UNCTAD INTERACTIVE SESSIONS FOCUS ON ASSURING GAINS FOR DEVELOPING COUNTRIES

FROM INTERNATIONAL TRADING SYSTEM

Participants Explore Policy Options, Strategies to Support Competitiveness

(Received from a UN Information Officer.)

SÃO PAULO, 16 June -- Assuring gains for developing countries from the international trading system and trade negotiations was the focus of two interactive sessions, as the eleventh session of the United Nations Conference on Trade and Development (UNCTAD XI) continued its work in São Paulo, Brazil, today.

Exploringpolicy approaches and the Conference's contribution to the implementation of the Millennium Development Goals, including the commitment "to an open, equitable, rule-based, predictable, and non-discriminatory multilateral trading and financial system", participants in the debate agreed that the fundamental challenge was to design an effective international trading system, that would bring commercially meaningful and measurable gains for developing countries.  Also considered were options and strategies to support developing countries' competitiveness in the most dynamic sectors of international trade.

Putting an end to uneven and inequitable development was in the interests of both developing and developed countries, today's first keynote speaker, Uganda's President Yoweri Kaguta Museveni, said.  It would be good for the whole world economy if 800 million Africans, 1 billion Indians, 1.3 billion Chinese, hundreds of millions in Latin America and 200 million Indonesians consumed as much as the population of the United States.  That would be a win-win situation, which would replace the present win-lose situation.

All efforts must be based on the main three priorities -- market access, value addition, and infrastructure development, he said.  With that emphasis, African countries could develop their autonomous capacity to deal with all other issues, including education, health and research.  In order to benefit from the international trading system, Africa and her allies must expunge, once and for all, the practice of exporting raw materials.

"How, then, do we negotiate?" he asked.  Recently, the United States had given special treatment to sub-Saharan Africa through the African Growth Opportunities Act (AGOA), and the European Union had launched its "Everything but Arms" initiative.  Helping sub-Saharan Africa to catch up, those arrangements should be expanded through 2015.  Africa needed more affirmative action. Its non-Western partners should also open their markets to African value-added goods.  It was necessary to examine whether that should be done on a reciprocal or non-reciprocal basis.  To promote meaningful international trade, it was also necessary to stop Africa's massive loss of value and jobs to the West.

Today's second keynote speaker, Leonel Fernandez Reyna, President-elect of the Dominican Republic, was among the high-level participants who agreed that underdeveloped countries had a great potential through the use of technology and development of infrastructure.  Emphasizing the need to eliminate poverty in order to achieve further expansion of the world economy, he pointed out that poor countries were increasingly turning into markets receiving exports from the developed world.  The new dimension of international trade was a new integration and interdependence of the developed and developing worlds.

He added that the world was moving from a unilateral trade system to a system of trade on a reciprocal basis.  Countries needed to be prepared to face the new challenges in that respect, moving from labour- to capital-intensive processes.  Today's double agenda before the developing countries required them to address all the tasks of the industrial revolution and move on to the technological and science revolution.  That would place them in a position to accelerate their economic growth.

Expected to contribute to intergovernmental consensus-building and provide policy insights based on development experiences and approaches, the debate generated great interest with participation of some 25 ministers and vice-ministers from around the world, high-level government officials, and representatives of several regional and civil society organizations.

Speakers shared past lessons and national experiences and commented on the state of today's world trade system, making proposals that could improve it.  Among the questions addressed today were trade liberalization; trade policy reforms; social, financial, monetary, technological and labour market policies; and the relationship between the capacities and obligations of countries.

With the multilateral trading system at crossroads following the setback at the Fifth World Trade Organizations (WTO) Ministerial Conference in Cancun last September, speakers agreed that new approaches to move the stalled multilateral trade negotiations were needed, not only on behalf of WTO members, but also in such forums as UNCTAD.  The negotiations needed to address such core market access issues as agricultural subsidies, expansion of the manufacturing base and liberalization of trade in goods and services.  Also of great importance to all participants were market entry issues, including tariff and non-tariff barriers, concentrated market structures and sanitary and environmental standards, as well as country of origin regulations.

At the same time, speakers expressed concern over the rate of implementation of the Millennium Development Goals and made clear that "the small club" of countries that met the target of devoting 0.7 per cent gross national income to official development aid should become less exclusive.  It was said that trade needed to be mainstreamed in poverty-reduction strategies.  Also needed were infrastructure, technical assistance and national development agendas.  That was the primary responsibility of individual governments, but donors could help them build up their capacity.

Following the keynote presentations and an address by the Secretary-General of UNCTAD, Rubens Ricupero, statements were made by ministerial-level speakers from the United Republic of Tanzania, Sri Lanka, Singapore, Netherlands, Bangladesh, Pakistan, Iran, Mauritius, Republic of Korea, Uruguay, Sudan, Guyana, Morocco, Malaysia, Indonesia, Zimbabwe, Zambia, Mozambique, Barbados, Nigeria, Sweden, Kenya, Armenia, and Portugal.

Others speaking on behalf of their Governments were the representatives of India, Mexico, Gabon, Nicaragua, Thailand, Cuba, New Zealand, Italy, Canada, Nepal and Venezuela.

Also speaking were representatives of the African Union and Third World Network.

Assuring Development Gains from International Trading System

and Trade Negotiations

The discussion was chaired by Kenya's Vice-President, Mukhisa Kituyi and launched by the President of Uganda and the President-Elect of the Dominican Republic.

Keynote Addresses

In his keynote address, the President of Uganda, YOWERI K.MUSEVENI, highlighted the role of Brazil as the biggest exporter of coffee in the world.  Uganda was the fourth.

He said that two fundamental conflicts since time immemorial had been the struggle of man with nature and man with man.  The capriciousness of nature caused floods and droughts that affected man, who faced serious and diverse challenges to his survival and development.  The second greatest challenge was man's desire to oppress others.  Instead of using every opportunity to develop capacity to deal with problems to everybody's mutual benefit, some turned those opportunities into advantages for their own use.  That bred parasitism instead of cooperation.  It was important to work together to confront those challenges and tame egocentrism.

During yesterday's meeting on bio-trade, his country had advocated an extension of AGOA -- an African Growth and Opportunity Act, he continued.  That meeting was most welcome.  African people had processes that were not known to the world even today.  Many cultures, for instance, were not aware that one of the sweetest juices in life was banana juice.  The Great Lakes region, especially Uganda, had the unique technology of extracting that juice, and Uganda was in the process of commercializing it.  Many cultures in the world did not know why Africans grew so tall and excelled in Olympics.  That was partly on account of the foods they ate.

In trade, it was necessary to see how assuring development gains from the international trading systems and trade negotiations could be equitably achieved, he continued.   The current size of world trade in terms of dollars was $5,473 billion, and Africa's share in that was only some $112 billion.  That imbalance resulted partly from the trade barriers erected over the years by the Western countries -- Africa's "development partners".

Although it was not uncommon to find that the cocoa beans could cater for the European market at 0 per cent tariff rate, he said that during his recent visit to China, he had raised the issue of 0 per cent tariffs for raw coffee beans, as opposed to a high 53 per cent rate for processed coffee from Africa, with the President of China who had promised to resolve that issue.  That situation could not have persisted without the indifference or ignorance of the Africans.

All efforts must be based on the main three priorities:  market access, value addition, and infrastructure development, he said.  With those emphasized, African countries could, in a short time, develop autonomous capacity to deal with all other issues, including education, health, research and so on.  In order to benefit from the international trading systems, Africa and her allies must expunge, once and for all, the practice of exporting raw materials.  For at least 110 years, that had meant that for every kilogramme of coffee, Africa donated $7 to outsiders.  Africans were, therefore, centuries-old donors to the rest of the world.  They had donated slave labour to emancipate the West from poverty and underdevelopment.  During the colonial and post-colonial periods, they had been donating money and jobs to the West.

To promote meaningful international trade, that massive loss of value and jobs to the West by Africa must stop, he insisted.  Africa needed to add value to most of its raw materials.  Largely pre-capitalist economies of Africa also needed to be conscious of the three steps needed to achieve a social and economic transformation -- achieving commercial production, adding value to as many of its raw materials as possible, and developing products of the intellect.  The first two stages were within reach with appropriate stimuli to the economy, such as market access.

Africa needed the international market, because it was large, fully developed in terms of consumption potential, and well organized.  The United States had a population of 300 million, and Africa had a population of 800 million.  However, 300 million United States citizens consumed 22 times more than the whole of Africa.  That was not because United States citizens had better appetites for consumption -- it only meant that they had incomes, because they had jobs as a consequence of being part of the economy that was fully monetized that added value to a wide range of raw materials.  The United States also had a high degree of products generated by the intellect.

"How, then, do we negotiate?" he asked.  Recently, the United States had given special treatment to sub-Saharan Africa through the African Growth Opportunities Act (AGOA).  The European Union had launched the "Everything but Arms" initiative.  Helping sub-Saharan Africa to catch up, those arrangements should be expanded up to 2015.  Africa needed more affirmative action.  Its non-Western partners should also open their markets to African value-added goods.  It was necessary to examine whether that should be done on a reciprocal or non-reciprocal basis for some agreed time to give black Africa time to catch up.

The time had come to end the uneven development of the world, he concluded.  Even development was in the interests of the Group of 8.  If the 800 million Africans, the 1 billion Indians, the 1.3 billion Chinese, the hundreds of millions in Latin America and 200 million Indonesians consumed as much as the Americans, that would be good for the whole world economy.  That would be a win-win situation instead of the present win-lose situation.

The second key speaker was the President-elect of the Dominican Republic, LEONEL FERNANDEZ REYNA, pointed out poverty as one of the most important problems in the world.  However, there had been much progress in international social thinking, and the international community was redefining the concept of development.  Apart from greater interdependence in a globalized world, there was also growing economic integration.  The poor countries were increasingly turning into markets receiving exports from the developed world.  That gave a new dimension to the challenges of poverty and development.  Poverty needed to be eliminated for the world economy to expand.

It was not enough to have the will, he continued.  Developing countries needed to prepare national strategies towards poverty eradication within the context of development.  When crafting those strategies, they needed to take into consideration the global, regional, national and local aspects of the issue.  New markets were needed to ensure continued world economic growth.  Committed leaders seeking their countries' development should also strive to strengthen democracy and respect for rights, constitutional guarantees and the rule of law.  Also needed was a foreign economic growth model -- a policy designed to eliminate poverty and create social equality, jobs, education and development of human capital.

Turning to international trade and development potential, he said that most countries with emerging economies had traditionally been exporters of commodities.  His country was now moving from exporting commodities to services export.  Among the priorities, he listed creation of employment opportunities through the establishment of local assembly lines and free trade zones, as well as markets with preferential tariffs.  The countries of the Caribbean were also now moving from a unilateral trade system to a system of trade on a reciprocal basis.  Countries needed to be prepared to face the new challenges in that respect, moving from labour- to capital-intensive processes.  Today's double agenda before the developing countries required them to address all the uncompleted tasks of the industrial revolution and move on to the technological and science revolution.  That would place them in a position to accelerate their economic growth.

The situation was asymmetrical, he continued, but there was no doubt in his mind that underdeveloped countries had great potential through the use of technology and development of infrastructure.  The new development paradigm was not linear, for promotion of international free trade was linked to domestic problems.  Among the main challenges, he mentioned subsidies, market access, tariffs and the need to increase purchase capacity in developing countries.  Developed countries today sought greater linkage to developing countries contemplating relics of protectionist policies, which included agricultural subsidies, on the one hand, and the need to redefine their relations with the developing world, on the other. 

Regarding the trade negotiations, he said that they reflected the conflicting interests of their participants.  For example, the Southern Common Market (MERCOSUR) for Brazil and Argentina meant a share of the market that needed to be protected by the countries of South America.   International trade in its liberalized and open form was truly an opportunity for all countries, but to truly take advantage of those opportunities, each country needed a national development strategy based on competitive values.  An export-oriented attitude, increased exports and a stable macroeconomic environment were among the conditions required.

Other Statements

Following the keynote addresses, the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), RUBENS RICUPERO, opened the ministerial dialogue hailing the statements from the keynote speakers.  He said that the Conference had heard two distinct perspectives from countries at different stages of economic development.  They had both been presented an extraordinary exposition of the main themes the Conference was tackling -- not just trade, but development coherence, market access barriers, supply-side issues and the need to add value to developing world products.

The very meaning of UNCTAD was to contribute to debate, to promote discussion and push for a meeting of minds on just such critical issues, he continued.  The UNCTAD was proud of being considered an organization working on behalf of the poor.  Indeed, the Conference stood for bringing to light the "richness of the poor" and using the experiences of developing countries and transition economies as tools to find solutions, to promote fairness, and ensure sustained development.

JUMA NGASONGWA, Minister for Industry and Trade of the United Republic of Tanzania, said governments needed to be clear about their priorities when drawing up policy options and strategies to enhance competitiveness in global markets.  Their efforts at all times should focus on the need to eradicate poverty.

Highlighting Tanzania's experience as a least developed country, with 19 per cent of its people unable to meet nutritional requirements and 36 per cent unable to meet basic needs, he said that those and people like them were the very ones that needed to be targeted when governments gathered to talk about global trade and market access.  He said that studies on including the poor in international trade schemes had revealed the critical necessity of targeting the sectors on which they depended.  "Inclusion of the poor demands that we improve and build upon all the elements that will enhance their participation and thus assure them of development gains from international trade."

JEYARAI FERNANDOPULLE, Minister of Trade, Commerce and Consumer Affairs of Sri Lanka, said global efforts to ensure a level-playing field in the multilateral trading system should be focused on the needs of developing countries, enhancing developing-country products and improving market access.  And while the necessity of meeting those needs had been emphasized in the Doha Development Agenda, he warned that negations on completing that critical accord needed to be based on realistic assessment of current market realities.  Still, Doha, which had stressed that developing countries' interests should be placed at the heart of the development agenda, was the best way to ensure that the desired gains were achieved for all.

VIVIAN BALAKRISHNAN, Minister of State, Ministry of Trade and Industry and National Development of Singapore, said globalization was inevitable, and trade was the "passport" for all nations to participate in that process.  Free trade was a necessary, but not sufficient, condition for national success -- local factors were just as important in determining needs, accelerating growth and promoting development.

Reform must begin at home, with solid institutions, good government fiscal policies, and social and political stability, he said.  Individual countries needed to invest in their human capital so that they could better manage the dangerous currents of globalization.  This is where developing countries still needed the help of their developed partners and United Nations agencies to enhance information exchange, research capacities and access to new technologies.  He added that policies and trade strategies must conform to the development road maps of specific countries.

AGNES VAN ARDENNE-VAN DER HOEVEN, Minister for Development Cooperation of the Netherlands, said that Dutch official development assistance (ODA) in 2003 had represented 0.81 per cent of the gross national income (GNI).  She would love to see the small club of countries meet the target of 0.7 per cent GNI becoming less exclusive.  Many donors had committed themselves to increasing their ODA and had set concrete interim targets.  Although the progress made to date was welcome, it was obvious that more needed to be done.  Development cooperation was not just a matter of more money, but also of effective policies.

The needs and interests of developing countries should be at the heart of the Doha Round, she continued.  Among the needs, she listed trade liberalization, market access and fair rules of play.  Both trade barriers and subsidies harmed the trading interests of developing countries.  Many of those nations were understandably concerned about their competitiveness in the global economy, worried about preference erosion in export markets as a consequence of lower most favoured-nation tariffs.  She made a special plea for measures and regional trading arrangements to improve market access for the least developed countries and small vulnerable economies.

She also said that the European Union "Everything but Arms" initiative should be copied by all developed countries. Similar concessions should be provided by developing countries in a position to do so.  All that should be bound up in the World Trade Organization (WTO).  Use of existing preferential access could be much improved if all preference-giving countries were to relax their rules of origin.  Quota-free trade after 1 January 2005 would hit the least developed countries hard.  Trade needed to be mainstreamed in poverty-reduction strategies.  The pro-poor trade policies and trade integration needed to be sequenced carefully.  Also needed were infrastructure, technical assistance and a broad national "behind-the-border" policy agenda.  That was the primary responsibility of individual governments, but donors could help them build supply-side capacity and create the right environment for the private sector.

ALTAF HOSSAIN CHOWDHURY, Minister of Commerce of Bangladesh, said that all partners were supposed to gain if markets were truly free and forces of competition were let loose.  In reality, for those economically strong, free trade was politically viable only if it was backed by effective job-creation measures and a strong domestic social safety net.  For the weak, free trade was a prescription they had to accept even without the safety nets.  Bangladesh had been ranked fourteenth among the top 20 countries paying highest tariffs while exporting to the United States market.  On average, that country had imposed a 14 per cent duty on all Bangladeshi products in 2003.

The Uruguay Round Agreements had fundamentally changed the multilateral trading regime and the manner in which trade could affect development, he continued.  The Doha Work Programme had placed the interests of developing countries at its head, yet a reality check after nearly three years would indicate that there was hardly anything "developmental" there.  It was interesting that the country that had made great leaps in trade in the past decade had been outside the Multilateral Trading System (MTS).  Instead of concentrating on "at-the-border" issues, the MTS had moved into "behind-the-border" ones.  The less it interfered with domestic policy issues, the greater would be the policy space and health of the trading system.  Countries should be allowed to undertake commitments according to their capacity, and not with reciprocity.  Exemption from tariff reduction and other commitments could give them some breathing space to integrate into the MTS.

The greatest benefits from trade would come if both developed and developing countries allowed temporary movement of labour across countries, he said.  Countries like his required special treatment and opportunities, as they did not have many products to trade.  It was necessary to immediately address all non-tariff barriers to their exports.  It was only through the elimination of tariff peaks and trade-distorting domestic support and export subsidies that developing countries could get their fair share in agriculture.  Developing countries also needed intervention in their productive capacity to develop existing facilities and build a new niche.  That was an overwhelming task, but not impossible.  Not all solutions were within the four walls of the WTO.  There were also such measures as preferential access given to least developed countries.  However, conditions that accompanied such schemes made them unusable for some countries.  For example, stringent rules of origin requirement were an obstacle.

ABDUL HAFEEZ SHAIKH, Minister for Investment and Privatization of Pakistan, advocated a development-centred approach to trade, rather than a trade-centred approach to development.  Critical towards ensuring development goals were national policies complemented by an enabling international environment.  By creating new opportunities, an open, equitable, rule-based, predictable and non-discriminatory multilateral system responsive to the needs of the impoverished and marginalized would serve to reduce poverty.  Coherence between international trading and financial systems was essential.

Bilateral and regional arrangements could not form an alternative to a multilateral trading system responsive to the needs of all stakeholders, he continued.  A cooperative approach to development called for the revival of the Doha Round in a manner that would ensure an early harvest of the development content of the Doha Work Programme.  Recent signals were positive and encouraging.  Elimination of gross inequalities in agricultural trade, with particular reference to the $350 billion in export and other agricultural subsidies, was critical towards development gains from the multilateral trading system.

Urgently needed was the elimination of tariff peaks and tariff escalation against the most competitive exports of the developing countries, such as textiles and clothing, he said.  An integral part of the WTO agreement was special and differential treatment for low-income countries.  Among other needs, he listed visible commitment towards capacity-building through the creation of an international fund under the joint auspices of the WTO, UNCTAD and the United Nations Development Programme (UNDP).  Market penetration, diversification and value addition constituted the three pillars of his country's export strategy, which had resulted in a sustained increase in exports.

MOHAMMAD SHARIATMADARI, Minister of Commerce of Iran, said investment in developing countries should be based on essential needs and channelled towards real development, particularly to enhance development, markets and human resources.  The world economic environment must be governed by a set of transparent and non-discriminatory principles and rules.  Developed countries' attitudes towards the developing world and its products should also change, he continued, stressing that industrialized nations employed neo-protectionist measures and imposed obligations on poor countries and worked against equitable development.

Moreover, the global community should view international cooperation on global trade from a fresh perspective, avoid narrow views of developing-country capacities and promote knowledge sharing and access to technology so as to make developing countries' contributions more balanced and equitable and to enhance their trading positions.  The multilateral trading system was faced with myriad gaps and insufficiencies, particularly regarding macro-policies.  The needs of developing countries were being sidestepped or ignored.  Only a return to multilateralism could save the global trading system, reinvigorate stalled negotiations and prevent the further marginalization of developing countries.

JAYA KRISHNA CUTTAREE, Minister for Foreign Affairs, International Trade and Regional Cooperation of Mauritius, said everyone in the trade community wished to use globalization to bring sustained development and prosperity to all people.  To do that, stakeholders needed to act in one accord and spare no effort to ensure the achievement of the Millennium Development Goals. But the advantages of globalization were too far away for many, the risks too real, he said.

So, the calls for global democratic reform and improving institutional frameworks were genuine, he continued.  International trade rules and trade negotiations strategies should be based on democracy and understanding so that opportunities would be available for everyone.  Developing countries must participate equally in elaborating trade agreements, particularly those in the area of agriculture.  Rural development and food security should also be a top priority.  The issue of supply-side enhancement was also critical.  The priority was to create freer trade and create a trading system in which the primary beneficiaries were developing countries.

HWANG DOO-YUN, Minister of Trade of the Republic of Korea, said that trade had lifted his country out of poverty and was still driving its growth.  One of the major advantages of the Republic of Korea's exposure to the international marketplace was exposure to competition, which had prompted the Government and national business traders to develop sound market systems.  Trade had also opened the way for dynamic growth of the Korean economy.  Moreover, as market efficiency improved, more investment had poured into the country.

Another lesson was the importance of the role of government, particularly in the early stages of development when domestic markets had just begun to emerge.  The Government had been able to steer investment and identify areas that were ripe for growth.  But when financial instability struck his region in the 1990s, it had become clear that ties between government and trade stakeholders could lead to market distortions.  The challenge, therefore, was to find the right balance between the roles of government and the market.

DIDIER OPERTTI BADAN, Minister of External Relations of Uruguay, said his country's growth and expansion were linked to trade.  But in order to keep generating jobs, to keep diversifying, to remain competitive and to eradicate poverty, Uruguay, like many small countries, must have a fair and equitable position in the international marketplace.  It must also increase exposure of its export products.  He went on to say that as stakeholders moved to reform the international trading system, they must also recognize UNCTAD's importance and support efforts to strengthen the organization's analytical capacity, its market monitoring functions, and its relationship with national and regional trade agencies.

ABDELHAMEED MUSA MOUSA KASHA, Minister for Foreign Affairs of the Sudan, said his country was committed to the achievement of the Millennium Development Goals and the Programme of Action for the Least Developed Countries and the Doha Declaration.  The Government had adopted an array of policies to promote development and free the country from trade restraints based on the objectives agreed in those important international accords. It had also moved ahead with privatization schemes, as well as liberalization of internal and external trade and investment.

He said that, for the Sudan, the restoration of peace was seen as a major way to ensure that participation, particularly with the WTO.  The Sudan supported a rules-based multilateral trading system.  It also supported the eradication of agricultural subsidies and trade barriers that created constraints on trade in products form the developing world.

Interactive Session on Policy Options and Strategies to Support

Developing Countries' Competitiveness

CLEMENT J. ROHEE, Minister of Foreign Trade and International Cooperation of Guyana, addressed "a scandalous situation" under which an unjust economic order deprived developing countries of huge profits.  That was an order where developing countries financed industrialized countries with capital outflows of more than $500 billion in payments -- an equivalent to six Marshall Plans to rehabilitate Europe after the Second World War.  A financial plan was needed for the developing countries to overcome the serious development deficiencies affecting their peoples.

Regional integration and development were an integral aspect of the issue under discussion, he continued.  Another priority was the question of adequate resources.  For developing countries to benefit from trade, it was necessary to ensure that they received adequate assistance.  What was needed at the global level was the will to improve the trading system, improve the supply side and build infrastructure.  It was necessary to make sure that preferential arrangements were maintained for a period of time to facilitate development.

MUSTAPHA MECHAHOURI, Minister of Commerce of Morocco, said that for his country, external trade played a significant role, representing an integral part of its development strategy.  Morocco had concluded a number of agreements, both bilaterally and regionally.  His Government believed that continued globalization of international trade would strengthen the country's competitive capacity.  However, its exports continued to face tariff and non-tariff barriers.

Like other developing countries, Morocco had sought to have its concerns placed at the centre of attention at the Doha Round negotiations, he continued.  There needed to be considerable improvement of access to international markets of developing countries' agricultural products.  Among the issues of key importance, there was also the question of special and preferential treatment.  Developing countries had genuine potential, and, to increase the use of trade preferences, it was necessary to make them more stable.  The list of beneficiary countries should be expanded.

DATUK AHMAD HUSNI M. HANADZLAH, Deputy Minister of the Ministry of International Trade and Industry of Malaysia, listed measures to create a more favourable environment for exports, incentives to promote investments through removal of barriers and promotion of new technology among his Government's development efforts.  Malaysia was developing its human capital and trying to improve its workforce.  There was emphasis on the culture of creativity and the development of a knowledge economy.

Regarding the role of the Conference, he added that UNCTAD had the capacity to analyse and formulate policy options.  Its contribution could make a significant impact on the prospects of developing countries in the multilateral trade system.

SUSANTO SUTOYO, Deputy Minister for Foreign Affairs of Indonesia, said that while belief in trade and the promise of prosperity from greater liberalized trade had led many developing countries to implement market-oriented reforms in line with developed countries and the WTO, experience had shown that there were wide gaps between that promise and reality.  The multilateral trading system had marginalized developing countries and income inequities between the North and South continued to grow.

A key concept for developing countries in their endeavours to implement development strategies was the concept of "policy space", since there was no universal trade and development approach that could be applied to all countries.  Appropriate flexibility must be provided so that developing countries could implement policies that catered specifically to their respective needs, while, at the same time, were in line with international trade norms.  He went on to highlight the importance of international support measures, as well as the pivotal role transnational corporations played in ensuring that developing countries could fully participate in dynamic and new sectors.

K.V. MANYONDA, Deputy Minister, Ministry of Industry and International Trade of Zimbabwe, said his country supported multilateralism and subscribed to its virtues and promises.  Like many other developing nations, Zimbabwe accepted that it could trade itself out of poverty and into sustainable development.  But whether it was by ill-will or habit, it was in agriculture, the one place where poor countries possibly had a competitive advantage, that Zimbabwe faced the stiffest resistance from its development partners.

Ministers of trade and industry must keep the needs of developing countries at the top of the global development agenda so that efforts to achieve other international commitments -- such as those outlined in the Millennium Development Goals -- were not offset by their struggles to compete in an unfair international trading system.  The trading system should not dictate polices but promote true partnership, he said, calling on "old and new friends" to join hands and create trade policies that were sustainable and realizable for the benefit of the world's youth.

DAVISON MUPATWA CHILIPAMUSHI, Permanent Secretary, Ministry of Commerce, Trade and Industry of Zambia, said the inexorable tide of globalization must be managed and used as a tool for developing countries to open the way to growth and prosperity.  It was important that the capacities of the world's poorest countries -- particularly those vulnerable to external shocks -- be enhanced so they could take advantage of globalization, particularly in the area of information and communication technologies and trade.

The participation of Zambia and other developing countries in international trade negotiations should result in the creation of a system and policies, which accelerated growth, promoted enhancement of domestic goods and services and increased competitiveness.  In order to maximize the benefits of international trade, policies must reflect the national realities of specific developing countries.  Attention must be paid to supply-side management and upgrading and South-South cooperation, to strengthen weaker economies at the regional level.

SALVADOR NAMBURETE, Deputy Minister of the Ministry of Industry and Trade of Mozambique, said that potential gains from further eliminating trade barriers could grow up to $680 billion a year, but only one third of that would go to developing countries.  Benefits of liberalization reforms had been limited for his country -- the trade balance had not improved substantially, and the levels of poverty remained high.  Mozambique and other least developed countries and low-income countries would gain most from agricultural liberation in developed countries, but that was being denied by high subsidies and other market-distorting policies.

Equally important for global growth prospects and strengthening the MTS was the positive outcome of the Doha Work Programme, he continued.  The UNCTAD played a critical role in raising developing countries' understanding of trade issues.  It could also identify ways for them to enhance their productive capacities and take full advantage of the duty- and quota-free access granted to them.  His Government saw a clear distinction and complementarity between UNCTAD and the WTO.  UNCTAD's independence and revitalization were important for trade analysis and formulation of views and policies that would promote trade and national policies focusing on job creation and poverty reduction through trade.

Full reciprocity under the WTO entailed high costs, he added.  It was necessary to work on a new definition of special and differential treatment rules, and he called upon developed countries to transform their best intentions into concrete measures.  Developing countries needed guidance not only in terms of whether Economic Partnership Agreements (EPAs) were compatible with WTO agreements, but also on what the trade and development gains of EPAs would be.  That was an area where UNCTAD could assist least developed countries tremendously.

EDWARD B. RUGUMAYO, Minister of Tourism, Trade and Industry of Uganda, said that effective development had to take into account market forces.  Effective market access could be pursued within the framework of the Doha agenda.  High tariffs and changing regulations and standards in developed countries threatened developing countries' exports.  Multilateral trade negotiations could bring equitable gains, but efforts should be directed at refocusing work to achieve better distribution of gains.

Building and enhancing the developing countries' development basis and technology skills would improve the situation of poor nations, he continued.  Domestic direct investment would generate employment.  Sustained economic growth was a prerequisite for sustainable development if development policies were directed at the eradication of poverty.  It was also necessary to address the issue of the prices of basic commodities.  In that connection, he commended UNCTAD for providing constant help to the developing countries, assisting their integration into international trading system and providing assistance.

KERRIE SYMMONDS, Minister for Foreign Affairs and Foreign Trade of Barbados, said that his country's contribution to the world trade amounted to less than 0.01 per cent.  However, his Government believed that participation in the international trade system could create new avenues for the upward economic mobility of the population.  As a country with gross domestic product (GDP) smaller than that of a transnational corporation, how could Barbados meaningfully integrate into the MTS and achieve the benefits of sustainable growth and poverty alleviation?  It needed policies directed in the best interests of its citizens.  It also had to benefit from preferential arrangements and dismantlement of barriers.  At the same time, the MTS must recognize that, for many developing countries in the Caribbean, the tariff at the port of exit was a significant source of revenue.

Barbados suggested that market access should be provided to poor nations in the areas of particular interest to them, he said.  The failure of the multi-stakeholder trade negotiations had served to retard development opportunities for countries like Barbados.  Among the most important issues, he listed removal of immigration regulations, insisting that security was rapidly becoming one of the most significant non-tariff trade barriers.

Turning to the objectives of UNCTAD, he said that it had a fundamental role to play in the advancement of developing countries' efforts to gain access to markets, take advantage of the international trade system and build their capacities.  Its studies could help countries to anticipate trends in such areas as movement of jobs and market opportunities.

ADAMU DANJUMA IDRIS WAZIRI, Minister of Commerce of Nigeria, said that the current trading system had brought about dislocation and marginalization for many developing countries.  Therefore, the concerns of developing countries should be placed at the centre of the international agenda.  Policies should be created that promoted not only trade but development, as well.

Fair and open policies should be set out for the benefit of developing countries that were largely struggling to cope with the huge costs of trade liberalization schemes while, at the same time, trying to achieve other important social development gains like poverty alleviation.  He said there was not much to cheer about as trade negotiators looked to return to talks on the Doha Development Agenda.  The issue of agriculture, which he believed was really at the heart of the talks, deserved special attention.  He added that while trade talks could be used as building blocks for developing countries, they should not be used to introduce standards or norms agreed at global forums.

LEIF PAGROTSKY, Minister of Industry and Trade of Sweden, said it appeared that the multilateral trading system was being held hostage by "old" attitudes and opinions.  Somewhere along the way, the broader picture got lost.  For example, rich countries spent six times more on farm support than on aid.  Also, studies had shown that large percentages of development resources were wasted on burdensome, overly bureaucratic and non-transparent trade procedures, and with the service industry now recognized as the market's fastest-growing area, few countries had made any progress in developing that field domestically.

While WTO rounds were no quick fix, they presented one of the only opportunities for major change.  "It is up to us to make real progress or keep the status quo", he said, "it is an active political choice, made by us, not by destiny."  Nevertheless, WTO rounds gave no insurance about outcomes, and there was no question that new rules needed to be more development friendly.  But once those rules were in place, it was up to all countries to ensure that they yielded fair and equitable results.  Since corruption ate up considerable amounts of resources earmarked for promoting development, it was clear that domestic reforms went hand in hand with the modernization of the global trading system.

MUKHISA KITUYI, Minister of Trade and Industry of Kenya, said it was important to contrast the performance of countries that had been successful at trade during the past two decades and those that had not.  A study of the geography of the current trading system revealed that the infrastructure needed drastic changes.

Highlighting developing countries' relationships with the European Union, he said that, at various times or in various forums, negotiations with the Western economic powerhouse could yield different results.  Often, the reciprocal trade demands placed on developing countries appeared to change based only on the countries' "grouping" or classification for those particular talks.

GAGIK VARDANYAN, Deputy Minister of Trade and Economic Development of Armenia, spoke about the latest developments in his country, which was in the process of transition to the market economy.  The problems that were hampering Armenia's economic growth included its landlocked situation and the loss of its traditional markets as a result of the collapse of the Soviet Union.  Enterprise and land reforms had led to private sector growth.  Some qualitative changes in the external trade sector had occurred in 1998-2003 as a result of foreign trade expansion, in particular, with developed countries.  In 2003, Armenia had become a member of the WTO.  Among the country's priorities, he listed improvement of competitiveness and attraction of investments.

FRANQUELIM ALVES, Secretary of State, Deputy Minister of Economy of Portugal, said that rapid growth of multilateral trade was of great benefit to many economies.  Greater market access, implementation of WTO agreements, effective implementation of special and preferential treatment, and greater technical assistance were among the main priorities of the international community in today's world.  It was essential to reaffirm the conclusions and decisions of major recent economic conferences and increase efforts towards regional integration of developing countries.  It was also necessary to support South-South cooperation and trade.  Trade liberalization was one of the fundamental engines of sustained growth.

It was the responsibility of the WTO and UNCTAD to promote joint efforts and mutual understanding that would lead to eventual elimination of barriers to cooperation and trade, he continued.  It was necessary to identify the commercial potential of developing countries and create an enabling environment for their development.  His Government was fostering a number of initiatives in that respect.  It had also concluded a number of agreements to facilitate trade.  UNCTAD XI was an important step towards the establishment of closer ties between developed and developing countries.

H.S. PURI (India) said that his country was interested in increasing its global trade share for the benefit of its people.  Outlining the key principles that must be followed to improve the trade system and assure development gains, he stressed the importance of elaborating trade rules that would allow developing countries to better leverage their resources.  For trade to contribute to poverty reduction, poverty-sensitive sectors of developing countries' economies needed to be supported.  Investment synergies could increase the development capacity of countries.

What developing countries needed was a level-playing field, he continued.  Market-distorting anti-competitive practices of developed countries needed to be discontinued.  Global enterprises had a particular responsibility towards investment and a broader development contribution.  More favourable conditions should be created for exports from developing countries, including textiles.  As for services, their outsourcing would benefit many developing countries, including India.  Along with a group of other countries, India identified several non-tariff barriers that needed to be removed to facilitate its trade and development.

EDUARDO PEREZ MOTTA (Mexico) said that his country's trade strategy was based on bilateral treaties covering many countries of the world and international free trade agreements.  Mexico's exports had grown over recent years, and many new jobs had been generated since it had signed the North American Free Trade Agreement (NAFTA).  However, the country had suffered from outside shocks, and the drop in the United States economy had seriously affected its situation.

While a necessary condition of development, trade was not the only one, he continued.  The country had become more competitive as a result of diversification of its commodities and improvements in its workforce.  Also required were fiscal and structural reforms, investments in infrastructure and improved education.

YOLANDE BIKE (Gabon) said one of the major challenges facing the international multilateral trading system was its inability to integrate regional and subregional specificities and requirements.  It was critical to end the resultant cycle of marginalization and to promote fair market diversification and liberalization.  Gabon and countries like it needed to benefit from globalization.  She added that there were many discussions under way about ways the current trading system could be improved or enhanced.  What was now needed was political will to implement fair and equitable trade policies accompanied by broader support, from all governments, for their implementation.

JULIO BENDAÑA (Nicaragua) said it was necessary to use international trade as a tool to overcome an array of social ills and, domestically, policies were needed that promoted the integration of national needs into international trade schemes.  On commodities, he said that statistics showed that many countries were dependent on one or two agricultural products.

Their situation was worsened by fluctuations in markets, trade barriers, and high debt, he continued.  Those obstacles stood in the way of developing countries' efforts to promote economic growth and rural development.  He said that more emphasis must be placed on examining the links between trade, debt and financing for development.  The UNCTAD had taken a leadership role in researching that convergence.

CHAIYONG SATJIPANON (Thailand) said international trade was important for development, but it was necessary to ensure that trade liberalization and other market schemes did not negatively impact developing countries.  In the current interdependent and globalized world, yesterday's economies of scale had become today's economies of speed, and developing countries were being left behind.  For that reason, Thailand supported the Doha Development Agenda and the completion of negotiations on the accord currently under way in Geneva.  Thailand also believed that regional, subregional and bilateral trade could supplement the international trading system, but that such regional initiatives must be in line with WTO rules and norms.

GLADYS HÉRNANDEZ PEDRAZA, Investigator, Centre of Investigation concerning the World Economy of Cuba, said that statistics had shown that much of the income developing countries received from foreign trade was used to repay debt.  That was why trade barriers and subsidies needed to be eradicated; without such obstacles, resources could be freed up and earmarked for other development needs.  At the same time, she added that underdeveloped countries needed to strengthen national industries and promote sectoral and regional competition.

The representative of New Zealand said that multilateralism and effective functioning rules were essential for all, especially for small economies.  That was why his country placed so much importance on the current round of trade negotiations.  Agricultural reform was key to achieving most benefits for developing countries.  Agreement on frameworks by July was essential for keeping the negotiations on track.  New Zealand recognized that many developing countries faced special challenges in liberalizing trade and achieving development.  Support was needed to address their difficulties.  Special and differential treatment should be the focus of attention, as the challenge was to distribute gains for all the countries.

AMEDEO TETI (Italy) emphasized his country's special attention to the mutual relation between trade and development.  Special and preferential treatment within the WTO should continually serve developing countries, and negotiations on liberalization of trade and services were of fundamental importance.  Exports had led the growth of Italian economy after the Second World War, but, unfortunately, that was not the only instrument needed to promote the role of developing and least developed countries today.  Granting, substantially improved access to markets of least developed countries' products needed to be considered by developed countries.  Technical assistance should be particularly improved.  Other important issues were commodities, production and export diversification, protection of intellectual property, promotion of local specialty products and inter-institutional cooperation.

RICHARD BOURASSA (Canada) said that trade was essential for his country's economy.  It was a more powerful engine of growth than aid.  However, it had to take place within a rules-based, fair and transparent system.  A successful outcome of the Doha Round would be of great importance to many countries.  Economic institutions needed to assure development of the private sector.  Also important were pro-poor policies, environmental protection, policy coherence and gender mainstreaming.  The UNCTAD played an important role in promoting better understanding and building a fair trading system.

GYAN CHANDRA ACHARYA (Nepal) said that enhancement of production and supply capacities and strong international assistance were closely related.  Agriculture was of utmost importance, and liberalization of agricultural trade would bring great benefits to many nations.  Effective mechanisms were needed to ensure simple and reliable rules of origin.  For least developed countries, it was important to enhance their competitive strength and diversify their export base.  A clear commitment and contribution from developed countries were needed in those areas.

BLANCANIEVES PORTOCARRERO (Venezuela) said the international community was now at a new crossroads of civilization.  Globalization was leaving in the dust the linear and hegemonic concept of markets, which did not allow nations to enjoy wealth equally.  The international community needed to be more humble and learn from the creativity of the poor.   Flexible conditions should be created that would be compatible with national conditions.  Solidarity and useful and timely cooperation were needed that would respect individual nations' cultures and national traditions.  Genuine competitiveness needed to be timely and suitable.  Small- and medium-sized businesses were a fundamental source of employment in many countries.  Among the new and dynamic sectors that required particular attention, she mentioned information technologies.  Comprehensive justice, democratization of information and adjustment of responsibilities were among the requirements for a successful trade system.

ELISABETH TANKEU, of the African Union, said that Africa had given the world far too much -- offering up its human and natural resources since time immemorial.  That trend was continuing today with agricultural commodities.  The Union had been created as a vehicle for the continent to finally become the engine of its own growth and development.  African countries were now crafting common positions on world trade issues and were working to promote more global, as well as domestic trade.  The Union believed that the discussions in UNCTAD XI would supplement its broader efforts to assess the impact of globalization, which continued to negatively affect its member countries.

MARTIN KHOR, of the Third World Network, called on the Conference to pay greater attention to the current imbalances in imports and export rules for developing countries.  Also, the WTO rules should not contribute to those imbalances.  He urged delegations to pay particular attention to export liberalization and policies that would undercut growth in developing-country agricultural spheres.  He said the time was right, as negotiations wrapped up on the Doha Development Agenda, to "clear the table" on critical issues which had bogged down trade negotiations in Cancun last year.  Trade ministers must spare no effort to seek balance in trade facilitation.

Summing up the discussion, RUBENS RICUPERO, UNCTAD Secretary-General, highlighted some of the efforts under way within the organization to enhance trade negotiation strategies, including a network of export-import banks to help foster trade.  The UNCTAD was also applying new review and monitoring techniques to dynamic trade sectors -- those growing at more than double the international average. The organization was also initiating a network of regional trade agreements in the Latin American region.  It had also held a meeting of the Consultative Task Force on Environmental Requirements, which was a practical way to provide information to developing countries on how to update those requirements.  The UNCTAD was also publishing its progress report on trade and development benchmarks which would examine whether trade negotiations were really fulfilling the promises of broader development.

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