Fifty-sixth General Assembly

Second Committee

5^th Meeting (AM)  

SPEAKERS IN SECOND COMMITTEE CALL FOR ABOLITION

OF TRADE PROTECTIONISM

The multilateral trading system should be adjusted and reformed in order to be more open, equitable and non-discriminatory, the representative of Slovakia told the Second Committee (Economic and Financial) this morning as it continued its general debate.

Echoing those remarks, the representative of Jamaica, speaking on behalf of the Caribbean Community (CARICOM), said small economies were heavily dependent on equitable and fair terms of trade.  For that reason, any subsequent multilateral trade negotiation must address the inequities and disparities which currently existed in multilateral trade arrangements.  The upcoming World Trade Organization meeting in Doha should focus on the removal of policies that constrain developing country exports of agricultural products as well as labour-intensive manufacturing, such as the garment industry.

The representative of Brazil called for an end to trade protectionism, which he said remained a persistent and widespread practice.  A number of barriers still hindered developing countries' exports.  In the agricultural sector, developed countries were allowed to heavily subsidize their products, generating unfair conditions in areas in which developing countries were competitive.  It was the greatest subsidizing policy ever carried out for the preservation of the interests of one specific sector.  Agricultural subsidies amounted to $361 billion in 1999, more than the entire gross domestic product (GDP) of sub-Saharan Africa.

Speaking on behalf of the Group of Landlocked Developing Countries, the representative of the Lao People's Democratic Republic, said high transport costs made the exports of those countries less competitive in international markets.  While trade liberalization had offered opportunities for export expansion, landlocked developed countries had not been in a position to draw on those opportunities and had become further marginalized.  Due attention should be given to the specific needs of those countries at both the WTO meeting in Doha and the Financing for Development Conference in Monterrey in order to mobilize international support and to address the issue of improving their competitiveness.

Statements were also made by the representatives of Colombia, Cuba, Benin, South Africa, Uganda, Ukraine, El Salvador, Croatia, Republic of Korea, Saint Lucia and Belarus.  A representative of the United Nations Educational, Scientific and Cultural Organization (UNESCO) also spoke.  The Committee will meet again at  3 p.m. today to continue its general debate.

Background

The Second Committee (Economic and Financial) met this morning to continue its general exchange of views.

Statements

ALFONSO VALDIVIESO (Colombia) said that the global economic prospects were not encouraging.  As stated in the 2001 World Economic and Social Survey, the international economic environment continued to deteriorate.  The slowdown in developed countries, through the reduction of exports and the stagnation of capital flows, among other things, continued to affect the developing countries.  Given that scenario, the International Conference on Financing for Development, to be held in Monterrey next year, had before it many challenges. Practical ways must be found to reduce the vulnerabilities of the developing economies and strengthen the international financial system so that it would serve the interests of all and lead to the achievement of development goals.

One of the greatest concerns of developing countries, particularly middle-income countries like his own, was how to attain and maintain economic growth in a demanding international environment, he said.  In that context, Colombia had modernized its institutions and opened its economy.  While each country was responsible for its own progress, interdependence made countries vulnerable to each other's actions.  International cooperation was more important today than ever before.

Turning to the upcoming World Trade Organization (WTO) Ministerial Meeting, to be held in Qatar in November, he said that there must be a free and open international trading system leading to true development.  Protectionist measures, such as subsidies, should be eliminated to enhance access to markets for developing countries. 

Colombia, which was committed to the principles of Rio and Agenda 21, had incorporated sustainable development into its national development plan, he said.  However, many challenges remained.  The dynamics of the preparatory process for the World Summit for Sustainable Development, to be held in Johannesburg next year, would be determined by the commitment of States.

Regarding the three-year review of United Nations operational activities for development, he was concerned that financial support for those activities had not improved despite reforms undertaken in the past few years.  It was obvious that global challenges were demanding greater support from the Organization, but efforts were frustrated due to lack of resources.  He hoped that the review would lead to positive changes in that area.

LUIZ TUPY CALDAS DE MOURA (Brazil) said that launching a new round of multilateral trade negotiations in the Fourth WTO Ministerial Conference, to be held in November, could play a key role in revitalizing international trade.  That conference should be a true development round.  Unfortunately, protectionism remained a persistent and widespread practice and a number of barriers hindered developing countries' exports.  Many Brazilian export products, such as steel, orange juice, sugar and other items faced barriers in the markets of developed countries.  As a result, Brazil, which had opened up its market over the last decade, had accumulated significant trade deficits with those countries.

He added that, in the agricultural sector, developed countries were allowed to heavily subsidize their products, generating unfair conditions in areas in which developing countries were competitive.  It was the greatest subsidizing policy ever carried out for the preservation of the interests of one specific sector.  Agricultural subsidies amounted to $361 billion in 1999, more than the entire gross domestic product (GDP) of sub-Saharan Africa.

He said there should also be a re-evaluation of anti-dumping and subsidies rules.  Devised as an instrument against unfair trade practices, anti-dumping measures had been used for protectionist purposes.  Beyond that, export credits provisions, as they now stood, benefited developed countries and in some cases could prevail over WTO rules.  He added that debt relief or cancellation was another important way of assisting some developing countries.  Brazil supported the Heavily Indebted Poor Countries Initiative (HIPC), to which it had contributed more than $30 million, by collaborating with multilateral institutions and writing off bilateral debts.

ALOUNKEO KITTIKHOUN (Lao People's Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries, said that the fundamental problem of those countries was the lack of territorial access to the sea and remoteness from major international markets.  In terms of trade, that situation made their exports expensive, thus less competitive, due to high transit transport costs.  While efforts had been made to address their needs, concrete action and measures in favour of landlocked countries had been relatively limited and ineffective.

Therefore, he strongly supported the convening of an international ministerial Meeting on transit transport cooperation in 2003 in Kazakhstan.  The objective of such a meeting would be to adopt a collective vision on the issue of transit transportation cooperation and design appropriate measures to develop efficient transit transport systems.  He appealled to all development partners to support the Meeting and its preparatory process.

Trade, he said, was the issue that directly related to the specific problems and needs of landlocked developing countries.  High transit transport costs made the exports of those countries less competitive in international markets.  While trade liberalization had offered opportunities for export expansion, landlocked developed countries had not been in a position to draw on those opportunities and had become further marginalized.  They required differential treatment in order to integrate into the world trading system and to compete fairly with others.  Due attention should be given to their specific needs at both the WTO Meeting in Doha and the Financing for Development Conference in Monterrey in order to mobilize international support and to address the issue of improving their competitiveness.

ORLANDO REQUEIJO (Cuba) said the technology gap between developed and developing countries was growing wider each year.  The numbers of Internet users in the developed world far outnumbered those in developing countries, who knew nothing of such technological advances.  In that regard, nearly all those who used cell phones, fax machines and other such technologies were in the developed world. Meanwhile, millions around the world know nothing but poverty and lacked basic medicines like penicillin.  Developing countries must become a part of the world economy in an active way.

He added that never before had financing for development been more important, and the conference on that topic, scheduled for 2002 in Mexico, held out much hope.  There was a need to involve all countries, especially developing countries, to improve the international mechanisms for economic development.  The developed world should give preferential treatment to those countries, especially by opening up their markets to products from developing countries.  His own country had been the victim of sanctions for decades, with serious consequences for its economic development and foreign trade.  Such sanctions were a flagrant violation of international law, and particularly of the principles that governed trade among nations.

EDOUARD AHO-GLELE (Benin) said that the United Nations was dedicating more and more sustained attention to the difficulties its most vulnerable Members were facing in the economic and financial spheres.  The most vulnerable included a considerable number of countries, among them the least developed countries (LDCs), landlocked developing countries and small island developing States.  He was pleased to note that various action programmes had been elaborated to address the needs of those countries.  However, their implementation required adequate resources and proper system-wide coordination and follow-up.  In that regard, he highlighted the programme of action adopted at the Third United Nations Conference on the Least Developed Countries. 

He also expressed his satisfaction with the decision of the European Union to endorse the Group of 77's recommendation for a high representative for the LDCs, landlocked developed countries and small island developing States. 

DUMISANI KUMALO (South Africa) said a key concern for developing countries remained the inadequacy of resources for the implementation of sustainable development programmes.  That was despite the commitments made at Rio in 1992 and in other international conferences of the past decade.  The World Summit on Sustainable Development (Johannesburg, 2002) should therefore address that important aspect.  The Summit should also make a contribution to the fulfilment of international development goals and the outcome of the Millennium Summit.  The Johannesburg Summit should articulate a new vision for the governance of sustainable development.  The ongoing review of international environmental governance should therefore be an important component of that new vision.

Declining official development assistance (ODA) levels had resulted in the weak financial base for the operational activities of the United Nations, he said.  That undoubtedly affected the ability of the system to help address the development challenges of developing countries.  There was no doubt that ODA was still a very important source of development finance through the United Nations for numerous countries.  He was encouraged, however, by recent statements made by developed countries in regard to reaching their ODA targets as soon as possible.  While developing countries should not be ODA-dependent, such assistance was crucial in the short and medium-term, and it played a catalytic role in mobilizing other resources for development.

There was a need for closer coordination amongst the United Nations agencies that dealt with cross-cutting issues, he added.  The expansion of the United Nations Development Group would contribute to that coordinated approach to the Organization’s work at the field level.  The full involvement of governments of programme countries in the formulation of the United Nations Development Assistance Framework, as well as its full ownership through their consent to the finalized agreement, could not be overemphasized.  

EMMANUEL OLOBO BWOMONO (Uganda) said that one way of alleviating the plight of developing countries was by addressing the issue of external debt, which continued to be the greatest hindrance to their development.  It was also one of the obstacles to rapid economic growth and poverty eradication.  Meaningful debt relief must, therefore, be a high priority for the international community.  At the root of the problem was the failure by more seriously affected countries to generate sustained economic growth and development.  The debt problem should, therefore, be tackled in a broader development context.

Although the HIPC Initiative had provided important benefits for those countries which qualified for debt relief, there were still some problems to be addressed to maximize the benefits of that Initiative, he said.  Among them, funding must be found to fully implement the Initiative.  Debt relief was one way to free resources for investment and poverty eradication.  However, for it to be effective in improving economic and social conditions in the poorest countries, debt relief must be accompanied by sound domestic economic and budgetary policies.  Indeed, the best long-term solution to the debt crisis was to cancel entirely the crippling debts of all LDCs.  

Trade, he said, offered one concrete avenue for mobilization of resources for growth and development.  He stressed the need for greater market access for products from developing countries, and looked forward to the WTO Ministerial Meeting in Doha.  He hoped that the issues of concern to developing countries would be given due priority at the meeting.  Also, he hoped that the Conference on Financing for Development would make a real difference in reducing poverty and increasing access to financial resources, especially in Africa.  The sombre assessment of economic prospects for the decade should compel everyone to reassess their approach to international cooperation for development.

MARKIYAN KULYK (Ukraine) said that economies in transition had taken significant steps toward recovery in the year 2000-2001, with a rate of GDP growth substantially higher than in the rest of the world.  Though most transition economies had established the institutions of a market economy and liberalized both domestic markets and foreign trade, they continued to face challenges in restructuring their economies and addressing macroeconomic imbalances.  The deceleration of the world economy did not augur well for the transition economies, because increasing consumer demand could not offset decreasing Foreign Direct Investment and trade flows.

He said that after a long crisis, Ukraine had reached a turning point in its recovery, achieving growth rates of 6 per cent for GDP, 10 per cent for industrial production and 12 per cent in real income for the population.  Ukraine’s main tasks now were to make economic growth sustainable and to make that growth benefit all its people.  The international community should support economies in transition in their efforts to promote growth, eradicate poverty and resolve environmental problems.  Specific measures that should be taken included increasing market access for transitional economies’ products and curbing the use of protectionist measures.

He stressed the importance of enhancing the capacity of the United Nations development system to respond to the needs of programme countries.  In countries with economies in transition, the United Nations should focus its activities on promoting market reform and entrepreneurship, rendering technical advice and assistance in areas such as infrastructure-building, and accelerating the integration of transitional economies into the world economy.  The achievement of sustainable development was one of the most serious challenges faced by the international community, and there were several upcoming international conferences at which the problem could be addressed.

JOSÉ ROBERTO ANDINO SALAZAR (El Salvador) said his country had adopted a number of measures to move toward economic liberalization, including opening up its markets to trade.  Such measures helped in the effort to move towards integration in the world economy.  Measures had also been taken to bring inflation under control and privatize industries that were once government-run.  Such actions had transformed the social and financial system in his country.  Because of those measures, poverty had been reduced greatly since 1991, and per capita income had increased.  However, the earthquakes of last January and February had a detrimental effect on poverty and development.

International support was very important in the development effort, he added.  National efforts were not enough, especially in regard to international trade liberalization.  He hoped the Conference on Financing for Development in Mexico would help create a friendly environment for development financing.  It should also give developing countries a greater and more active role in the international financial system.

He supported the process leading to the World Summit on Sustainable Development, he said.  Nine years since the Rio Declaration and Agenda 21, the principles agreed upon were still not fulfilled, especially in regard to technology transfer.  The Summit should address that problem, but it should not be used as an opportunity to renegotiate the commitments of Agenda 21.

IGOR VENCEL (Slovakia) said that national governments themselves must be the driving force in pursuing a policy that would embrace economic as well as social factors for development.  Good governance was crucial in fighting the root causes of poverty.  Human rights must be respected and an adequate legal framework developed.  Good governance also meant pursuing sound macro-economic policies and fighting corruption.  The implementation of poverty-reduction strategies and programmes, which strengthened human and institutional capacities, must still be given high priority in national as well as international policies.

At the same time, he said, the international community must do much more to provide an enabling economic environment.  The multilateral trading system should be adjusted and reformed in order to be more open, equitable and non-discriminatory.  The United Nations Conference on Trade and Development (UNCTAD) played a unique role in the United Nations system in supporting efforts to promote the effective participation of developing countries and countries in transition.

Some transition economies faced chronic economic and social problems which were essentially those of underdevelopment, he added.  Economic development and its financing remained crucial issues, and the preparatory process before the Conference on Financing for Development was a very good opportunity for singling out the key factors for economic development and poverty alleviation.  In view of the heterogeneity of levels of development and the associated diversity of problems, there was a need to tailor both official assistance and debt relief to the specific needs and circumstances of individual countries.

TANIA VALERIE RAGUZ (Croatia) said there was fear that the tragic events of 11 September could trigger instability in a world economy already suffering from isolationist policies, with dire consequences for developing countries.  Endeavours to reverse the marginalization of developing countries and to promote their sustained economic growth had led to a search for balanced global arrangements.  The proposal of the General Assembly to better integrate regional organizations into the work of the UN would be a step in the right direction.

Further cooperation between the Economic and Social Council (ECOSOC) and the Bretton Woods institutions had been given new impetus by the Millennium Declaration, he said.  The Council’s efforts to cooperate with other international institutions, civil society and the private sector should be supported.  Globalization had contributed to his country’s decision to make accession to regional and international organizations dealing with economic, trade, security and political issues a top priority.

The challenge of integrating developing countries into the world economy was a substantial one.  Foreign Direct Investment was vital to accelerating development, but should not be treated as a replacement for ODA.  Information and Communication Technology (ICT) could be used a tool for development and empowerment.  Because the ideas of “best available technologies” should be adhered to, ICT could not be used at the expense of the principle of sustainable development.

PATRICIA DURRANT (Jamaica), speaking on behalf of the Caribbean Community (CARICOM), said that two crucial areas which must be given sufficient attention within the financing for development debate were trade and debt relief.  Small countries, such as those in the Caribbean with their small domestic markets, were heavily dependent on equitable terms of trade.  For that reason, any subsequent multilateral trade negotiation must address the inequities and disparities which currently existed in multilateral trade arrangements.  Such a "development round" of the WTO should focus on the removal of policies that constrained developing country exports as well as labour-intensive manufacturing, such as the garment industry.

There was continuing concern about the perpetuation of inequities in the global trade and financial systems, which served to further marginalize vulnerable and small economies, she continued.  Such practices posed a real challenge to the viability of those economies.  Special and differential treatment for vulnerable countries was crucial for their survival in the global trade and financial system.  Therefore, those countries would press for the initiation of dialogue on those issues at the upcoming WTO meeting.

She said that the debt burdens of many developing countries and transition countries had become oppressive constraints on their ability to reduce poverty and reach other development goals.  Fully implementing the HIPC Initiative was an urgent and important objective.  Donors should provide the necessary resources while ensuring that this was not done at the expense of other ODA flows.  Countries that attained debt sustainability under the Initiative would still need further assistance to achieve desired economic and social development, including poverty eradication.

Thus, she said, bilateral and multilateral creditors should pursue debt relief vigorously and expeditiously, including steps to provide significant and immediate debt relief to the poorest countries.  It was also necessary to address the urgent concerns of middle-income countries in that regard.

HO-JIN LEE (Republic of Korea) said that excess investments and inventories had shrunk the import demand of developed countries, thereby reducing export opportunities for developing countries.  Attention should be paid to negative aspects of globalization, such as marginalization of developing countries, the spread of communicable diseases and the spread of organized crime.  To reduce the  undesirable effects of globalization, individual governments should make certain the rule of law, democracy, and market mechanisms were in place.  It was encouraging to note that many developing countries had taken proactive steps to improve domestic governance.

He noted that partnerships amongst the shareholders in globalization, such as donors, recipients, public and private sectors, needed to be strengthened to cope with the challenges.  Given the magnitude of resource mobilization for growth and development to be discussed at the International Conference on Financing for Development, political rhetoric and unrealistic commitments should be avoided. Bold policies, in cooperation with the private sector, for developing human resources and institutional capacities needed to be adopted in order to confront the challenges posed by ICT. 

To aid the participation of developing countries, his Government was considering making a contribution to the Rio + 10 Trust Fund.  In spite of recent economic setbacks, his country would gradually increase ODA.  His country had removed tariffs on 80 commodities of major export interest to LDCs, to improve their market access.  His country’s contributions to development also included contributions to several facilities of the Bretton Woods institutions, including the HIPC Trust Fund. 

SONIA R. LEONCE (Saint Lucia) said that her own country had been experiencing the negative effects of globalization and trade liberalization for years, and had warned early on that others would also do so, which in fact had been the case in recent years.  Developing countries had been told to integrate, to liberalize and to create an enabling environment.  Yet foreign direct investment (FDI) to all countries had decreased.  Now that the environment in developed countries was more uncertain, FDI to developing countries was expected to fall even further.  Developing countries were told to expect international assistance but just yesterday, a major donor had announced that it would be decreasing international assistance.

Last year, she said, Saint Lucia had argued that the United Nations should zero in on development as a primary strategy for maintaining international peace and security.  The Organization could not continue to promote economic decline by de-emphasizing development, which was reflected in budgetary allocation for development activities, and focusing on peacekeeping and conflict prevention.

It was crucial to have the effective participation of developing countries in decision making and in formulating policies which determined their fate, she said.  The Financing for Development Conference would be an opportunity to correct

 the conditions that created and sustained poverty.  Her country would continue to promote contractual and preferential treatment for developing countries within the global trade system as well as regularizing the relationship between the WTO and the United Nations.  Unless such fundamentals were addressed, the international community would only continue to perpetuate a system of injustice.

SERGEI LING (Belarus) said the upcoming conferences in Monterrey and Doha should establish a realistic basis for sustainable development to take place. Achievement of development goals, however, was not possible without adequate financing -- and all Nations should address the need for such financing.  It should also be kept in mind that there were existing agreements and mechanisms that had not been fully realised.  In that regard, the problems of trade liberalization and trade rules needed to be addressed.

He said that Belarus was one of the most open economies in the world.  As a country with an economy in transition, it particularly looked forward to the Doha conference, which he hoped would lead to further implementation of the Uruguay Round.  Many measures for development had not been realized due to inadequate financing, particularly in the area of technology transfer.  The international community needed to address technology as well as other issues in order to ensure development around the world.

JONES KYAZZE, Director, United Nations Educational, Scientific and Cultural Organization (UNESCO) Liaison Office with the United Nations, hoped that the Committee would continue to aim at mainstreaming the contribution of the specialized agencies into the broader endeavour of the United Nations system, particularly with reference to science and technology.  Another item before the Committee to which UNESCO attached great interest was the World Solar Programme 1996-2005.  UNESCO pledged to provide continued and sustained support to that Programme and looked forward to similar support from the Committee.  As for poverty eradication, UNESCO's strategy was organically linked to its Education for All programmes, which he invited the Committee to keep in mind when considering the relevant item.

The Committee's current session, he said, came at a time when the words pronounced at the Third United Nations Conference on the LDCs were still echoing in the spirit of the poorest of the poor.  In that regard, the Assembly, and the Committee in particular, had the daunting challenge of working towards the implementation of the Plan of Action adopted in Brussels.  UNESCO, for its part, believed that developing the human resources of the LDCs, notably through education and training, could be instrumental to that end.  It was imperative to dramatically increase investment in human resources development in order to help each and every one of those countries to advance.

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