Fifty-eighth General Assembly

Plenary

Open-Ended Panel on Commodities

GENERAL ASSEMBLY PANEL HEARS CALL FOR ENHANCED, EQUITABLE, PREDICTABLE

MARKET ACCESS FOR KEY COMMODITIES FROM DEVELOPING COUNTRIES

A group of independent eminent persons, which recently concluded its examination of commodity trends and issues, including the volatility in commodity prices and their impact on the commodity-dependent nations, presented its report to an open-ended panel General Assembly on commodities today.

The document attaches the greatest priority to enhanced, equitable and predictable market access for commodities of key importance to developing countries; addressing the problems of oversupply for many commodities; making compensatory financing schemes user-friendly and operational; strengthening capacity and institutions; and pursuing the possibilities for the creation of a new international diversification fund.

The 15 person eminent persons panel was formed in response to a request contained in resolution 57/236, in which the Assembly addressed the situation of commodity-dependent developing countries, particularly those in Africa, as well as small island and landlocked developing States.  Those countries are highly dependent on primary commodities as their principal source of export revenues, employment, income-generation and domestic savings, and as the driving force of investment, economic growth and social development.

Representing the panel at today’s meeting were Jorio Dauster, a former member of the Brazilian Foreign Service, who is now an independent consultant based in Rio de Janeiro; Roman Grynberg, Deputy Director and Head of the Trade and Regional Integration Department, Economic Affairs Division of the Commonwealth Secretariat; Irfanul Haque of Pakistan, a former World Bank employee, who has recently worked as a consultant to the G-24 in Washington, D.C.; and Martin Khor Kok-Peng, Director of the International Secretariat of the Third World Network    -- an economist trained at Cambridge University, who has lectured in Economics at the Science University of Malaysia.  A statement was also made by Mark Ritchie, who has worked as a consultant and helped the United Nations Conference on Trade and Development (UNCTAD) in preparing the Panel.

Members of the panel informed the meeting that the designated eminent persons had met in Geneva on 22 and 23 September, where they agreed upon a set of recommendations contained in the report presented today (document A/58/401).  The report identifies a wide range of actions that could improve the conditions of commodity markets and alleviate the poverty of many commodity producers, including through better crop management systems.

Also addressed in the report are debt relief measures; policy design and implementation; capacity-building efforts; institution-building; preferential schemes; South-South trade; exchange of information and experiences on commodity policies; and risk management.  Emphasis was also placed on corporate social responsibility and broad-based partnerships in the search for solutions to commodity problems.

While agreeing that national governments and the international community should attach priority to commodity issues, the eminent persons also felt that in many areas, significant steps could be taken by the United Nations, and in particular UNCTAD.  Among their recommendations, is a suggestion that UNCTAD should explore the possibilities for a new partnership between governments, private business, producers’ and traders’ associations, civil society and international organizations in the commodity area.  The members of the panel proposed that the shape and modalities of such a partnership, as well as concrete steps to implement it, should be announced at the eleventh session of UNCTAD in June 2004,.  They also recommended that the Assembly assign to a competent organization the responsibility to lead open and transparent discussions with all relevant stakeholders on the creation of a new international export diversification fund.

The eminent persons also noted with concern the inability of members of the World Trade Organization (WTO) to come to an agreement at the fifth Ministerial Conference, held in Mexico from 10 to 14 September.  Urgent progress was needed on such issues as removal of market access barriers to developing country commodity exports, as well as sanitary measures and technical barriers to trade and rules of origin.

Developing countries were currently victims of subsidy policies in the developed countries, and the likely delay in international trade liberalization in that area would negatively affect their growth.  The eminent persons called for a speedy resumption of the trade negotiations, which offered the best opportunity to tackle those issues.

Also participating in today’s discussion was Secretary-General of UNCTAD, Rubens Ricupero, who said that the commodity issue was an essential component of the difficult economic situation of many developing countries, which had been unjustly excluded from the agenda of most international organizations.  The situation was becoming worse year after year, creating adverse situations for developing countries, including the current failure in the Heavily Indebted Poor Countries (HIPC) Debt Initiative.  This problem should be faced squarely if the international community wanted to re-engage in trade negotiations.

Over the last two decades the approach of the international community toward the commodity issue had been one of benign negligence, he added.  That attitude must be overcome.  He also highlighted the importance of corporate social responsibility and emphasized the need for corporations and international institutions to address the matter.  The only way forward would be to embark upon a process of constructive thinking backed by strong political commitment on commodity initiatives.  The upcoming conference of UNCTAD in Brazil next year would provide an excellent opportunity to do so.

Today’s meeting was chaired by Julian R. Hunte, President of the 58^th Session of the General Assembly, who emphasized the importance of the issue and said that he would be preparing a summary of today’s discussions for transmission to the Second Committee, in hope that the panel could enrich the negotiations on commodities there.  He hoped the Assembly could adopt a resolution that would contain concrete proposals for measures that could command consensus and support to allow developing economies to use commodity production as a basis for financing of development and more rapid attainment of the Millennium Development Goals.

The Chairman of the Second Committee, Iftekhar Chowdhury (Bangladesh) said that in order to achieve development, it was crucial to have stable and enhanced export revenues, especially for the countries dependent on single or few commodities.  It was therefore necessary to eliminate the unstable environments often created by fluctuating commodity prices.  Developing countries would gain a great deal through a multilateral situation that was sensitive to that problem.  However, the issue had not received much attention so far and progress had been painfully limited.  The international community must focus its attention on that issue, he said.

Speakers in the ensuing debate also stressed the need for urgent action to deal with the crisis situation created by the long-term trend towards decline in prices of such primary commodities as coffee, cocoa and cotton, which had a negative effect on the development of many countries, and shared their national experiences in dealing with the situation.  Emphasized in the debate were the links between commodity prices and the problems of poverty, crime and migration.  Heavily indebted countries were finding that as a result of decline in their total export earnings, a major portion of the foreign exchange revenue went towards meeting their debt service and payment obligations.

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