crisis. National recovery measures must be complemented by appropriate regional and global policies. In South-East Asia, the crisis also called for closer cooperation and coordination among ASEAN countries. Globally, the crisis called for a review of the international financial architecture. Without such comprehensive parallel efforts, a durable solution to the crisis would be difficult to obtain.

SHAOFU YUAN (China) said that to put globalization and liberalization back on the right track, and to ensure the participation of all countries in that process, the following points had to be stressed. First, concepts needed to be renewed. Every country had the right to choose its own way of participating in globalization. Second, approaches needed to be selected. Liberalization in any sector had to take into account the specific conditions, level of development and sustaining capacity of the country concerned. Third, obstacles had to be cleared. The developed countries had to fulfil their Uruguay Round tariff commitments by eliminating all tariff and non-tariff barriers, in order to provide greater market access for developing countries' products, such as textiles.

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Measured against its new objective, UNCTAD still had a long way to go, he said. Among the steps it had to take were facilitating the establishment of an equitable, secure, non-discriminatory and predictable multilateral trading system, and a sound and effective international financial system, through close cooperation with WTO, the International Monetary Fund (IMF) and the World Bank. Also, it had to help developing countries enhance their ability to defend their interests in multilateral trade negotiations and avoid external risks brought about by globalization. Regarding China's accession to WTO, he hoped all parties concerned would take a responsible approach. Since China was a developing country, no conditions beyond the commitments of WTO's developing members should be imposed on it. The international community had to be aware that without China's participation, as the world's tenth largest trade nation, and that of some other developing countries, the WTO had no representation and universality to speak of, and would not be able to play its due role in the process of globalization.

JOHN CRIGHTON (Australia), on behalf of the Cairns Group of Agriculture Exporting Countries, comprising Argentina, Australia, Brazil, Canada, Chile, Colombia, Fiji, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay, said that his Group was united in its resolve to ensure that the next WTO agriculture negotiations achieved fundamental reform, which would place trade in agricultural goods on the same basis as trade in other goods.

Many countries were concerned that the outcome of the Uruguay Round of tariff negotiations had underlined that considerable further liberalization was still required to remove the distortions and restrictions which plagued trade in agriculture. He also said that the Cairns Group strongly believed that there was no justification for maintaining export subsidies. There must be clear rules to prevent all forms of circumvention of export subsidy commitments.

CHARLES NDIOMU (Nigeria) said the efforts of UNCTAD, the WTO, the World Bank and the IMF were unlikely to reverse the declining exports and the economic growth of developing countries without dramatically increasing official development assistance (ODA) from the Organisation for Economic Cooperation and Development (OECD) countries to meet the agreed target of 0.7 per cent of gross national product (GNP). Concerted action to cancel a substantial part of the debts of developing countries was also needed in order to energize their economic growth and sustainable development.

He said it was crucial that UNCTAD broaden regional coverage of its work on globalization and development strategies to improve and strengthen the level of developing country exports. It should work with WTO to ensure implementation of special and differential provisions in favour of developing countries, as provided by the Uruguay Round agreements.

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HYE-RAN YOO (Republic of Korea) said the international community, as well as UNCTAD and the WTO, should assist developing countries to fully participate in the multilateral trading system. That system had made a significant contribution to world prosperity by promoting free trade and open markets. Much improvement had been made in the area of trade regulations and intellectual property rights; however, the United Nations should ensure that momentum continued. It was essential that the multilateral trading system addressed the challenges faced by developing countries. The continual marginalization of the least developed countries also required greater attention by the international community. Technical assistance should be provided to those countries to build their capacity for development. Her country planned to grant further aid to least developed countries in that regard, and it would host a forum on Asian-African cooperation in December. That forum would support capacity-building measures in Africa and Asia.

AKMARAL KH. ARYSTANBEKOVA (Kazakhstan) said that the emerging trade pattern in Central Asia had been characterized by the change in direction of trade and the range of goods. As a result, new markets outside the Commonwealth of Independent States (CIS) area were becoming important destinations for Central Asian foreign trade. Currently, however, trade through or to Central Asia was hampered by prohibitive transport costs. In many cases, those represented up to 60 per cent of the value of manufactured imports. Central Asia and its trading partners, therefore, had a strong incentive to improve the efficiency of the main transit routes which not only linked Central Asia with the world, but also facilitated transport between Asia and Europe.

She said that there was a vital need to expand and intensify cooperation between the States of the region and the United Nations and its specialized agencies in shaping the transit environment in the Central Asia region. Kazakhstan was planning to submit, for consideration by the Second Committee, a draft resolution on the transit environment in landlocked states in Central Asia and their transit developing neighbours, on behalf of a number of co-sponsors.

ULADZIMIR GERUS (Belarus) said favourable conditions for trade were one the key factors in the economic growth of developing States and the prosperity of the world economy. The efforts to improve multilateral trade had improved access to markets and the reduction of non-tariff trade restrictions. The present system of international trade, however, was far from perfect. It required further measures by the world community with a coordinating role played by the WTO. The use of protectionist measures towards export goods of developing countries under the pretext of environmental regulations continued to hamper trade. While accession to WTO was being sought by many countries, it was a lengthy and complex process that required an abundance of material and intellectual resources. Help was needed by those countries to aid in

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their accession efforts. Accession to WTO of the greatest possible number of countries was necessary.

AHMAD KAMAL (Pakistan) said that gains from trade liberalization had been disproportionately asymmetrical. The anticipated benefits from the Uruguay Round agreements did not appear to have materialized for most of the developing countries. The Uruguay Round offered little by the way of market access for products in which Africa had a comparative advantage. In fact, sub-Saharan Africa was a net loser as a result of the Uruguay Round. The areas of special interest for developing countries, such as textiles or agriculture, were being liberalized at a slower pace than other areas.

There was also a need to stem the tide of the new protectionism in the developed world, he said. The last two decades had seen a rise in the use of new measures to block imports from the developing countries. From an equity standpoint, it was necessary that those new protectionist measures were eliminated as energetically as the developed countries were being asked to lower their barriers to trade.

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