The UN General Assembly held a High-level Dialogue on Financing for Development from 23 to 25 October 2007 at UN Headquarters in New York. One of the highlights of the three-day event, bringing together representatives from Governments, business, civil society and multilateral financial institutions, was the six round-table discussions on the thematic areas of the Monterrey Consensus, including the role of international trade.
During the round table on “International trade as an engine for development”, Government representatives voiced their concerns over the progress made so far. The Monterrey Consensus, adopted in 2002 at the International Conference on Financing for Development, was the first global attempt to comprehensively address the challenges of financing development, especially in the context of meeting the Millennium Development Goals. Most countries benefited from global trade expansion, said Olga Algayerova, State Secretary of Foreign Affairs of the Slovak Republic, who co-chaired the discussion, but some remained marginalized, especially the least developed countries (LDCs). She said that the global trade system should be redirected in favour of the poorest countries and be made more pro-development. “All countries involved in the Doha Round should aim to forge an open, non-discriminatory and equitable multilateral system”, she urged. The Doha Round refers to the ongoing World Trade Organization (WTO) negotiations, first held in Doha, Qatar in November 2001, which aim to lower trade barriers around the world, permitting free trade between countries of varying prosperity.
Trade played a crucial role in financing for development, noted Valentine Rugwabiza, Deputy Director-General of WTO. She said that in 2006 the export figure in developing countries reached $4.3 trillion. The revenue from developing countries' exports—almost $400 billion in 2006—was more than ten times the amount of the foreign direct investment (FDI), according to WTO. Countries that successfully used trade as an engine for development, such as Chile, adopted open trade and macro-economic policies to help build the resilience of the economy in the face of various external shocks. Other economic policies must still be put in place to support open trade with domestic policies and a multilateral system, said Ms. Rugwabiza.
Egypt had embarked on a very ambitious reform programme since the mid-1990s, including taking unilateral liberalization measures of trade and foreign exchange, according to its Deputy Minister for International Cooperation, Talaat Abdel Malek. He noted that liberalization of agriculture would help developing countries reclaim their competitive advantages. Suggesting major trading partners should liberalize their markets, he pointed out that developing countries, in this context, had a distinct advantage. He urged leading industrialized countries to make substantive reductions in agricultural subsidies, which would allow developing countries like Egypt to regain their competitive advantage. “It is an engine for growth, for rural areas in particular”, Mr. Abdel Malek added.
 |
| UN
photo J. Isaac |
Echoing Ms. Algayerova’s comment on globalization, Gyan Chandra Acharya, Acting Foreign Secretary of Foreign Affairs of Nepal, said that the impact of globalization on countries like his was severe. A meaningful and holistic integration was needed in order for the LDCs to be neither marginalized nor “crushed” by globalization, he said, adding that Nepal was not only an LDC but also landlocked and lacking in resources. Many LDCs were import-dominated, he noted. “We don’t have the capacity to have market access for possible new products that we might be able to export to many countries”, he added. When dealing with a non-discriminative multilateral trading system, he remarked, more efforts should be made to integrate the LDCs.
“A comprehensive rethinking” of the mechanisms of international trade and financial governance was needed, said Celine Tan, Senior Researcher of the Third World Network (TWN), during an informal hearing of civil society on 22 October 2007. Providing a perspective on civil society in international trade of developing countries, she said the current global economic arrangements needed to balance sharing regulatory obligations and required an equitable economic system. The lack of multilateral rules on international monetary and financial flows was a major concern for developing countries, Ms. Tan noted, adding that those countries were highly vulnerable to external financial shocks, which could be more damaging than trade shocks. The coherence between the multilateral disciplines and trade and finance was lacking, she explained, and that these severely affected the developing countries’ capacity to generate financing for development.
There were “significant inequalities between States”, Ms. Tan emphasized, and the way they were “constrained by the multilateral economic rules”, the design of which remained “reflective of the interest of industrialized countries”. In this context, she noted, trade rules also prevented developing countries from adopting targeted industrial policies. With “an unfavourable export environment and increased imports”, many developing nations still faced significant trade deficits, which affected their overall financing capacity, she concluded. To fulfil the objectives of the Monterrey Consensus, Ms. Tan suggested that “a multilateral economic governance system and a better balance of obligations between developed and developing countries” was required.
Go Back Top
|
Print