|Department of Public Information • News and Media Division • New York|
Sixty-fourth General Assembly
25th Meeting (AM)
International Community Must Fight Protectionism to Ease Effects of Global
Financial Crisis, General Assembly’s Economic Committee Is Told
United States Delegate Says Work of Committee Important; Discussions
Should Show Commitment of Member States to Hasten Return to Prosperity
The international community must fight protectionism and conclude the Doha talks to mitigate the effects of the economic crisis, especially on the poor, the Second Committee (Economic and Financial) was told today, as the Committee began its consideration of international trade and development in the context of macroeconomic policy.
The United States representative said the drop in world trade this year was projected to reach 10 per cent, and these difficult economic times had brought the importance of international trade to the forefront. Now, more than at any time before, the Committee’s work was important, and discussions could help hasten the return to prosperity and reflect the commitment of Member States to the strengthening of international trade. So far, the international community had demonstrated unity and maturity, and had resisted pressure to slip into the protectionist ways of the past. Currently, trade was stabilizing and the economy showed the first signs of a rebound. The World Bank predicted international trade would grow by nearly 4 per cent next year. History would prove that during the current difficult economic times, countries were correct to hold firm to their commitments to internationalism.
At the outset of the Committee meeting, Jean Feyder, President of the Trade and Development Board, said the international financial and monetary system was in need of a comprehensive revision, and the regulation and supervision of financial markets should take account of both microeconomic and macroeconomic dimensions. With regard to climate change, the suggested choice between protecting the environment and furthering economic development was artificial; mitigating the negative effects of climate change did not have to be carried out to the detriment of economic development.
Presenting reports to the Committee were Supachai Panitchpakdi, Secretary‑General of United Nations Conference on Trade and Development (UNCTAD), who introduced the United Nations Secretary-General’s report on international trade and development, and Ana Luiza Cortez, Chief, Committee for Development Policy Secretariat, Development Policy and Analysis Division, Department of Economic and Social Affairs, with his report on unilateral measures as a means of political and economic coercion against developing countries.
During a question-and-answer period which ensued, delegates asked if some financial rules could be included in the overall mandate of the World Trade Organization (WTO), and how that would help facilitate and make that Organization’s work more efficient. In response, Mr. Panitchpakdi said WTO members were concerned about how the Organization could be tasked with issues beyond its core mandate, such as commodity prices, exchange rates, rules on labour and the environment. They would have to look at those issues carefully.
To a question about better coordination between UNCTAD and other institutional mechanisms to help developing countries with trade financing, he said that in the wake of the financial crisis, the Group of Twenty (G-20) had tasked the World Bank to set up coordination of the global financial system. It was essential to keep track of any movements that restricted the normal flow of international trade. UNCTAD should be able to represent the United Nations at more discussions with other institutions. Business could not continue as usual, and UNCTAD’s contribution could be enhanced.
Among general statements, the representative of Sudan, speaking for the ‘Group of 77’ developing countries and China, said it was critical to encourage trade in the context of the recession, because the financial crisis had reduced global demand while the food and energy crises had diminished global supply. To further economic growth and sustainable development, it was vital to conclude the Doha Trade Round, and to resolve the current impasse. It was necessary to move swiftly while considering issues of equity and fairness.
The delegate from Barbados, speaking for the countries of the Caribbean Community (CARICOM), said it was critical for the Doha Round to be revived with a developmental focus; he welcomed the recent commitment of the G-20, at the Pittsburgh Summit, to bring it to a successful conclusion in 2010. He called on all members of the WTO to support the Doha mandate, to examine issues related to the trade of small economies and to frame action-oriented responses to those issues in order to facilitate the fuller integration of small, vulnerable economies into the global trading system. Current international trade rules did not adequately address CARICOM’s unique concerns and challenges.
The delegate of the European Commission, speaking for the European Union, agreed that developing countries had been severely and disproportionately affected by the global economic crisis. However, it was important to note that trade itself did not create the crisis. She said that, contrary to what seemed a widely‑held belief, WTO members -– especially from developing and least developed countries -– already had discretion and considerable policy space within which to regulate their markets as they saw fit. Furthermore, aiming for self-sufficiency in terms of food was unrealistic and did not solve the problem. Rather, the markets should be improved to function more effectively. In the context of the crisis, it was critical to show caution when it came to economic experiments, lest they result in longer-term economic problems.
Also speaking today were the representatives of Botswana (for the Southern African Development Community (SADC)), Nepal (on behalf of the least developed countries), Mexico (on behalf of the Rio Group), Brazil, Columbia, Japan, China, the Republic of Korea, the Dominican Republic and Singapore.
The Committee will meet again at 10 a.m. tomorrow (Friday, 30 October), for a panel discussion on “Enhancing Governance on Water”. Later in the day, it will conclude its discussion on international trade and development in the context of macroeconomic policy.
The Second Committee (Economic and Financial) met today to consider its agenda item on international trade and development.
Before the Committee was the United Nations Secretary-General’s report entitled Unilateral economic measures as a means of political and economic coercion against developing countries (document Z/64/179), which outlines the response from Member States, as requested, on the subject. Included in the report are the comments and observations of Belarus, Burkina Faso, Iran and Jamaica as well as of United Nations Agencies.
Generally, Member States disagree with the application of unilateral economic measures as instruments of political and economic coercion against developing countries, arguing that such use is contrary to the principles of the United Nations Charter, the norms of international law and the rules-based multilateral trading system. The report notes that Belarus supported efforts by the United Nations to prevent the use of such measures; Burkina Faso argued that they present an obstacle to the socio-economic development of affected States; Iran, identifying itself as a country subjected to coercive economic measures, stated that such measures had to end; Jamaica, for its part, urged Member States to abide by calls made by the General Assembly to repeal or invalidate such measures as soon as possible.
The report also imparts updates from the Economic Commission for Latin America and the Caribbean (ECLAC) and the Economic and Social Commission for Asia and the Pacific (ESCAP) with regard to Cuba, Myanmar, the Democratic People’s Republic of Korea, the Occupied Palestinian Territory, Sudan and Syria.
Also before the Committee was the United Nations Secretary-General’s report entitled International Trade and Development (document A/64/177), which charts how the global financial and economic crisis has affected attainment of the Millennium Development Goals. It states that prevailing development models and export-led growth strategy requires careful rethinking in light of the crisis, and that the United Nations has a central role in developing a coherent global response to the crisis and beyond.
The report concludes that the global economy requires a course correction towards more sustainable and inclusive development, and that the root causes of the crisis need to be addressed. The crisis has challenged prevailing economic doctrines and the global governance system, led by the United Nations, must develop a coherent paradigm to comprehensively address this challenge.
The economies of Member States must become more resistant to external shocks through diversification of products, services and markets; proactive policies and sound regulatory and institutional frameworks could support such efforts.
Also before the Committee was the Report of the Trade and Development Board on its forty-fifth executive session (document A/64/15 (Part I), held in Geneva on 13 November 2008. The objective of the session, which comprised discussions between delegates from more than 100 countries, was to prepare for the Follow-up International Conference on Financing for Development in Doha, Qatar in 2009 to Review the Implementation of the Monterrey Consensus.
The Report of the Trade and Development Board on its forty-sixth executive session (document A/64/15 (Part II), held in Geneva on 27 March, describes a shift in delegates’ thinking, from purely market-driven solutions towards more involvement by the State in dealing with the crisis with countries considering polices unthinkable just a few months previously. Delegates expressed hope that the 2009 Doha Conference would prepare the ground for a comprehensive follow-up to and a strengthening of, the financing for development process. The report highlights the need for stronger global economic governance, building on the principles of multilateralism with a clear set of global financial rules and regulations.
The delegates also recognized that additional financial resources, especially increased official development assistance (ODA), were urgently needed to achieve the millennium targets, given the impact of the crisis. Many delegates thought there had only been modest progress in implementing the Monterrey Consensus, although significant strides had been made in terms of debt relief for the poorest countries, and participants put forward a number of recommendations on all the sub-themes of the Monterrey Consensus.
The Report of the Trade and Development Board on its forty-seventh executive session (document A/64/15 (Part III), held in Geneva on 30 June, has a summary of activities undertaken by the United Nations Conference on Trade and Development (UNCTAD) in favour of Africa.
The Report of the Trade and Development Board on its fifty-sixth regular session (document A/64/15 (Part IV), held in Geneva from 14 to 25 September, reviews progress in implementing the Programme of Action for the Least Developed Countries for the Decade 2001-2010, efforts to strengthen regional economic integration for Africa’s development, UNCTAD’s technical cooperation activities and their financing, development strategies, and other issues.
Introduction of Reports
SUPACHAI PANITCHPAKDI, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), introduced the United Nations Secretary-General’s report on international trade and development (document A/64/177), which describes how the economic recession affected achievement of the Millennium Development Goals. The report concludes that prevailing development models and strategies require careful rethinking in light of the crisis.
Addressing the delegates, Mr. Panitchpakdi raised a note of caution about the strength of the apparent economic recovery and its prospects for low-income developing countries. The real economy was still sluggish and there was concern that the recovery would be jobless, a supposition supported by September figures which showed that unemployment was still rising in some areas.
The stakes were high as the crisis reversed hard-won progress on the Millennium Development Goals and their fulfilment by 2015 was now deemed practically impossible. Furthermore, the economic crisis had put into question prevailing economic policies and had shown the need for a correction that took into account the root causes of the meltdown, and such re-evaluation should be led by the United Nations.
JEAN FEYDER, President of the Trade and Development Board, gave a summary of the deliberations at the fifty-sixth session of the Board, which had dealt with the global economic crisis and appropriate responses. He said the international financial and monetary system was in need of a comprehensive revision, and the regulation and supervision of financial markets should take account of both microeconomic and macroeconomic dimensions. With regard to climate change, the choice between protecting the environment and furthering economic development was an artificial dichotomy, and mitigating the effects of climate change did not have to be carried out to the detriment of economic development.
Concerning agriculture, the participants at the Board meeting concluded that transnational corporations could play a role in the development of the agricultural sector in developing countries and Governments in these countries should develop strategies in this regard. The Board had also reviewed UNCTAD’s assistance to the Palestinian people in creating an economic infrastructure with a view to the establishment of a State, and most representatives had expressed concern about the deteriorating economic situation in the Occupied Palestinian Territory.
ANA LUIZA CORTEZ, Chief, Committee for Development Policy Secretariat, Development Policy and Analysis Division, Department of Economic and Social Affairs, introduced the United Nations Secretary-General’s report on unilateral measures as a means of political and economic coercion against developing countries (document A/64/179). She said the report was prepared in response to General Assembly resolution 62/183, which asked the United Nations Secretary‑General to continue monitoring the imposition of such measures. As part of the monitoring process, the Secretariat, in a note verbale of 22 May, invited Governments, organizations, programmes and agencies to report on developments in that regard. Four Member States had replied saying that such measures were inconsistent with international law and international cooperation. Three United Nations Organizations had reported specific instances of such measures and described their adverse impact.
During the ensuing discussion, delegates asked if some financial rules could be included in the overall mandate of the World Trade Organization (WTO), and how that would help facilitate and make that Organization’s work more efficient.
In response, Mr. PANITCHPAKDI said WTO members were concerned about how the Organization could be tasked with issues beyond its core mandate, such as commodity prices, exchange rates, rules on labour and the environment. They would have to look at those issues carefully.
On a question about better coordination between UNCTAD and other institutional mechanisms to help developing countries with trade financing, he said that in the wake of the financial crisis, the Group of Twenty (G-20) had tasked the World Bank to set up coordination of the global financial system. It was essential to keep track of any movements that restricted the normal flow of international trade. UNCTAD should be able to represent the United Nations at more discussions with other institutions. Business could not continue as usual, and UNCTAD’s contribution could be enhanced.
On concerns about the impact of trans-national corporations investing heavily in agriculture sectors in the developing world, Mr. Feyder said third countries had made large acquisitions in many developing countries, particularly in Africa, raising problems with transparency, respect for local small-scale farmers and issues of food security. Owing to the food crisis, UNCTAD in Geneva had for the first time focused on investment in agriculture in its annual report. He warned, however, against overestimating the impact of transnational corporations on food security. While those corporations’ investments in agriculture were growing, they accounted for just 3 per cent of total investments in the field, and they were not necessarily involved in production. Rather they focused more on the upstream and downstream aspects of agriculture.
Indeed, investment in agriculture would benefit production, but it should not replace the larger discussion that must be held on how to increase agricultural productivity, particularly as the number of hungry people worldwide was growing. He said there must be a focus on good trade policies to assist agricultural recovery, particularly in least developed countries. Furthermore, he agreed with the proposal to explore the extent to which other stakeholders could become involved, and said the upcoming food summit in Rome would provide a good opportunity to take up the question.
NADIA OSMAN (Sudan), speaking for the ‘Group of 77’ developing countries and China, said it was critical to encourage trade in the context of the recession, but the financial crisis had reduced global demand while the food and energy crises had diminished global supply. Consequently, it was vital to conclude the Doha Trade Round to realize a “universal, rule-based, open, non-discriminatory and equitable multilateral trading system”, which would contribute to economic growth and sustainable development.
To resolve the current impasse, it was necessary to move swiftly but with consideration of equity and fairness, she said. A key benchmark of a real “development-oriented” outcome of the Round was a liberalization of the agriculture sector, eliminating agriculture subsidies and other trade distortions.
UNCTAD was the central point within the United Nations system to consider trade and development, and interrelated issues and she urged UNCTAD to continue its tradition of authoring high-calibre analysis and recommendations, which advanced fair and open trade that supported economic development.
MARIA-FRANCESCA SPATOLISANO (European Commission), speaking for the European Union, said that as a result of the global economic crisis, developing countries experienced revenue loss, a credit squeeze and declining exports, foreign direct investment and remittances. The crisis showed the need for these countries to diversify their economies with respect to exports but also with regard to the range of trading partners. Furthering south-south trade and integration would help the developing countries improve their position in world markets by the creation of larger regional markets, more competitiveness and increased foreign investment.
It was important to note that trade itself did not create the crisis, and she highlighted some of the main reasons why the European Union did not believe that there was a need for a new paradigm in terms of trade. First off, contrary to what seemed a widely-held belief, WTO members -– especially developing and least developed countries -– already had discretion and considerable policy space within which to regulate their markets as they saw fit. Secondly, concerning food security, aiming for self-sufficiency was unrealistic and did not solve the problem. Rather, the markets should be improved to function more effectively. The third point concerned export-led growth strategies and trade could not be relied upon to deliver development on its own. Finally, in the context of the crisis, it was critical to show caution when it came to economic experiments lest they result in longer-term economic problems.
She said every crisis also presented opportunities, and one such should be to make economic recovery as “green” as possible. A successful outcome to the upcoming Climate Conference in Copenhagen was important, also when considering trade policy. Climate protectionism should be avoided and Member States should instead concentrate on how to effectively mitigate climate change; liberalisation of trade in environmental goods and services was one vital contribution to that task.
CHRISTOPHER HACKETT ( Barbados), speaking for the countries of the Caribbean Community (CARICOM), said it was critical for the Doha Development Round to be revived with a developmental focus. He welcomed the recent commitment of the G-20 at the Pittsburgh Summit to bring it to a successful conclusion in 2010. He called on all members of the WTO to support the Doha mandate to examine issues, related to the trade of small economies and to frame action-oriented responses to those issues in order to facilitate fuller integration of small, vulnerable economies into the global trading system. Current international trade rules did not adequately address CARICOM’s unique concerns and challenges.
In an effort to implement the WTO work programme on small economies, CARICOM and other like-minded countries had made several proposals, he said. They had called for trade preferential arrangements, to maintain existing preferential arrangements for exports from small, dependent economies. They asked regional and multilateral institutions to create long-term preferential facilities to ensure investment flows into those economies, and to facilitate their participation in the multilateral trading system. They called for enhanced flexibility for small vulnerable economies to use fisheries subsidies, considering the miniscule impact those countries had on fishing and overcapacity, as well as for better market access for the agricultural and non-agricultural products and services of those countries.
He said he fully supported the “Aid for Trade” initiative aimed at helping developing countries implement their bilateral and multilateral trade commitments, seize economic opportunities created by trade openings, and adjust to liberalized trade and increased market access. The initiative should lead to better growth prospects and poverty reduction in developing countries. He strictly opposed the use of protectionist policies, particularly in a time of financial and economic crisis. Such policies only inhibited trade and they were contrary to the WTO’s goals.
CHARLES NTWAAGAE ( Botswana), speaking for the Southern African Development Community (SADC), said that trade was extremely important for economic growth and could be a catalyst for the achievement of sustainable development in that community. However, the imbalances and inequity in terms of access to the world markets had to be addressed, and the Doha Trade Round should be concluded.
The economic crisis as well as climate change had already affected the most vulnerable countries but despite a range of obstacles, the SADC continued to forge ahead. Currently, countries in the region were involved with efforts to establish a free-trade area, comprising a regional market of almost 250 million people. Countries were also preparing for a customs union and a ministerial task force had been convened to examine the relevant issues in terms of such a union. The efforts of the United Nations to assist Africa achieve the Millennium Development Goals were appreciated. He urged Member States to scale up Aid for Trade and other, similar, initiatives.
RAMJI PRASAD SHARMA ( Nepal), speaking for the Least Developed Countries, said global macroeconomic imbalances had played a significant role in precipitating the global financial and economic crisis. Least developed countries had been experiencing a drop in gross domestic product (GDP) and exports. They were grappling with declining trade volumes, fluctuating food prices and a downturn in tourism and remittance inflows. Recent fluctuations in energy prices had affected the economic stability and imports of the least developed countries, offsetting their already negative trade balances. International trade was important for development and sustained economic growth. The key challenge today was how to make least developed countries more resilient to external shocks, especially in their declining comparative advantages for exports and rising costs of imports.
Lower export revenue and inflows of capital and higher loan premiums would exacerbate the already tight balance of payment of least developed countries, he said. Foreign direct investment and ODA continued to decline. The possibility of a severe debt crisis could not be ruled out. Although many least developed countries had successfully implemented export-led growth strategies, they had been victims of shrinking international trade. Unless the domestic demand of least developed countries was bolstered and developing countries’ access to markets further widened, least developed countries were likely to experience a further decline in their national outputs and income.
He expressed concern over the continued deadlock in the Doha development agenda and WTO negotiations, and the new waves of protectionism being built into the inward-looking stimulus packages being adopted in the face of the global financial and economic crisis. Given the exceptional vulnerabilities of least developed countries, the developed countries should immediately make available to them the pledged development aid, duty-free access to their products, aid for trade, debt-relief packages and other capacity-building measures in line with agreed international compacts and commitments including the Monterrey Consensus. Those resources were important to fight poverty, hunger, illiteracy and disease in least developed countries.
NOEL GONZÁLEZ-SEGURA (Mexico), speaking for the Rio Group of countries, said that, according to recent estimates by the World Bank, 55 to 90 million more people than previously expected lived below the poverty line in 2009. Clearly, the economic crisis had reversed progress for development and threatened the attainment of the Millennium Development Goals. Contraction of international trade, falling tourism revenues and remittances had all negatively impacted countries in Latin America and the Caribbean.
Guaranteeing that developing countries could have just and equal access to the markets of developed countries was essential to improve living conditions, he said, and he noted that with regard to migration, employment was an area that had not been “liberalized” on the international level, in the same way that capital and goods had. Protecting the achievements of developing countries was important and, in that regard, it was the key to addressing the resurgence in protectionism, especially as that affected the recovery of Rio Group countries.
He said the economic crisis originated in the developed world but had clear repercussions for developing countries, especially those that were most vulnerable. Trade was an engine of growth, one that could be further stimulated and, paying special attention to the needs of the developing countries, the Doha Round should be brought to its conclusion. Distorting trade practices, notably subsidies, had to be eliminated.
JOÃO LUCAS ALMEIDA ( Brazil) said that in the last decade, trade was a major engine for global economic growth. Its potential role for fostering development had been duly recognized in the Monterrey Consensus. But last year’s financial crisis had stalled and set that engine for growth into reverse. In September, world merchandise trade volumes were 20 per cent lower than the peak level obtained in April 2008. The economic recovery had not made full traction in many countries. Early conclusion of the Doha Round would provide much-needed impetus to international markets. It could yield a double dividend in the form of a stimulus package and much-needed structural reform. So far the world had avoided the harsh protectionist policies adopted during the Great Depression. But recovery must be fully consolidated to avoid a relapse of protectionism. That required political commitment.
There was a growing consensus, he said, that much of the reduction in trade flows was caused by restricted access to trade finance. Given the importance of agriculture in the economy of most developing countries, agriculture was the key issue in negotiations of the Doha Trade Round. The reduction of agricultural subsidies and enhanced markets access would be the most single contribution in the short-term that developed countries could make. The next few months presented the international community with a window of opportunity. He said he was encouraged by the important references to multilateral trade negotiations in the G‑20 statements, but the G-20 was not the global negotiating arm for trade. The Doha Round should build upon progress already made. The decision to hold regular monthly meetings between senior officials was a welcome step. Political will was needed to overcome the present paralysis in trade.
CLAUDIA BLUM ( Colombia) said the global economic recession tested the resolve and capacity of Member States; in terms of creating an international trade system that was transparent, open, fair and based on multilateral rules. In the context of the crisis, it was vital to acknowledge that trade played an indispensable role in development and progress towards the Millennium Development Goals. The last two years had highlighted the need to improve regulation and strengthen the international financial system, and Colombia supported the argument advanced by UNCTAD that regulatory reform had to be done comprehensively.
“Trade is a driving force for economic growth and development,” she said, and added that the international trading system had to orient itself according to the needs of developing countries. Access to international markets had to be improved and protectionist measures were still a concern. It was also imperative that the Doha Trade Round was concluded, taking into consideration the needs of developing countries. Access to markets was particularly important with respect to agricultural products, and developed countries should substantially reduce subsidies to eliminate barriers for trade and growth.
TOBIAS GLUCKSMAN ( United States) said the events of the past year and the difficult economic times had brought the importance of international trade to the forefront. The 10 per cent drop in global trade projected for this year had shown the painful impact of a decline in world trade. Trade had dropped precipitously and many countries and vulnerable populations were suffering as a result. Now, more than in any time in recent memory, the Committee’s work on the issue could have meaningful impact. Discussions should set a tone of common commitment to strengthen the enabling environment for international trade and hasten the return to inclusive prosperity and growth.
He said the international community had demonstrated unity, maturity and confidence in the benefits of the international trade regime and it had resisted pressure to slip into the protectionist ways of the past. Trade was stabilizing and showing the first signs of a rebound. The World Bank predicted international trade would grow by nearly 4 per cent next year. History would prove that during the current difficult economic ties, countries were correct to hold firm to their commitments to internationalism.
It was critical that discussions in the coming weeks produce an outcome that would unequivocally support and build upon the turnaround and evolving recovery in trade, he said. The mutual gains from trade had long been well-established. Effective trade led to increases in national production and income. At the Pittsburgh Summit, G-20 leaders reaffirmed their commitment to fight protectionism, and strove to bring the Doha negotiations to a successful conclusion. It was important to continue to work together to reinvigorate the multilateral trade agenda and reach an ambitious, balanced agreement on the Doha Round. The United States stood ready to work with other Member States in that regard.
KENJU MURAKAMI ( Japan) said that the global economic and financial crisis was characterized by a severe contraction of international trade and that Japan had been one of the countries hardest hit, suffering a decline in trade of 43 per cent in the first quarter of 2009. In this context, Japan was committed to the fight against protectionism and called for the relevant bodies, including WTO, the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF) and UNCTAD to continue to monitor the situation.
As economic recovery got under way, it was the responsibility of developed countries to consider the plight of developing countries and to furnish assistance. Aid for Trade was a vital component of assistance. Given its own development experience, Japan testified that free trade could be a strong engine for development, economic growth and poverty reduction, and for that reason, the country supported Aid for Trade. Taking the economic crisis into consideration, Japan had announced the ‘Development Initiative for Trade 2009’, through which it would provide $12 billion in bilateral assistance for trade-related projects over the next two years. The country would also make available 40,000 people to provide technical assistance in the field of trade-related activities.
ZHANG SHAOGANG ( China) said the global financial and economic crisis had wreaked global havoc, with international trade dropping sharply. According to the WTO, international trade had declined by about 10 per cent in 2009, a more precipitous drop than at any time since the Second World War. Meanwhile, protectionism had gathered force and economic progress had become more arduous for developing countries. He said China opposed trade protectionism and he urged the international community to implement the consensus reached at the United Nations High-Level Conference on the World Financial and Economic Crisis. Furthermore, it was crucial to conclude the Doha negotiations with special priority given to developing countries, and also trade financing must be improved.
According to UNCTAD, the trade decline of the least developed countries in 2009 was as steep as 9 to 16 per cent and the international community should take expedient measures to establish a fair and reasonable trade order for commodities to help those nations take full advantage of trade preferences. In conclusion, he said China was the third largest importer in the world and the country had taken practical steps to oppose protectionism. This fair and open trade policy adopted by China had already brought benefits to other countries, and the Government would continue to develop such mutually beneficial, “win-win” cooperation.
JOO YEON ELLEN KANG ( Republic of Korea) said international trade had been the driving force behind her country’s economic development since 1960. The fact that trade and investment accounted for more than 70 per cent of the country’s total GDP illustrated the fact that it was a trading nation. For a country so heavily dependent on global trade, opening markets to foreign competition had been necessary for survival. Trading with global partners on a level playing field had been a critical objective of economic development. She said countries like the Republic of Korea that were highly dependent on trade had been more vulnerable to the dramatic decline in global trade caused by the current global financial crisis. The drop in global demand for imports was affecting exports of many developing countries. History showed that protectionism could only deepen the recession and push many into poverty; in the 1930s, competitive increases in tariffs in major countries had resulted in a 33 per cent decline in international trade.
She said the Republic of Korea was playing a proactive role in strongly cautioning against protectionism, especially at the G-20 Summit meetings. Countries continued to resort to protectionist measures, despite G-20 leaders reaffirming their commitment to a standstill and even a roll-back of the measures. Nonetheless, the commitment of the G-20 leaders appeared to have been somewhat successful in preventing a greater increase in protectionism worldwide. She said the World Trade Organization was to be credited for its highly constructive role in keeping protectionism at bay and monitoring protectionist tendencies, but non-tariff barriers were on the rise. Growing financial protectionism was aggravating the credit crunch and financial instability of developing economies. It was necessary to minimize the negative impact of domestic emergency measures -- including fiscal policy and action to support the financial sector –- on global trade and investment.
FEDERICO CUELLO ( Dominican Republic) said his country’s exports had dropped 36 per cent and imports had fallen by a similar level because of global financial crisis. Tourism had continued to grow, albeit at a slower pace. The economy of the Dominican Republic would grow “a lacklustre 2 per cent” this year, after experiencing years of robust growth. There had been a 10 per cent drop in remittances and income. He asked how developing countries could expand domestic markets if their income dropped. The answer lay with international financial institutions and the international community, but the promised funding from them had still not come through. In 2008, aid only totalled $720 billion. That figure must be doubled if countries were to get out of the crisis.
He called for an expansion of domestic markets through greater international financing, and stronger multilateralism by complying with rules of the World Trade Organization. Much had been said for least developed countries, and about the fact that they needed to export more and have true access to markets. However, market access would not ensure greater development if the least developed countries were not able to add value to their products.
He said developed countries must reduce the tariffs on exports from least developed countries, which were facing increasing obstacles because of protectionist measures. It was important to eliminate agricultural subsidies. Countries must sit down together to find solution to environmental problems that had profoundly impacted developing countries. He called for a redirection of negotiations on international trade and development, and new rules governing the service sector. The international financial crisis was the result of a lack of effective regulations on services. There must be an effective instrument to reverse the crisis in the future.
MUSA FAZAL ( Singapore) said the last year had been challenging to everyone, but Singapore remained committed to the strengthening of a rules-based, multilateral trading system. With regard to international trade, Singapore rejected all kinds of protectionism as it was in everybody’s interests to keep markets open. Despite commitments made by Member States not to put up trade barriers, protectionist measures had been erected in many countries.
With regard to the Doha Trade Round, significant progress had been made and it was critical to translate this into substantive and constructive negotiations; open bilateral and multilateral avenues for engagement were a key, since they allowed negotiations to be conducted on multiple fronts. This was a favourable time for Committee members to urge Government leaders to push back on protectionist measures and reject protectionism. Furthermore, delegates should rally to support a conclusion to the Doha Rounds.
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