Governments Must Create Jobs in Face of Worldwide Protest Movements, Warns International Labour Organization Chief during Panel Discussion
Governments Must Create Jobs in Face of Worldwide Protest Movements, Warns International Labour Organization Chief during Panel Discussion
|Department of Public Information • News and Media Division • New York|
Sixty-sixth General Assembly
25th & 26th Meetings (AM & PM)
Governments Must Create Jobs in Face of Worldwide Protest Movements, Warns
International Labour Organization Chief during Panel Discussion
Before Joint Meeting with Economic and Social Council,
Second Committee Takes up International Trade and Development, Commodities
Governments must unite to create jobs or face the pressing danger posed by the massive movements organizing around the world, Juan Somavía, Director-General of the International Labour Organization (ILO), said today during a joint meeting of Second Committee (Economic and Financial) and the Economic and Social Council.
People around the world were losing faith in Governments and public institutions, he said during a panel discussion on “Investing in productive capacities for job-rich growth”. Joining him on the panel were Michelle Bachelet, Executive Director of the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) and Chair of the Social Protection Advisory Group. Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development in the Department of Economic and Social Affairs, was the Moderator.
Mr. Somavía said the current globalized system, which placed macroeconomic policies over socio-economic ones, must be restructured as it had led to greater inequality, an imbalance between the real economy and the financial economy, and high levels of unemployment. Burdened by enormous debt, people around the world were rising up to demand work, a share of the wealth they had helped create, and basic levels of social security. They hoped politicians would set aside their differences and unite to address the prevailing multiple global crises.
Moving forward called for alternative models of globalization that would restructure the increasingly inadequate current policies, he continued. There was need for a return to a technical rather than an ideological framework for growth, he stressed, adding that the global economic and financial crisis stemmed from idealizing deregulation. The current economic situation had become politically unsustainable, having led to growing global discontent, and people were losing faith in Governments and public institutions, he said.
Describing his visit to the “Occupy Wall Street” protest in downtown New York City, he said it had convinced him that the problem lay in the idea of banks that were “too big to fail” and people who were “too small to matter”. The financial economy had taken resources away from the real one, he said, recalling that over the last 30 years, investment in the latter had remained at about 20 per cent, while money had been poured into the financial sector. The problem was that the financial system could not directly create jobs, he pointed out.
Noting that many politicians were going about business in the same old way, while using the crisis to seek votes for the next election, he emphasized that Governments must unite in the face of the movements organizing worldwide. The present period should be seen as an opportunity, he said, adding that the policy space available for exercising creativity and innovation had never been bigger. Developing ideas and policies that could reshape the world was a big challenge, but also a big opportunity, he said, stressing the importance of “looking through a different eye”.
He said the danger of dealing with crises was reacting in short-term bursts that lacked clarity as to the direction in which the economy was going, which was essential if there was to be a coherent recovery. Emerging countries had dealt with the current economic and financial crisis better than their developed counterparts due to their intellectual independence. In the last decade, Latin America and Asia had repaid their loans to the International Monetary Fund (IMF) and demanded power over their own economic policies. The policy leadership in power during the shaping of the current globalization model was no more, and the current leadership situation was unclear, he said, calling on the United Nations to absorb that reality and play a more active role.
Ms. Bachelet said the Social Protection Floor Initiative built on a coalition led by the ILO and the World Health Organization (WHO) and was part of a larger social protection system. However, access to social protection remained a privilege afforded to few people, she said, pointing out that more than 5 billion people were not covered by adequate social security, and that 1.4 billion lived on less than $1.25 a day. Access to sanitation and drinking water was severely lacking, she said, adding that something deeply and structurally wrong with the way in which systems were run had led to the squandering of economic and human potential. She said that social protection was the essential missing piece in a fair and inclusive globalization. The report showed how social protection had helped stabilize aggregate demand in times of crisis in addition to increasing resilience.
She said Latin America had much experience with social protection, and its extensive application had helped the continent recover better from the crisis. Social protection was a “win-win” investment, working both as a short-term stabilizer in times of crisis and providing long-term productivity gains. She admitted, however, that installing social protection was not easy; it required the right funding and human resources, as well as cooperation of all types. Emphasizing the essential importance of political will, she said key lessons learned included the need for policy coherence. There could be no solution to unemployment without addressing education, which depended on health, which in turn was linked to sanitation and housing, among other fields.
The notion underlying social protection was that everyone deserved access to basic services and no one should live below a certain income level, she said, underlining her belief that basic social protection was better than nothing. Acknowledging that financial stability was important and that many countries would not be able to launch comprehensive protection schemes, she said basic protection focused on identified priorities and could act as a starting point. Schemes should promote and empower, not create dependency, she said, adding that it was about unlocking capacities in all areas of citizenship.
Reiterating the need for political will, particularly in light of the tough economic choices currently facing politicians, she stressed the need for sustainable schemes, saying that if applied properly, they were not only affordable, but would eventually start paying for themselves. She called for the universal adoption of social protection for all, saying policy should be based on each country’s situation and national characteristics. After the initial application, further increases should be envisaged as the economy grew. “The floor cannot become a ceiling,” she stressed.
Mr. Sundaram said young people were significantly affected by the crisis and the problem of underemployment had become much more serious in developing countries. Economic growth, even years before the current crisis, had been “job poor”, symbolizing growth in data but not creating jobs. In fact, income in developed countries had fallen but people had not experienced a significant decline in lifestyle due to the availability of cheap credit, he said, adding that the United States Federal Reserve, for example, maintained a policy of relatively easy credit, which had led to the subprime mortgage crisis. As a consequence the world faced a major debt challenge.
Underscoring the need for innovative thinking, he said sustained investment was an absolute requirement for economic recovery. There was no way to reduce poverty or sustain growth without creating jobs. Promoting renewable energy was a way to deal with global warming and must be supported by a certain degree of cross-subsidization, he said. To meet the energy needs of poor people, it would be necessary to promote renewable energy on a subsidized level, he said, stressing the importance of supplying “green” energy that would not contribute to global warming. There was no way to lift people’s living standards without increasing the generation of renewable energy, he said. That would solve two major global problem — energy poverty and global warming.
In the ensuing discussion — on the launching of the Social Protection Floor Advisory Group’s report titled “Social protection floor for a fair and inclusive globalization” — a key concern expressed by participants was how the social protection floor could be integrated into previously determined development goals in the current changing economic environment. Many speakers asked how its recommendations could be implemented in least developed countries, where capacity constraints and limited resources were rampant.
Ms. Bachelet, responding to a question from the representative of Bangladesh, said the report was fully intended to be a tool for all sorts of decision makers and decision-making bodies. Its recommendations could be applied in different regions and every country needed to find its own path and its own velocity, she said.
In response to questions from the representatives of Bangladesh and France, concerning the report’s impact at the G-20 level, she said she was working closely with the Group’s French Presidency, and they were taking the importance of the social protection floor into account.
Asked by Nepal’s representative how the report dealt with the capacity constraints of poorer countries, she said the report introduced a concept, not a recipe, and that individual States should establish their methods and priorities. Capacity was important, and while the report had given a lot of thought to least developed countries, it was not specific because the basic concept of social protection was universal, she said. Its application would be basic at first, before gradually increasing as capacity grew.
Mr. Sundaram, responding to a question about the food crisis, noted that the French Presidency of the G-20 had opened up the question of food-price volatility, with debate having begun in the Group between those emphasizing the impact of market fundamentals and those underlining that the financialization of commodity futures and options markets had caused the volatility. The question was more complex than that of whether financial injections had made markets more cyclical, he said, noting that it dealt more with the idea of whether increased food production necessarily made people better off.
Regarding the international return to “business as usual” financial policies, beginning after the initial recovery from the collapse of Lehman Brothers, Mr. Somavía told Norway’s representative that the recovery of bank and stock market valuations was the reason. Governments should have imposed conditions for saving the banks, he emphasized, pointing out that once they had recovered their valuations, they had gone back to their old ways. Despite that “missed opportunity”, a second chance had presented itself in the form of the current sovereign debt crisis, he said.
Other speakers participating in the discussion were representatives of Nigeria and Grenada.
Earlier today, the Committee began its consideration of international trade and development and the question of commodities, under its agenda item on macroeconomic policy questions.
Nepal’s representative, speaking on behalf of the Group of Least Developed Countries, said that although trade played a crucial role in promoting sustained economic development in least developed countries, their collective share in the world merchandise trade was just 1 per cent. Doubling that share by 2020, in accordance with the Istanbul Programme of Action, would require strong international measures, including the granting of market access; building human, institutional and regulatory capacity; and removing trade-distorting measures, including subsidies.
Jamaica’s representative, speaking on behalf of the Caribbean Community (CARICOM), said the growing tendency towards regional specialization and less diversification could inhibit long-term growth prospects, and that challenge was particularly acute for developing countries. It was clear that trade was integral to national development, he said, adding that CARICOM had proceeded in good faith towards progressive trade liberalization and supported an open, inclusive, transparent and rule-based multilateral trading system. However, it was averse to liberalization that did not truly promote development needs by allowing full participation in the multilateral trading system.
Australia’s representative, speaking on behalf of the Cairns Group of 19 agricultural exporting countries, said that the Cairns Group, a unique mixture of both developed and developing countries, was determined to secure reform of the agricultural trade, which was fundamental to development and food security. Trade should play a role in economic growth, and trade reform must address food security.
The Russian Federation’s representative said her country was actively supporting the creation of predictable and stable commodity markets, adding that it took a positive view of the intellectual contribution of the United Nations Conference on Trade and Development in analysing international trade, and in stressing that Member States must focus on helping developing and least developed countries to join the global economy.
Nigeria’s representative noted that international trade remained “hostage” to the narrow interests of the global rich, notwithstanding the determination by the majority to resolve outstanding obstacles. Pointing out that African economies were essentially commodity-driven, he said that despite spirited efforts to move forward, the continent remained “the commodity basket for overseas factories”.
Also participating in the general discussion were representatives of Brazil, Cuba, Belarus, India and China.
The Committee will reconvene at 10 a.m. tomorrow, 28 October, to continue its general debate on international trade and development and the question of commodities.
The Second Committee (Economic and Financial) met this morning to begin considering international trade and development, and the question of commodities under its agenda item on macroeconomic policy questions.
Before the Committee was the report of the Secretary-General on international trade and development (document A/66/185) dated 25 July 2011, which describes the uncertain multilateral trading system, saying it needs greater coherence at all levels to ensure that trade contributes to more inclusive development paths. Looking ahead to the thirteenth session of the United Nations Conference on Trade and Development (UNCTAD XIII), to be held in Doha, Qatar, the report says the meeting should aim at making globalization more development-centred, with a greater contribution to inclusive and sustainable growth.
Also before the Committee was a note by the Secretary-General dated 28 July 2011, which transmits the report of the UNCTAD Secretariat on world commodity trends and prospects (document A/66/207). It says that the recovery of commodity markets, fuelled in part by speculative investment, led to market volatility, with prices reaching record highs in 2011. The prices of oil, minerals and precious metals doubled since the end of 2008, while those of all key agricultural commodities, except rice, surpassed the levels recorded in the 2009 report. The surging prices contributed to popular uprisings and food riots, the report notes.
It goes on to state that the negative impacts on global food security and the economic welfare of producers, industry and commodity-dependent developing countries, prompted collaborative global action, including the G-20 Action Plan on Food Price Volatility and Agriculture. The report urges the alignment, resourcing and implementation of global initiatives and national policies to improve market functioning and increase the resilience of commodity-dependent countries. It concludes that the volatility in commodity markets is underpinned by supply constraints stemming from underinvestment in extractive industries and agricultural commodities, and calls for increased and sustained investment to address price variability and imbalances in supply and demand.
The report also recommends income-support programmes, while pointing out the need to simplify and accelerate access procedures to meet the needs of eligible countries. Market-based risk management instruments, such as futures, options and weather insurance, could also reduce volatility but require tremendous effort, the report says, emphasizing also the importance of tighter regulation and greater transparency in reducing volatility. It also urges the adoption of prudent fiscal policies and the management of real exchange rates to reduce dependency on external debt and mitigate the vulnerability of developing countries endowed with mineral resources to “Dutch disease” — the apparent relationship between increasing exploitation of natural resources and decline in manufacturing — and the “resource curse”.
Committee members also had before them the report of the Secretary-General on Unilateral economic measures as a means of political and economic coercion against developing countries (document A/66/138) dated 14 July 2011. It details the view of Member States that such measures are contrary to the United Nations Charter, the norms of international law and the rules-based multilateral trading system, while undermining the sovereign equality of States. Affected Member States stress the extra-territorial dimension of such measures, which extend the application of domestic laws to other countries, and express concern over their negative impact on socio-economic development. According to the report, the Economic and Social Commission for Western Asia (ESCWA), UNCTAD and the Organisation for Economic Cooperation and Development (OECD) reported adverse effects on populations and international trade in affected countries.
Also before Committee members was a Letter from the Permanent Mission of Belarus dated 25 August 2011 and addressed to the Secretary-General (document A/66/323) regarding sanctions imposed by the Government of the United States on four Belarusian companies.
The Committee also had before it the Report of the Trade and Development Board on its fifty-first executive session (document A/66/15 (Part I)), which was held in Geneva on 29-30 November and 2 December 2010. In the report, dated 30 March, the Board’s Chair provides summaries of the session’s plenary meeting, a panel discussion on the scope of a New International Development Architecture for Least Developed Countries, and a review of progress in implementing the Programme of Action for Least Developed Countries for 2001-2010.
Committee members also had before them the Report of the Trade and Development Board on its fifty-second executive session (document A/66/15 (Part II)), which was held in Geneva on 11, 12 and 14 April 2011. Dated 20 June 2011, the report confirms that during the session, the Board approved the theme of “Development-centred globalization: towards inclusive and sustainable growth and development” for the Thirteenth United Nations Conference on Trade and Development (UNCTAD XIII), to be held in Doha, Qatar, in 2012. It also approved sub-themes and preparatory processes.
The Committee also had before it the report of the Trade and Development Board on its fifty-third executive session (document A/66/15 (Part III)), which was held in Geneva on 27 and 28 June, and on 11 July 2011. Dated 19 August 2011, the report summarizes the action taken by the Board on substantive agenda items and its activities in support of Africa.
Members also had before them the report of the Trade and Development Board on its fifty-seventh executive session (document A/66/15 (Part IV)), held in Geneva from 15 to 28 September 2010. It is dated 20 October 2011.
Introduction of Reports
SUPACHAI PANITCHPAKDI, Secretary-General, United Nations Conference on Trade and Development (UNCTAD), introduced the Secretary-General’s report “international trade and development”, warning that the global economy may be on the brink of another recession. Although there had been some progress towards recovery in the last couple of years, it had not been even or sustainable, he said, emphasizing that this was a time of global economic interdependence when trade, finance, capital flows and exchange rates were interconnected.
The increase in trade for developing countries had been rapid in the last decade, with South-South cooperation a major driving force but the benefits of trade had not been distributed equally, he said. Out of 153 developing countries, only 23 were doing relatively well in terms of exporting more than 10 per cent of production over the last decade. An estimated 48 countries had experienced a contraction in exports during the same period.
Developing countries had at least seen a resuscitation of domestic demand, so much so that they were making major contributions amounting to 60 per cent of global demand for imports, he said, cautioning, however, that global recovery had begun to stall in 2010, with growth in developed countries dropping significantly. On the other hand, trade participation in the global economy had given developing countries an opportunity, he said, citing the economic growth in South-east Asian countries.
He urged the international community not see trade as a goal in itself, but rather as a means to development, warning that failure to address the challenges posed by interconnectedness would put future pressure on the trading system and lead to a regression in globalization, which needed reshaping. That would require a policy agenda focused on inclusive development, he said, pointing out that while international trade was vital to growth, the relationship between trade and development had shifted.
Whereas investment used to be the driving factor in shaping export markets, current short-term capital inflows posed challenges for developing economies, including a lack of competition within countries, he continued, calling for greater coherence as a response to that. The economic and financial crisis had highlighted the case for a stronger and more active Government role in hopes of protecting vulnerable trade markets from financial-market volatility.
Pointing out that many developing countries remained dependent on the rural economy, he said there was a need to pay more attention to other income opportunities in the pursuit of inclusive growth. Some countries had been able to achieve faster growth by diversifying their markets, but many least developed countries were lagging behind and required new efforts to tackle volatility and reduce agricultural subsidies that negatively affected trade flows.
He went on to emphasize that the current setbacks in the World Trade Organization Doha Round of negotiations must be resolved. South-South integration and cooperation had become an important platform for sustaining dynamic South-South trade, he noted, adding that Africa’s continent-wide development integration could generate welfare gains amounting to $6.5 billion if trade liberalization was combined with regulatory and development measures.
ANTHONY MOTHAE MARUPING (Lesotho), President, Trade and Development Board, UNCTAD, reported on the Board’s activities of the past year, recalling that its regular session had begun with a high-level segment which, in preparation for UNCTAD XIII, had addressed the subject of volatile capital flows and development — among the most pressing challenges for policymakers in emerging economies. Noting that those economies preferred long-term, steady inflows to support economic development, he said short-term-oriented and volatile capital inflows that might be withdrawn abruptly could adversely affect development.
He said current experiences with short-term capital flows and the resulting currency misalignment had much in common with the “Dutch disease”. Previously the perplexing and adverse experience of commodity-exporting countries, this time the effects of “Dutch disease” were distorted interest rates, which in turn frustrated efforts to develop manufacturing industries, lengthen value chains and diversify the production for both domestic consumption and export.
The Board had also addressed trade and development challenges and opportunities after the global crisis, he said, adding that there was concern that the current wave of globalization had been characterized by “too much finance”, a phenomenon that some referred to as “financialization” of the global economy. The key question was what could be done to “tame finance”. The G-20 recognized the need to tackle some of the most deep-seated economic problems associated with the growing role of finance and the financial sector in national economies, as well as in global economic interdependence, he said.
Moving on to issues of Africa, he said the Economic Development in Africa Report 2011 argued that a new industrial policy for the continent must emphasize the need for Governments to support entrepreneurs and hold them accountable for non-performance. There was a need for more consultation between State and private sectors in the design of industrial policies.
Regarding least developed countries, he said Member States had exchanged views on UNCTAD’s contribution to the implementation of the outcome from the Fourth United Nations Conference on the Least Developed Countries. The challenges and opportunities of meeting the agreed targets contained in the Istanbul Plan of Action, particularly that of enabling half the number of least developed countries to meet graduation criteria by 2020, may have been seen as “extremely ambitious”. However, that target conveyed the strong desire of those countries to break away from aid dependency and the poverty trap, he noted.
As for the upcoming UNCTAD XIII, he said the session and its preparatory process came at a particularly trying time as global authorities struggled with the effects of the financial crisis. It was becoming increasingly clear that the adverse effects of the crisis would be “haunting us for a while longer”, with the poorest countries continuing to suffer disproportionately, he said. To add to the already difficult situation, the Doha Round seemed to have “hit a hitch”, he said. “In other words, we are entering a time full of uncertainty and puzzlement.”
ANA LUIZA CORTEZ, Chief, Committee for Development Policy Secretariat, Department of Economic and Social Affairs, introduced the Secretary-General’s report “Unilateral economic measures as a means of political and economic coercion against developing countries”. She said Member States disagreed with the imposition of such instruments of political and economic coercion, and were concerned about their negative impact on the socio-economic development of the affected countries.
Mr. PANITCHPAKDI, UNCTAD Secretary-General, introduced the report “World commodity trends and prospects”, saying that the world’s commodities problem had fundamentally changed. Volatility had increased in amplitude and the overall price trend had become positive due to increased demand. Concerns over the export prospects of commodity-dependent countries had been replaced by concerns over food crises and related social unrest, he said, adding that developing countries were particularly susceptible because commodities made up a larger share of both their trade accounts and their average consumption baskets. Food and energy prices affected poorer households more profoundly, he said.
In addition to changes in market fundamentals, price movements had also been influenced by the growing trend towards speculative trading in commodities, he said, describing it as the “financialization of commodity trading”, which played a prominent role in amplifying boom-and-bust cycles in commodity prices. While acknowledging some potential benefits of financial investments in commodities, he said commodity markets were likely to follow a more “speculative logic”, characterized by potentially irrational “herd behaviour”, which had increased, heightening the likelihood of price bubbles. Financialization and related speculation had priced many commodities out of the hands of some of the poorest populations, contributing to higher levels of poverty and malnutrition, as well as social unrest, he said.
Producers and consumers should enhance cooperation with a view to stabilizing markets, he said, suggesting the application of market-based risk-management instruments such as futures, options and weather-index insurance. However serious efforts would be needed to build the necessary institutional mechanisms to train the users of such instruments. He went on to emphasize that “financialized” commodity markets required greater regulation and transparency to help reduce volatility, and outlined policy recommendations.
Increasing transparency in physical markets would allow more information on spare capacity, global stock holdings for oil, and other data, he continued. Financial-market participants should be more tightly regulated, with position limits and prohibitions on proprietary trading, he said, praising the recent strengthening of regulation by the United States Commodities Futures Trading Commission and the European Commission. He also suggested a mandate for market authorities to intervene directly in exchange trading to deflate price bubbles, saying it would be a way to break the informational cascades underlying herd behaviour by announcing when it considered prices to be out of line with fundamentals.
Secretary-General PANITCHPAKDI responded to a question by the representative of Morocco concerning UNCTAD’s role in the restructuring of global trade policies by underlining the vital importance of promoting the coordination of global policy. By spending more and creating jobs, people could pay more taxes, therefore helping Governments pay down debt. The economic and financial downturn had been a crisis of debt that had been socialized, with “regular people” bearing the brunt of repayment for it. Resolving the debt crisis must be done in a systematic way, he said, pledging that UNCTAD would, with the full participation of all stakeholders, promote the strengthening and reinforcement of global efforts to deal with the crisis. He pointed out that Asia had emerged from the crisis mainly through, and warned against trade-restrictive measures.
Replying to the representative of Brazil concerning the upcoming UNCTAD XIII he said job creation was high on the agenda. He also said that banks should be made to perform traditional banking tasks rather than playing the role of “engineers” of the global economy. A shift from finance-led to development-led globalization was of the utmost importance, he stressed, describing inclusive development as the way of the future economy. It would ensure growth, empowerment, equality, real investment flows and technology transfer, he added.
The representative of Nigeria commented that the international community must bear in mind the possibility of developing countries, particularly those in Africa, increasing their productivity, and called for innovative ways to ensure links between investment, productivity and trade.
SHANKER BAIRAGI (Nepal), speaking on behalf of the Group of Least Developed Countries and associating himself with the “Group of 77” developing countries and China, said that although trade played a crucial role in promoting sustained economic development in least developed countries, their collective share in the world merchandise trade was just 1 per cent, concentrated on a few export products.
He said that realizing the goal of doubling that share by 2020, in accordance with the Istanbul Programme of Action, would require strong international measures, including the granting of market access; building human, institutional and regulatory capacity; and removing trade-distorting measures, including subsidies. Expanding the role of the private sector while ensuring diversification and product quality were also critical, he added.
Renewing the call for development partners to further enhance assistance to least developed countries in support of Aid for Trade and the European Investment Fund, he said that would provide incentives for developed-world enterprises and institutions to promote the transfer of technology and create a viable technological base in least developed countries, while helping them foster regional and subregional cooperation on trade facilitation. He also urged the international community to conclude the Doha Round with an ambitious, comprehensive, balanced and development-oriented outcome, warning that failure to do so would have severe implications for efforts to eradicate poverty and hunger and for sustainable development in least developed countries.
On developing a global partnership for development, he said Millennium Goal 8 should be achieved on the basis of an open, inclusive, equitable, rule-based, predictable and non-discriminatory multilateral trading and financial system, responsive to the development challenges facing least developed countries. He also called for actions to diversify export bases and reduce the adverse effects of commodity-price volatility. Welcoming the G-20 Action Plan on Food Price Volatility and Agriculture, he called, in that regard, for the concerns of least developed countries to be granted top priority in its implementation.
CHRIS JOHN STOKES (Australia), spoke on behalf of the Cairns Group of 19 agricultural exporting countries (Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand and Uruguay). He said that the Cairns Group, as a unique mixture of both developed and developing countries, was determined to secure reform of the agricultural trade, which was fundamental to development and food security.
Open, fair and functioning domestic and international markets encouraged investment and created new opportunities for growth, he said. Trade should play a role in economic growth, and trade reform must address food security, including the need to eliminate all forms of export subsidies and reduce tariffs through the Doha Round. He said country representatives had expressed strong disappointment that it had not been possible to bridge the remaining gaps in agriculture negotiations, despite efforts this year at the thirty-sixth Ministerial Meeting of the Cairns Group, held from 7 to 9 September in Saskatoon, Canada. Those attending had discussed the international trade-policy environment and the Doha Round negotiations, he added.
RAYMOND WOLFE (Jamaica), speaking on behalf of the Caribbean Community (CARICOM), said the growing tendency towards regional specialization and less diversification could inhibit long-term growth prospects, and that challenge was particularly acute for developing countries. It was clear that trade was integral to national development, he said, adding that CARICOM had proceeded in good faith towards progressive trade liberalization and supported an open, inclusive, transparent and rule-based multilateral trading system.
He said the bloc had demonstrated that commitment through the CARICOM Revised Treaty of Chaguaramas, which allowed free trade, free movement of capital and people and the right of establishment within the Community. However, CARICOM was averse to liberalization that did not truly promote development needs by allowing full participation in the multilateral trading system. As such, it supported Aid-for-Trade measures to address the need of developing countries for more than just market access. CARICOM had sought consideration of the constraints and circumstances of small, vulnerable economies in the Doha Round, particularly as the precarious economic situation and volatile commodities markets could potentially erode their development gains.
That made it even more imperative to integrate a development dimension into any trade agreement, he emphasized, saying that such an agreement must provide increased market access for CARICOM’s key exports and full recognition of the asymmetries between developing and developed countries. While progress on Doha had been “glacial”, he acknowledged some progress and called for the political will to take the necessary confidence-building steps to prevent total failure. Delegates at the Eighth Ministerial Conference of the World Trade Organization would have to make a choice “between stasis and progress in our efforts to consolidate the creation of a fair, equitable, and effective rules-based international trading system”, he added.
IRINA MEDVEDEVA ( Russian Federation) said her country attached great importance to trade as an important tool of economic growth. An increase in trade among countries of the South had shown broadening regional initiatives, particularly in Asia, she said, noting that the Russian Federation had signed a new trade treaty with seven Commonwealth of Independent States (CIS) countries, thus expanding trade in the region. Underscoring the need for the World Trade Organization to respond to changing economic challenges, she pledged her country’s commitment to the principles of that body, saying the Russian Federation was now in the final stages of joining it.
Underlining the negative impact of high prices and speculative investments in agricultural and non-agricultural markets on the global economy, she welcomed the implementation of concrete steps adopted during G-20 meetings. She said her country was actively supporting the creation of predictable and stable commodity markets. It was important to continue to address food-security problems and to prepare for the “green market”. She said the Russian Federation took a positive view of UNCTAD’s intellectual contribution in analysing international trade, and in stressing that Member States must focus on helping developing and least developed countries join the global economy.
JOAO LUCAS QUENTAL NOVAES DE ALMEIDA (Brazil), associating himself with the Cairns Group, acknowledged the crucial role of trade in development, pointing out that the Istanbul Programme of Action was the latest international agreements to reaffirm its importance. Brazil was committed to a universal, rules-based, open, non-discriminatory and equitable trading system, he said, warning against protectionism and singling out the negative impact of exchange-rate misalignments on international trade. “Manipulation caused by excessively expansionary monetary policies, as well as by artificially fixed exchange rates, should be strongly discouraged,” he stressed.
He went on to note that shifting exchange rates had direct as well as indirect effects on trade, as the World Trade Organization’s Working Group on Trade, Debt and Finance had acknowledged. Although there were ways to mitigate sensitivity to exchange-rate volatility, many of them were unavailable to developing countries. The Russian Federation supported comprehensive discussions at the World Trade Organization’s dedicated workshop on the relationship between exchange rates and trade, in hopes that it would suggest tools that the agency could use to address the issue of exchange-rate misalignment and trade.
Brazil hoped the Doha Round would lead to the elimination of agricultural-export subsidies and a reduction in other domestic support measures by developed countries, in conjunction with enhancing market access. He also expressed hope that the meeting would focus on strengthening the World Trade Organization as a credible and effective venue for multilateral trade negotiations, through an honest assessment of the Doha Round and realistic goal-setting for the future. While acknowledging that it might not prove possible to conclude all elements of the Doha Development Agenda, he stressed the importance of sending a clear message of forward movement.
ILEIDIS VALIENTE ( Cuba) said the international trade system was at a crossroads, and the stalling of the Doha Round, with no signs of progress, was very discouraging. During innumerable meetings and negotiations, developing countries listened to the rhetoric of their developed counterparts, but in reality it was the latter’s inflexibility in relation to World Trade Organization trade regulations that had stalled trade reform, she said, emphasizing that the negotiations must conclude with balanced and fair reform that would ensure that the criterion of reciprocity allowed developing countries to benefit under the system.
She said her country continued to advocate transparency and inclusiveness, despite the insistence by certain countries on functioning under policies based on “opposite principles”. Promises by developed countries to combat protectionism had not been met, which had exacerbated the plight of developing countries, she said. The current economic and financial crisis had proved that the current international order, in which liberalization prevailed, was not working. She called for the elimination of unilateral trade embargoes, such as the “ridiculous” one imposed by the United States on her country, and stressed that Cuba would continue to work on the agenda of ensuring fair trade for all Southern countries.
SERGEI SERGEEV ( Belarus) said the success of the international trading system would depend on a conclusion to the Doha Round and an acceleration of the negotiation process for joining the World Trade Organization. Particular attention should be paid to how multilateral trade could accelerate the integration of advanced technologies into the agriculture and energy sectors, he said, adding that his country was keen to participate.
Building a global economy resilient to crises like the current one required that developed countries provide developing ones with preferential trade terms, he said, underscoring the importance of exempting those countries from tariff and other trade barriers as a precursor to vibrant international trading. Emphasizing that a second wave of global crises could not be accepted, he said protectionist measures, especially against vulnerable States, must therefore be forbidden. The United Nations should take appropriate measures to help low- and middle-income countries, taking into account their development levels and individual needs.
He said the current multilateral trading system should shun sanctions and the use of unilateral measures against vulnerable countries, adding that politically motivated views could limit the basis for future bilateral cooperation, and have a negative effect on international trade by undermining the sovereign equality of States and the entire multilateral trading system. Belarus had been under United States sanctions due to its choice of President, he said, adding that there was no basis for that decision. Without eliminating the practice of applying politically coercive sanctions, the multilateral system could not be properly mobilized to tackle crises, he added.
VIPLOVE THAKUR (India), associating herself with the Group of 77 and China, said the ability of developing countries to address their development challenges was negatively affected by the recessionary trends seen in the global economy’s traditional engines of growth. The international trade framework should remove barriers and adhere to the recommendations of UNCTAD’s report on trade and development, which emphasized strict financial regulation and policies promoting sustainable development. Commodities were key export items for developing countries, she said they were disproportionately bearing the burden of the negative impact of market volatility, she said.
Welcoming the declaration by G-20 Agriculture Ministers establishing the Action Plan on Food Price Volatility and Agriculture, she said she looked forward to the Agricultural Market Information System, which hopefully would address high prices and regulate speculation in a tougher manner. In tandem with those developments, developing countries should diversify their export baskets, she urged. Noting that least developed countries were overwhelmingly dependent on trade for growth, she said they had less than 1 per cent of the global share, and expressed hope that an enabling environment would be created through the Doha Round.
CHEN JIAN PING ( China) said history showed that free and equitable trade was an important source of development financing for developing countries. However, the Doha process remained stagnant and trade protectionism and friction was on the rise, he said, adding that the major economies should support trade for development and promote the conclusion of the Doha Round negotiations, paying special attention to the interests of least developed countries.
He called on the international community to take effective action to restrain the rise of trade protectionism, end the abuse of subsidies and oppose the tendency to politicize trade tensions. As the world’s number-one exporter of goods, China was important in efforts to promote realization of the Millennium Development Goals through trade initiatives, he said, noting that the country had met international demands to join the World Trade Organization and was committed to “zero-tariffs” for more than 95 per cent of products originating in developed countries.
GODKNOWS BOLADEI IGALI ( Nigeria) said international trade remained “hostage to the narrow interests of the global rich, notwithstanding the determination by the majority to resolve outstanding obstacles. Developing countries’ efforts to reform trade policies had been undermined by the breakdown in the Doha negotiations, but since the global economy could not afford to resign itself to “a comatose international trading framework”, there was momentum for the creation of innovative balancing strategies, he said. Nigeria’s trade policy was aimed at integration into the global market system, which would involve diversification, liberalization and effective participation in trade negotiations, he said, pointing to his country’s Transformation Agenda, which held trade and investment to be the linchpin of its international engagements.
Pointing out that African economies were essentially commodity-driven, he said that despite spirited efforts to move forward, the continent remained “the commodity basket for overseas factories”. Reliance on commodities for development capital meant that such countries must contend not only with the vicissitudes of natural conditions, but also with the uncertainty of the external environment. He warned that prospects for recovery appeared on the horizon alongside the risk of proliferating bilateral agreements, which meant that efforts would be needed to align the development concerns at the centre of the Doha Round. A greater focus on implementation and policy review was needed, he stressed, adding that it might also be necessary to enhance trade-related capacities to avoid non-implementation and disputes.
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