Fifty-Ninth General Assembly

Second Committee

23^rd & 24^th Meetings (AM & PM)

international community urged to stabilize prices of commodities from developing

countries as second committee concludes trade, development

 

World Trade Organization Urged

To Focus on Commodities Sector in Current Negotiations

The international community must take urgent steps to stabilize the prices of developing-country agricultural and food products, which were vital in generating income, savings, foreign exchange and employment, Qatar’s delegate told the Second Committee (Economic and Financial) today as it concluded its discussion on international trade and development.

Speaking on behalf of the “Group of 77” developing countries and China, he stressed that those commodities were the mainstay of economic growth in many developing economies and that the World Trade Organization (WTO) should focus on that sector in current trade negotiations.  In particular, it should tackle the damaging effects of price fluctuation, make compensatory financing schemes more responsive to commodity producer needs, and tackle depressed prices resulting from commodity oversupply.

Also addressing commodity instability, Anwarul Chowdhury, High Representative for the Least Developed Countries, Landlocked Developing Countries and SmallIslandDevelopingStates, noted that farm subsidies in industrialized countries had undermined the competitiveness of commodity producers.  In 2002, cotton subsidies in the United States and the European Union had caused some $300 million in lost revenues for Africa -- significantly more than the $230 million in total debt relief approved for nine cotton-exporting African countries.

He noted that almost 12 million people in Benin, Burkina Faso and Mali depended on cotton exports for income and emphasized the urgent need for a WTO move to eliminate commodity and export subsidies.  Moreover, fierce competition was expected in the garment and textile trade after the expiration of the multilateral Agreement on Textiles and Clothing (ATC) in January.  Developed-country partners must be willing to mitigate any negative impact on least developed countries (LDCs) resulting from the elimination of quantitative restrictions on imports.

Carrying that point further, Mali’s delegate said his country was the top African cotton producer and that more than 3 million people, or about a quarter of the country’s population, made their living from the sector.  But the country was badly hit by agricultural subsidies in wealthier nations and was suffering its lowest cotton production in the past 30 years.  Subsidies ran counter to international trade rules as defined by the WTO and trade negotiations should open up world markets and make them more equitable for the benefit of rich and poor countries alike.

Several speakers pointed to South-South trade as a viable alternative for commodity producers, with the European Commission’s delegate noting that it could become a major source of export earnings for developing countries.  The World Bank had estimated that 80 per cent of developing-country gains from multilateral trade liberalization had come from their own freer markets.

Kenya’s representative said that South-South trade had accounted for one tenth of world trade, or some 40 per cent of developing-country exports, by 2003.  Current trade negotiations had focused on trade between industrialized and developing nations, but present trends suggested that commercial traffic among developing countries would become just as intense.

Other speakers pointed out that the rising marginalization of developing countries in the international trading system and their increasing vulnerability to external shocks had forced painful economic adjustments on many of them.  Developing countries gained less from trade than industrialized nations due to high tariffs and other barriers that undermined preferential schemes.  The WTO had failed to concern itself with fluctuations in its members’ trade, preferring to move into such policy issues as intellectual property regimes and domestic investment.

In other business today, Ukraine’s delegate introduced a draft resolution on integration of the economies in transition into the world economy, and Switzerland’s representative introduced a text on the World Summit on the Information Society.

Also making statements were representatives of Pakistan, Russian Federation, China, India, Mauritius (on behalf of the Alliance of Small Island States), Bangladesh, Cuba, Switzerland, Australia (on behalf of the Cairns Group), Malaysia, Nepal, Libya, Burkina Faso, Thailand, South Africa, Venezuela, Indonesia (on behalf of the Association of South-East Asian Nations), Lao People’s Democratic Republic (on behalf of Land-locked Developing Countries), United States, Philippines, Belarus, Iraq, Guyana (on behalf of the Caribbean Community), Egypt, Ukraine and Ethiopia.

An official of the United Nations Conference on Trade and Development (UNCTAD) and a representative of the International Union for the Conservation of Nature and Natural Resources (IUCN) also spoke.

The Second Committee will meet again at 9:30 a.m. on Thursday, 4 November, to begin its consideration of operational activities for development.

Background

The Second Committee (Economic and Financial) met today to continue its discussion of international trade and development.  (For background information, see Press Release GA/EF/3088 of 2 November.)

Introduction of Draft Resolutions

OLEKSII HOLUBOV (Ukraine) introduced a draft resolution on integration of economies in transition into the world economy (A/C.2/59/L.19), stating that some minor changes had been made to the text, which addressed particular difficulties that transition countries faced concerning socio-economic development and economic integration.  Special emphasis had also been placed on the need to ensure implementation of the Monterrey Consensus and the Johannesburg Plan of Implementation, which were of particularly importance to transition economies.

JEAN-ROBERT MORET (Switzerland) introduced another draft resolution on the World Summit of the Information Society (document A/C.2/59/L.18), which he said encouraged all Member States to remain committed to the second phase of the Summit, to take place in Tunis in 2005.

Statements

ANWARUL CHOWDHURY, High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, said that preferential trade measures like the “Everything But Arms” initiative of the European Union, the Africa Growth and Opportunity Act of the United States, and other such arrangements contributed to trade expansion, increased foreign exchange and positive prospects for investment, while creating jobs and generating income in developing countries.  However, few least developed countries (LDCs) had benefited from such measures.  They needed substantial programmes in trade and productive capacity-building, as called for in the Brussels Programme of Action, as well as stepped up financial contributions to the Integrated Framework for Trade-related Activities in the LDCs.

Farm subsidies in the industrial countries undermined the competitiveness of LDC commodity producers, he said.  In 2002, the United States and the European Union subsidies for cotton producers caused up to $300 million in lost revenue in Africa, home to 34 LDCs, significantly more than the $230 million in total debt relief approved for nine cotton-exporting African countries that were qualified for the Heavily Indebted Poor Countries (HIPC) Debt Initiative.  In Benin, Burkina Faso and Mali, almost 12 million people depended on cotton exports for income.  Effective and specific solutions within World Trade Organization (WTO) negotiations to eliminate all forms of commodity production and export subsidies were urgently needed.  Concerning the expected fierce competition in the garment and textile trade after the multilateral Agreement on Textiles and Clothing (ATC) expired in January, developed partners must be willing to mitigate any negative impact on LDCs as a result of the elimination of quantitative restrictions on imports.

JOHN RICHARDSON, head of the European Commission delegation to the United Nations, said that urgent measures were needed to ensure the continued contribution of commodity sectors to poverty eradication and the Millennium Development Goals.  The Union had adopted an Action Plan on Agricultural Commodities, Dependence and Poverty, along with a proposal for a European Union-Africa Partnership for cotton sector development.  Both proposed actions to improve the incomes and reduce the vulnerabilities of commodity dependent developing countries and other commodity producers.

He said that more support for commodity sectors was needed in commodity dependent developing countries.  That required analysis of the sector’s strengths and weaknesses, as well as the threats and opportunities that commodity chains faced, with a special focus on the situation of producers.  The international corporate sector was a major actor in the commodity sector and efforts were needed to support the mainstreaming of sustainable production practices, including their environmental, social and economic aspects, into corporate practices.  The international community should increase public awareness of ongoing efforts to help commodity-dependent developing countries to benefit from related opportunities, including through public-private partnerships.

Stressing that market access was also important, he said the Union had favourable market access for imports from commodity-dependent developing countries under the “Everything But Arms” initiative for LDCs, but more effort was needed to build up market capacities in those countries.  In addition, South-South trade, currently growing as fast as global trade, could become a main source of export earnings for developing countries.  Tackling high tariff barriers, which still impeded South-South trade, would unlock a still greater potential for expansion.  The World Bank had estimated that 80 per cent of the gains from multilateral trade liberalization accruing to developing countries resulted from their own trade liberalization and reforms in their agriculture and food sectors.

AIZAZ AHMAD CHAUDHRY (Pakistan) said that framework agreements resulting from the Doha process should ensure that developed countries committed to substantially reducing domestic support and eliminating export subsidies in agriculture in order to correct the long-standing imbalance in agricultural trade.  Subsidies should be eliminated at an early date, bearing in mind their trade-distorting impact on developing countries’ exports, and appropriate safeguards taken against the possible abuse of mechanisms for denying market access for sensitive products.  There should not be inordinate delays in hammering out rules governing tariff escalations, tariff simplifications and special safeguard mechanisms in agriculture market access.  Developing countries must also have flexibility in dealing with their special products and have special safeguard mechanisms to protect themselves against sudden import surges.

The framework on Non-Agriculture Market Access (NAMA) should adequately reflect the principle of less than full reciprocity so as not to cause unemployment to rise and industrialization to slow in developing countries, he continued.  Pakistan also called for the reduction or elimination of high tariffs, tariff peaks and tariff escalation, and non-tariff barriers, particularly on developing countries’ exports.  There should be an end to the arbitrary use of non-tariff barriers, especially anti-dumping measures, sanitary and phyto-sanitary standards.  Also necessary was the full implementation of the WTO agreement on Textiles and Clothing, which provided for the complete phase-out of the Multi-fibre Agreement (MFA) by 31 December 2004, and stops to ensure that other measures and trade barriers did not impede market access for developing-country textile exports.

NASSIR ABDULAZIZ AL-NASSER (Qatar), speaking on behalf of the “Group of 77” developing countries and China, stressed that open, transparent, inclusive, democratic and more orderly procedures were necessary for the multilateral trading system to function effectively, especially in decision-making, so that developing-country interests would be duly reflected in trade negotiations.  Moreover, the specific development needs of developing countries should be fully addressed to ensure equitable and balanced outcomes within and across the areas of negotiation.  Agricultural negotiations should aim to draw up means of achieving substantial improvements in market access, decreases in export subsidies and reductions in trade-distorting domestic support.

He expressed concern that many developing countries, especially LDCs and commodity-dependent countries, were still marginalized in international trade and vulnerable to external shocks.  The commodity sector had continued to be the mainstay of many developing country economies in generating income, savings and foreign exchange, as well as employment and livelihoods.  Special attention must be paid to that sector, both by developing countries and the international community, including under the Doha negotiations.  It was regrettable that the flow of assistance to agriculture had declined and, hopefully, that trend would be reversed.

Reform of the multilateral trading system was also vital, he said.  However, price instability in commodity markets would remain a challenge both to developing country governments, as well as to commodity producers and exporters.  Measures were also needed to reduce the negative effects of price fluctuations.  Compensatory financing schemes should be reviewed, with the aim of making them more operational and responsive to the needs of commodity producers.  The persistent oversupply of some commodities, and the resulting depressed prices, must also be addressed.

ANDREI KONDAKOV (Russian Federation) said developing countries must work out rational strategies to fight poverty, including through more effective macroeconomic policies and poverty reduction programmes.  They also needed stronger production capacities, increased market competitiveness, and greater partnerships between governments, the private sector and civil society.  The current Doha trade negotiations called for the gradual removal of export subsidies, lower import duties on agricultural goods and increased access to developed-country markets for developing-country products.  The Russian Federation had a duty-free policy towards the majority of goods from LDCs and had no limit on imports, anti-dumping regulations or special protection measures.

He said regional trade agreements played an important role in attempts to reform the international trading system.  According to WTO assessments, there would be more than 300 such accords by 2007.  In actively working towards integration into the world economy, the Russian Federation was implementing trade agreements with neighbouring countries.  In the longer-term, regional integration would benefit all participating countries.

ZHANG YISHAN (China) said that the framework agreement reached on 1 August on core issues of the Doha development agenda sent a positive message for further strengthening the multilateral trading system and set the stage for future negotiations.  The agreement was an interim step, however, and tough negotiations lay ahead on rules governing agricultural and non-agricultural market access.  Development and special, differential treatment for developing countries deserved priority.  Wide-ranging commitments by new WTO members in the accession process must be taken into account and their concerns effectively addressed.

He called for the complete elimination of all agricultural export subsidies, a substantial reduction of trade-distorting domestic support and substantial increases in market access opportunities.  The tariff-reduction formula applied to non-agricultural market access should effectively reduce high tariffs, tariff peaks and tariff escalation.  China welcomed the integration of textiles and the clothing trade into the multilateral trading system and opposed new protectionist measures.  China was also firmly committed to the Doha agenda and was ready to strengthen cooperation with all parties to reach a balanced agreement.

SHRINIWAS DADASAHEB PATIL (India) said that poverty-sensitive sectors in developing countries must be promoted and supported, including through enhanced and predictable market access, so that trade could contribute to the enormous challenges of poverty reduction.  Developing countries must be allowed to capture better and higher returns from their exports commodities, manufactured goods and services through trade and investment synergies.  That meant giving better access to labour-intensive developing-country exports of goods and services, and increased mobilization of developing-country labour.  The rules of the game, both in terms of intergovernmental arrangements and international market operation, must guarantee a level playing field for developing countries, while considering their special needs and limited capacities, both structural and system-induced, compared to their developed partners.

The gains that developed countries had anticipated from agricultural reform and trade liberalization had eluded them until now, he said.  Agriculture was not only about trade, but had vital development ramifications.  Developing countries also desperately needed flexibility in negotiations on non-agricultural market access, which should focus on the development-related requirements of all developing countries and result in a mechanism to substantially address their sensitivities.  Greater emphasis must be placed on improved market access, price stabilization for exports, and an end to market-entry barriers to goods and services from developing countries.

JAGDISH KOONJUL (Mauritius), speaking on behalf of the Alliance of Small Island States (AOSIS), said that the erosion of trade preferences was of grave concern to the AOSIS members and that every effort must be made to give them the space to make necessary adjustments.  According to the 2004 UNCTAD publication “Development and Globalization –- Facts and Figures”, small island developing States were economically 34 per cent more vulnerable and their agricultural production 31 per cent less stable than that of other developing countries.  The decline in agricultural exports was of serious concern to small island developing States, more than half of which had gone from being net agricultural exporters a decade ago to net food importers today.  Agriculture was a key source of employment, food security, foreign exchange earnings and a major contributor to rural development.

He called for changes in agricultural trade policy to address the increased demands on urban resources in sanitation, health and crime prevention that resulted from rural-to-urban migration.  Also necessary were improved information systems to more accurately value agriculture’s contribution to the overall economy and to facilitate successful agricultural product development and marketing.  Due to their small size and resource base, and great vulnerability to natural disasters, the AOSIS members were appealing to the international community to accept vulnerability as a basis for special and differential treatment in international trade negotiations.  The 2 August Doha Work Programme was, at best, vague in terms of how it would reform trade rules and provide special treatment to promote development in small States as called for in the Johannesburg Plan of implementation.  The AOSIS called for enhanced and effective participation by small island developing States in the WTO framework to ensure appropriate measures to facilitate trade expansion, improved standards of living and food security.

SOLOMON KARANJA (Kenya), noting that commodities played a dominant economic role in the majority of developing and transition countries, said it was impossible to boost economic growth in many developing countries without considering the world commodity trade.  The performance of commodities in global trade differed between commodity groups.  While prices for industrial raw materials, including minerals, palm oils and rubber, had increased substantially, while prices for commodities grown mainly in sub-Saharan Africa had risen only modestly.  When placed against trade deterioration in some African countries, marginal price gains had no positive effect on their economic growth.  Countries close to populous and faster-growing economies, especially in Asia, were the main beneficiaries of the recent rise in commodity prices.

While the main destination for commodities, particularly those from sub-Saharan Africa, had been the European market, there had also been phenomenal growth in South-South trade, he said.  That trade had accounted for one tenth of world trade, or 40 per cent of developing-country exports, by 2003.  Ideas about South-South trade must be refocused, and trade barriers among developing countries eliminated.  Current trade negotiations had concentrated on trade relations between developed and developing countries, but current trends suggested that commercial traffic among developing countries would become just as intense.

KHONDKER M. TALHA (Bangladesh), aligning himself with the Group of 77 and China, said that openness to trade and the international financial system had exposed developing countries to a fiercely competitive environment, increased their vulnerability to external shocks, forced them to undergo painful economic adjustments and failed to end selective exclusion and the pursuit of vested interests.  Developing countries had paid for their openness and premature liberalization and exporting commodities, in which they had a comparative advantage, had been a path to disaster.  Over the last four decades, there had been a marked decline in the market share of LDCs in world trade and they should benefit from duty-free and quota-free access for all their products.

Also, a safety net should be designed to help them cope with the fallout from the implementation of WTO agreements, he said.  Developing countries gained less from trade than industrial countries did because high tariffs and other barriers were undermining many preferential schemes designed for them.  The WTO did not concern itself with trends and fluctuations in its members’ terms of trade, but it had moved deeply into domestic policy issues such as intellectual property regimes and domestic investment and subsidy policies.

Developed countries, while maintaining high subsidies and erecting new protectionist devices, had kept the doors closed to sectors where developing countries had an overwhelming edge, he said.  The adoption of the “July Package” by the WTO would be a forward movement, although there was a need to re-engage and build upon the advances made.  Implementation-related issues and special and differential treatment remained critical for developing countries.

NADIESKA NAVARRO (Cuba) stressed the importance of eliminating imbalances in the multilateral trade system, which continued to favour wealthy, developed countries.  Those nations must eliminate conditions imposed on developing countries so that they could gain preferential market access to developed-country markets.  Such conditions compromised essential labour and environmental standards in developing countries and were contrary to international consensus in that regard.  Initiatives begun during the eleventh session of the United Nations Conference on Trade and Development (UNCTAD) in Sao Paulo must be pushed forward to assist LDCs.

She said that developing countries must work toward greater regional economic integration.  Cuba supported the Global System of Trade Preferences among Developing Countries (GSTP) as a mechanism for improving South-South cooperation and the negotiating capacity of poor countries as a trade bloc.  Cuba also called for full support for UNCTAD’s recommendations for coherence in trade and financial policy and for true technology transfer to developing countries.

OLIVIER CHAVE (Switzerland) said that the 1 August agreement of the WTO was a key and positive move towards the creation of a multilateral and open trading system that took more into account developing countries’ interests.  The Doha round was back on track, a clear signal to the world that the WTO could produce positive results to globalization’s challenges and that trade liberalization could continue on a multilateral path that would particularly benefit small and medium-sized countries.  Moreover, the agreement addressed several developing countries’ concerns.  The implementation of special and differential treatment that took into account the level of each country’s economic and institutional development, as well as degree of competitiveness, was a key to the success of current negotiations.  Such criteria existed for less developed countries and should be applied for other categories of economically vulnerable countries.  It was important to intensify negotiations to avoid postponing progress in services and industrial production.

The October report of UNCTAD, “Review of developments and issues in the post-Doha work programme”, illustrated developing countries’ concerns in all negotiated areas, and contained very useful information on what should be included in their agenda for the present negotiations.  Increased participation by developing countries in international trade, particularly at the South-South level, was emerging and could potentially strengthen their economic growth, employment opportunities and poverty-reduction efforts.  Still, the section on the exchange of industrial products and anti-dumping measures glossed over the obstacles to South-South trade in those two areas.  The report revealed that despite the relatively high level of openness, most less-advanced countries were not benefiting from preferential market access.  Increased overall export growth in some less advanced countries had not led to substantial poverty reduction.

JOHN TIERNEY (Australia), speaking on behalf of the Cairns Group, said that distortions in world agricultural markets had continued to undermine the efforts of many developing-country agricultural sectors to contribute to sustained economic development and poverty alleviation.  World leaders had recently called for trade barriers to be eliminated and markets opened, so that developing countries could unlock the full potential of their agricultural sectors, improving their people’s food security and welfare, and providing impetus to the entire world economy.

The WTO July Framework Package had broken new ground by locking in a historic commitment to eliminate agricultural export subsidies, which had severely damaged global farm exports and domestic markets, by a certain date, he said.  It also foreshadowed big cuts in other farm subsidies provided by many wealthy countries.  Moreover, it had laid a good foundation for securing substantial improvement in market access for all products, while considering the special needs of developing countries.  It was in everyone’s interest that all countries, other than LDCs, contribute to agricultural reform, especially those most responsible for severe distortions in world agricultural markets.

YEAN YOKE HENG (Malaysia) said that a transparent, predictable and open multilateral trading system would allow for a free flow of technology, increased levels of innovation, development of new technologies and greater productivity.  Malaysia would continue to participate actively in WTO negotiations to ensure that the system provided flexibility for developing countries to continue their pursuit of development goals.  Malaysia supported the consensus reached at the July WTO General Council meeting on agriculture and non-agriculture negotiations and trade facilitation, and hoped that the WTO’s ministerial meeting next year would further the process of creating an open, equitable and non-discriminatory system that benefited both developed and developing countries.

He called for concrete action by the WTO to address developing countries’ concerns over the difficulty in implementing some WTO agreements and decisions due to their lack of the necessary resources and technical capabilities.  In that regard, Malaysia supported initiatives to enhance developing countries’ technical capacity, particularly that of LDCs, and various UNCTAD initiatives to help developing countries assess the results of the Doha Work Programme and create appropriate institutional capacity and technical knowledge for maximum benefit in trade development and economic well-being.  Also encouraging were a new series of UNCTAD projects, launched in cooperation with the WTO and the United Nations Environment Programme (UNEP), to enhance developing countries’ capacity in policy-making and negotiations on key trade and environment-related issues.

DURGA SUBEDI (Nepal) noted that developing countries had increased their share of international trade to 30 per cent from 20 per cent in the 1980s.  Still, LDCs and landlocked developing countries had remained vulnerable and marginalized in the international trading system.  In recent years, some countries had progressed considerably, but the majority of developing countries were still seeking ways to enter the global trade.

Drawing attention to the continuing decline in commodity prices, he said that sector had failed to play its anticipated role as an engine of growth over the past few decades.  Prices for agricultural products had risen slowly -– 27 per cent in 2003 and 21 per cent during the first half of 2004.  Similarly, food prices had risen by only 1 per cent in 2003 and 7 per cent during the first half of this year.  Now, oil prices were rising, negatively affecting economic growth in oil-importing developing countries and forcing them to spend a considerable amount of their export revenues.

Current imbalances and inequalities in the multilateral system were impeding global trade, he said.  Developing countries were becoming confused by instability in global markets and losing confidence in globalization.  Poor countries, unable to compete in international trade, were increasingly becoming marginalized in the global economic regime.  Unfortunately, their voices and priorities were often overshadowed.

JABER ALI RAMADAN (Libya) said that the 1 August agreements of the Doha round had made significant advances in creating fair and comprehensive frameworks for market access for agricultural and non-agricultural products.  The continuation and successful outcome of the Doha round would be instrumental in enabling the international community to achieve the common objectives of the international community set forth in the Millennium Development Goals.  However, LDCs and commodity-dependent countries remained marginalized in the international trading system and vulnerable to external shocks, which was a cause for concern.

He called for the elimination of all forms of agricultural subsidies and quotas in order to give developing countries’ agricultural and manufactured goods fair access to developed-country markets.  Libya also stressed the importance of technology transfer to developing countries, which was essential for meeting the millennium targets, as well as comprehensive international frameworks for processing, shipping and quality control, and commodities.

DER KOGDA (Burkina Faso) said international trade was marked by such inequities as unilateral price-setting for commodities, agricultural subsidies in developed countries and unfair tariffs, which hurt the most vulnerable developing countries.  The isolation of landlocked markets, such as Burkina Faso, had particularly marginalized them in the world trading system.  Moreover, the country’s shortcomings in economic infrastructure worked against diversification of its productive sectors and trade enhancement.  Despite recent reforms, trade in Burkina Faso had remained insignificant and uncompetitive, compared to other nations.

He stressed the need for a greater opening of markets at the regional level.  In particular, Burkina Faso would like duty-free and quota-free markets for its exports.  Such improvements were a basic requirement of interdependence, which was clearly of benefit to all.

KHUNYING LAXANACHANTORN LAOHAPHAN (Thailand), aligning herself with the Group of 77, China and the ASEAN, said that a universal, open and rules-based multilateral trading system was one of the essential instruments for the promotion of economic development and the eradication of worldwide poverty.  Thailand welcomed, therefore, the WTO “July Package”.  Despite such encouraging signs, uncertainty continued to cloud issues such as anti-dumping, the status of agricultural and textile products, intellectual property and the pandemic use of generic drugs.  Flexibility, good faith and compromise were still needed to achieve a successful conclusion of the Doha round.  Thailand hoped to see the elimination of the double-standard for domestic and foreign firms.  In the fight against HIV/AIDS, access to life-saving drugs should be guaranteed, and traditional knowledge should not be subject to patenting by foreign corporations.

She said that given the complexity of the rapidly emerging issues, which required the complete involvement of all relevant stakeholders, it was important that more interactions take place between UNCTAD and the WTO on issues related to the needs of developing countries.  An institutional relationship between the two organizations should be established.  Bilateral, regional and/or subregional free trade agreements could serve as building blocks to strengthen the multilateral trading system, if correctly designed and effectively implemented.  It was therefore important to ensure that those agreements be consistent with and contribute to the WTO’s principle of advancing trade liberalization.

GLAUDINE MTSHALI (South Africa) said that the current pattern of economic recovery was only benefiting oil and industrial raw materials, but was unable to stimulate significant African agricultural commodity exports.  The international community also continued to depend on the United States trade and budget deficits to stimulate the global economy, raising concerns about the uneven demand among industrialized nations and the potential pressures on the dollar that could lead to greater exchange rate and financial instability, negatively impacting developing countries’ growth prospects.  Despite increasing South-South trade, Africa remained on the periphery, largely due to serious structural weaknesses in its economies and commodity dependence.  Rising oil prices were negatively affecting many oil-importing countries’ productivity and competitiveness, reducing the gross domestic product of highly indebted poor countries, particularly those in sub-Saharan Africa.

Africa had committed to developing agriculture, its economic mainstay, in the Comprehensive Africa Agriculture Development Programme and to allocating 10 per cent of national budgets to agricultural development.  The Programme’s success was predicated on the success and early conclusion of the Doha round.  The negotiations on agriculture must produce a credible, early date for eliminating export subsidies and effectively reducing trade-distorting domestic support measures.  The outcome must also include a development box that would accommodate developing countries’ sensitive products and special safeguard measures, as well as provide flexibility in addressing rural development and food security.

BAKARY DEMBELE (Mali) noted that LDCs and other developing countries that depended on commodities had remained marginalized and were still vulnerable to external shocks.  Trade was the driving force growth in Mali and cotton played a crucial role.  The country was the number one African producer of cotton and more than 3 million people, or more than a quarter of its population, lived off that sector.  But because of agricultural subsidies in wealthier nations, Mali was unable to take full advantage of its capacity to produce cotton and was currently suffering its lowest production point for the past 30 years.

Achieving the Millennium Development Goals was now threatened by agricultural subsidies and the country’s inability to live from cotton, he said.  Subsidies ran counter to the rules of international trade, as defined by the WTO.  The Doha trade negotiations should strive to open up world markets and make them more equitable for the benefit of rich and poor alike.

FRANKLIN RANGEL (Venezuela) said that developing countries were increasingly required to open their markets, but developed nations’ protectionist measures continued to impede market access for developing-country exports.  That trend, coupled with insufficient foreign investment, made it impossible for developing countries to proceed with development.  The Doha and Monterrey commitments must bring about the creation of a world trade system that did not keep poor countries subordinated or impede their economic self-determination.  It was important to avoid exclusions and conditions that created obstacles to development.  Transparent management of the international financial, monetary and trade systems were essential for poverty eradication and sustainable development in developing countries.

Venezuela’s foreign policy was geared toward a new concept of economic, trade and financial diplomacy, as well as regional blocs aimed at defending sovereignty, he said.  A new world economic order must be based on the principle of participatory democracy, justice, non-intervention, solidarity and shared responsibility.  Venezuela was doing its part to integrate development strategies, foster economic growth, and deepen democracy through stronger education, health, housing and cultural services.

REZLAN ISHAR JENIE (Indonesia), speaking on behalf of the Association of South-East Asian Nations (ASEAN), said that an open, equitable, rules-based and non-discriminatory multilateral trading system was within reach if the positive spirit of cooperation and political resolve prevailed in trade negotiations.  The ASEAN called for improved market access for developing-country exports, the elimination of trade-distorting subsidies and barriers for agricultural products, as well as special and differential treatment for developing countries.

To become more competitive, ASEAN must integrate into the globalized economy through regional integration that enhanced development and emphasized the inclusive process of globalization, he said.  The ASEAN was speeding up economic integration as part of the three pillars for achieving the ASEAN Community in 2020.  It had almost completed the ASEAN Free Trade Area agreement as a step towards realizing the Community and the region had registered positive growth.  Foreign direct investment (FDI) had increased in 2003, making ASEAN one of the highest FDI growth regions.

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries (LLDCs), expressed concern over the expiration in 2005 of the quota system for textile exports by which industrialized countries import textiles and garments from developing countries.  The abolition of that system would seriously impact millions of people in LLDCs where their competitive edge was already eroding due to high trade transaction costs.  Donor countries should take steps to offset the expected negative impact.  Welcoming initial steps under consideration by the European Union, he called for a new round of WTO negotiations on market access for agricultural and non-agricultural goods focusing on products of special interests to LLDCs.  The WTO must expedite its Doha Work Programme for Small Economies, including LLDCs, as called for in the Sao Paulo Consensus.

One third of LLDCs were not WTO members, he continued, stressing the need for appropriate measures and assistance from the international community to accelerate their accession.  That process must take into account LLDCs’ individual level of development, particularly their needs and concerns due to their geographic disadvantage.  The LLDCs also underscored the importance of efficient trade facilitation.  They needed technical assistance to understand relevant WTO instruments, including Article V on freedom of transit, Article VIII on fees and formalities for imports and exports, and Article X on publication and administration of trade regulations of the General Agreement on Tariffs and Trade (GATT).

JANE HULL (United States) said that by combining an upturn in growth with a global reduction in trade barriers, the current economic expansion could be extended.  Trade liberalization was key to boosting global prosperity, as had been proved time after time.  Multilateral trade negotiations represented the best means of achieving broad-based liberalization and stronger global trade rules.  The framework agreed in July envisioned the complete elimination of agricultural export subsidies, new disciplines on export credits, a global commitment to harmonize global trade-distorting farm subsidies and substantial improvements in market access for all products.

She said that in manufactured products, which accounted for nearly 60 per cent of all global trade, nations had agreed to work toward expanded market access, broad cuts in tariffs and new work to address non-tariff barriers.  In services, negotiations would be intensified to open service markets.  In short, in Geneva last July, the world had recommitted itself to the success of the Doha round.  The WTO was the proper venue for negotiations on trade, and efforts elsewhere to recast the Doha Development Agenda or prejudge the results of the Doha round negotiations did not help, but had the potential to undermine the entire process.

CARLOS FORTIN, Officer-in-Charge of the United Nations Conference on Trade and Development (UNCTAD), said that body would endeavour to pursue all areas of work that Member States had deemed important during recent WTO negotiations, such as the accession of LDCs, the issue of commodities, countries with special needs, LLDCs, small island developing States, the emergence of a “New Geography” of international economic relations, and trade and the emergence of the South as main actor in trade and commodities.  The UNCTAD would work to complement the work of the WTO and advance the setting up of an international financial system.

MEYNARDO MONTEALEGRE (Philippines), aligning himself with the Group of 77, the ASEAN and the Cairns Group, said his country attached great importance to the creation of an international trading environment that was open, non-discriminatory, rules-based and operated on a level playing field.  Global economic processes should support national development goals and strategies.  Global economic policy-making required greater coherence and the Bretton Woods institutions and other international organizations should align their policies accordingly.  While coherence between national and international economic policies was essential, it was equally important that coherence be observed by international financial institutions in their development prescriptions.

He said that the recently concluded UNCTAD XI had reaffirmed that body’s continuing relevance as a forum of universal membership in which trade and development issues were considered in an integrated and holistic manner.  The UNCTAD should play a major role in bridging the critical link between trade –- falling under the purview of the WTO –- and the different development processes in the United Nations system.  It must therefore retain its central role in the promotion of multilateral cooperation for development.  The UNCTAD must also continue to play its role as the principal arm of the United Nations in its coordinative dialogue with the International Monetary Fund (IMF), the World Bank and other stakeholders on development issues through the Financing for Development and Economic and Social Council high-level processes.

ULADZIMIR GERUS (Belarus) said that despite steps by the majority of developing countries towards trade liberalization, the share of African and LDCs in international trade, unfortunately, continued to decline.  The conditions of their trade had worsened, complicating the creation of their competitive production and sale potential.  The WTO’s member States, therefore, should take practical steps to ensure duty-free and quota-free access to their markets for goods produced in the LDCs.  Belarus, for its part, had decided to provide unilateral trade preferences to several of those States.  Clearly, the conditions of access to the developed countries’ markets were key to the further trade and economic growth of developing countries and those with economies in transition.  It was necessary to reduce existing trade barriers and assist those countries in overcoming the hardships and high costs of integrating into the developed world’s markets.

He said that the Doha round of trade talks should create new possibilities and lead to the setting up of stable, predictable and non-discriminatory access to international markets of goods and services for all participants.  Belarus was in the process of acceding to the WTO, as part of its sustainable development strategy and a priority of its foreign economic policy.  In the negotiations, Belarus stood for setting up the obligations of the assessing countries, which would correspond to their economic possibilities and provide the opportunity to truly benefit from participation in the multilateral trading system in the future.  The United Nations system, and particularly the UNCTAD, had both the competence and experience to assist developing countries and those with economies in transition in their integration into the multilateral trading system, with due regard for their distinct national characters and development needs.

MARWAN AL-RAWI (Iraq) said that globalization had forced developing countries to adapt to a new economic environment that was moving toward more free and autonomous trade.  The international community must adopt measures to assist developing countries in the transition, including the removal of restrictions on commodities and services, to realizing a new partnership for global development.  International financial and trading institutions should provide assistance to developing countries that were heavily dependent on commodities to overcome the drop in their export earnings.

Furthermore, he continued, the world community must reform the international financial system to accommodate changes in financial flows, which undermined developing country efforts for development and economic planning.  Moreover, developed nations should provide market access to those countries’ commodities.  Iraq called on UNCTAD and the Common Fund for Commodities to provide information and analysis to help developing countries implement suitable programmes.

GARFIELD BARNWELL (Guyana), speaking on behalf of the Caribbean Community (CARICOM), said that in the past two decades CARICOM member States had pursued sweeping economic reform with high expectations of reaping the benefits of trade liberalization.  They were committed to the WTO reform process, which made special provisions to address the development needs of small vulnerable developing economies.  However, trade liberalization and the erosion of trade preferences were having severe consequences on the CARICOM nation’s already fragile economies, social stability, health and education, and would further deplete government revenues.  Those problems exacerbated the region’s economic woes, making it more difficult to attract investment and pursue relevant trade and development policies.

Special and differential treatment provisions were indispensable in enabling the CARICOM States to use trade agreements to promote trade, growth and development, he continued.  Urgent action was needed to accelerate the Doha Work Programme so that the provisions for small vulnerable economies contained in paragraph 44 of the Doha Ministerial Declaration could become operational.  The General Agreement on Trade in Services (GATS), which called for progressive liberalization and incorporated the basic principles of the WTO of non-discrimination, Most-Favoured-Nation treatment and transparency, could have beneficial, as well as adverse consequences for small vulnerable economies.  In that regard, multilateral cooperation was needed on several sensitive issues such as human development, the possible adverse impact on employment, migration, cultural penetration and policy space intrusion.

TAREK ADEL (Egypt) stressed the need to enhance coherence and consistency in the international economic system and to place development at the centre of its agenda.  Enhanced coherence was needed between national development strategies and international obligations and commitments to create an enabling economic environment for development.  Equally vital was the need for “policy space” in pursuing development strategies, with each country evaluating trade-offs between the benefits of accepting international rules and commitments imposed by the loss of policy space.

He said the Doha Work Programme should strive to increase access to developed-country markets to ensure developmental gains from the international trading system; make special and differential treatment an integral part of all negotiations; draw up ways to eliminate export subsidies; adopt appropriate tariff peaks and tariff escalation for products of export interest to developing countries; and address the volatility of world commodities prices, with a view to assisting commodity-dependent developing countries.  It should also ensure the reduction or elimination of high tariffs, tariff peaks and tariff escalation, and acknowledge that technical assistance and capacity building to modernize customs procedures and facilities was vital for developing countries.

TSEDAY JEMANEH (Ethiopia) agreed with the Secretary-General that the nexus between trade, commodities and poverty reduction must be given special attention.  In most commodity-dependent developing countries, trade was not serving its purpose as an engine of growth because those countries depended on limited primary products with weak demand growth, volatile prices and long-term decline in their trade terms.  Besides deficiencies in infrastructure, the lack of modern technology and access to market information further aggravated the problem.  Ethiopia called upon development partners, particularly developed countries, to redouble their assistance to commodity-dependent developing countries to enable them to overcome commodity-related problems and be competitive in the international market.  The new WTO framework agreement was a step forward.  The parties involved must resume talks on the Doha Work Programme so that a rules-based, non-discriminatory and development-oriented multilateral system could be established.

Reform of the international trading system per se, however, could not be a panacea for the problems of developing countries, he said.  The international community should give financial and other trade-related technical assistance to complement developing countries’ efforts to integrate more effectively into the global trading system.  The successful completion of UNCTAD XI and the consensus reached there would have an added value for the ongoing trade talks.  Towards UNCTAD’s efforts to help identify, design and implement new policy approaches to commodity-related development problems, Ethiopia welcomed the establishment of a task force on commodity issues at the Sao Paulo Conference.  Concerning Ethiopia’s accession to the WTO, he urged its members to faithfully implement the 2002 agreed guidelines to facilitate and accelerate the accession of the least developed countries.

SERHII SAVCHUK (Ukraine) underscored the importance of ensuring that the global trading system worked to the advantage of all countries and of sustained efforts to create stable, predictable and non-discriminatory terms of access to international goods and services markets for all countries, including economies in transition.  Ukraine called for the expansion and preservation of open markets through improved multilateral trade rules, enabling transition economies to benefit from trade liberalization and to better integrate into the global economic system.  The expansion of transition and developing markets would likely result in economic growth and positively influence the global economic system.

Expressing support for the framework agreements made by the WTO General Council, he said the challenge ahead was to harness that momentum to achieve a successful outcome to multilateral trade negotiations.  The UNCTAD was the focal point within the United Nations for the integrated treatment of trade and development and should work closely with the WTO and the International Trade Centre, as well as better coordinate the global development agenda to avoid duplicating integration efforts.

BHAGWAT SINGH, International Union for the Conservation of Nature and Natural Resources, noted that coherence in international policy and law was a key function of the United Nations and encouraged the Organization to achieve coherence in the areas of trade and sustainable development in successfully negotiating the Doha trade round.  Sustainable development must be reflected and fully integrated into programmes of the United Nations, the Bretton Woods institutions and the WTO.

He strongly encouraged the United Nations to further its efforts to enhance communication, cooperation and coherence among all institutions working on issues related to trade and sustainable development.  The WTO members should carry those considerations into the trade area and work for a constructive resolution of the controversy over the observer status of international environmental organizations in order to ensure that environmental considerations were brought into discussions at the WTO.

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