Present world trade imbalances are discriminatory, Annan says

Annan at opening of UNCTAD XI

14 June 2004 – If new rules aiming to free world trade then throw up barriers of their own, the problem is not lack of coherence but the kind of discrimination which people are expecting the United Nations Conference on Trade and Development (UNCTAD) to oppose, UN Secretary-General Kofi Annan told government ministers in São Paulo, Brazil, today.

“Policies ought not to give with one hand and take away with the other. Rules designed to liberate ought not to create new barriers. Countries which press others to liberalize trade should be willing to do the same themselves,” he said as he opened the 11th UNCTAD ministerial conference.

“If they don't, we politely call it lack of coherence; but we could just as accurately call it discrimination. And that is what people are looking to this conference to take a strong stand against.”

The world could improve living standards for all because it now has the experience, the technologies, the unprecedented consensus around the Millennium Development Goals (MDGs) seeking to halve extreme poverty by 2015 and the beginning of a global economic recovery, he said.

Pointing to the lack of coherence, Mr. Annan said Asian entrepreneurs trying to take advantage of a new market opportunity in a rich country, might find that their roads were inadequate for the trucks that would have to carry their exports to local ports.

An African farmer might find that duty-free access to global markets has been nullified by requirements for sophisticated packaging, or by the financial and marketing impact of subsidies paid to competitors in wealthier countries.

The indigenous producer of medicinal herbs in Latin America might not know whether his peoples would be fairly rewarded, he said.

Indigenous populations have been battling for rights to their herbal knowledge through the UN World Intellectual Property Organization (WIPO).

What the world lacked was a development-friendly trading regime, but that might be coming in the wake of important initiatives from the European Union (EU) and the United States, while the successful use of the World Trade Organization’s (WTO) dispute settlement mechanism, notably by Brazil, has shown that a rule-based system could help developing country producers, Mr. Annan said.

In April, Brazil successfully challenged U.S. subsidies of its cotton exports.

If the new round of talks under the Global System of Trade of Preferences among Developing Countries leads those countries to reduce tariffs among themselves by 50 per cent, world trade would jump by $15.5 billion and decisively help to develop what President Luiz Inacio Lula da Silva of Brazil has called “a new global trade geography,” the Secretary-General said.

UN General Assembly President Julian Hunte of St. Lucia noted that the export revenues of nearly a quarter of the GA’s membership, or 50 countries, depended on just two or three commodity exports, while another 39 countries depended on just one.

Unless this export situation was urgently addressed in the context of market operations, their development goals would remain challenging, he said.

With levels of development being a key priority, developing countries benefited most from liberal and fair markets, especially those free of discretionary standards, as well as technical, environmental and other requirements, Mr. Hunte said.

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