‘Concerted and Coherent’ Action Urged in Addressing Current, Future Development Challenges in Context of Global Financial Crisis

24 April 2012
TAD/2055

‘Concerted and Coherent’ Action Urged in Addressing Current, Future Development Challenges in Context of Global Financial Crisis

24 April 2012
Press Release
TAD/2055
Department of Public Information • News and Media Division • New York

‘Concerted and Coherent’ Action Urged in Addressing Current, Future Development

 

Challenges in Context of Global Financial Crisis

 

(Received from a UN Information Officer.)

DOHA, QATAR, 24 April — In the context of the current global financial crisis and the shifting geography of growth dynamics, Member States should embark upon “concerted and coherent” action to address current and future development challenges, experts said this morning as the Thirteenth Ministerial Meeting of the United Nations Conference on Trade and Development (UNCTAD XIII) held its third round table discussion in Doha.

“When the crisis ends, it seems we all go our own way,” UNCTAD Secretary-General Supachai Panitchpakdi said in his opening address.  There must be more coordination and coherence among global trading partners, not only because the end of the current crisis was “not yet in sight”, but “because there are new challenges coming up all the time”, he added.

Countries needed to better understand each other and the Conference could play an important role in strengthening global coherence, he continued.  For example, it could put pressure on countries that were “moving in the wrong direction” with regard to how their trade affected global development aims, he said, citing the current use of subsidies by some countries.  It could also provide forewarnings of other policies that posed risks to development.

One particular area requiring further consideration was the ways in which emerging and developing countries could play a more prominent role in sustainable development, he said.  Moreover, the discussion should take into account the fact that the emergence of a “new [global] South” was not opposed to the positions of developed countries.  Developing countries — even those that were newly amassing large amounts of wealth — still lagged far behind developed ones in areas such as social development.  “We must still be looking at all the attributes,” not just the accumulation of dollars, he stressed.

Paul Magnette, Belgium’s Minister for Public Enterprises, Scientific Policy and Development Cooperation in Charge of Policy for Large Cities and the panel's moderator, stressed the need for today’s dialogue to focus on how to strengthen existing forms of partnership that could contribute to sustainable development while identifying new forms that could support those aims.

Prior to the morning’s open discussion, nine panellists briefly addressed issues related to those two specific themes, placing a particular emphasis on priority areas such as trade financing, services, trade in food and agricultural products, and aid-for-trade initiatives.  The panel featured Anabel Gonzalez, Minister for Foreign Affairs and Trade of Costa Rica; Hanna Tetteh, Minister for Trade and Industry of Ghana; Rob Davies, Minister for Trade and Industry of South Africa; Sam Tan Ching Siong, Senior Parliamentary Secretary of Singapore; Pascal Lamy, Director General of the World Trade Organization (WTO); Clement Duhaime, Administrator of the International Organization of la Francophonie; Jean-Louis Erka, President of the African Export-Import Bank; Talal Abu‑Ghazaleh, a Senator from Jordan and the Chairman and founder of the Talal Abu-Ghazaleh Organization; and Mohamad ibn Chambas, Secretary-General of the African, Caribbean and Pacific States Group.

Participants generally agreed that bilateral and multilateral trade should be viewed as a means to an end, and not as an end in themselves.  Instead, trade policies should be modified to achieve other objectives, including development, sustainability and human rights.  In addition, they stressed that there was no “one-size-fits-all” approach to devising trade policy and considering their priority objectives.

The panellists also offered unique perspectives on how to strengthen trade partnerships.  Some emphasized the need for greater focus on regional and continental trade, while others said that the most essential requirement was to elevate the position of developing countries in the new reality of global value chains.  Still others stressed the necessity for developing countries — particularly the least developed ones — to diversify their trade partnerships, while others highlighted the importance of ending the perpetuation of “low-ambition aims” in the area of development.  Meanwhile, one participant underscored the changing trajectory of trade and development in the “knowledge age”.

Discussion

Ms. GONZALEZ opened the discussion by reporting on the outcome of an UNCTAD‑backed international policy dialogue held in late March 2012 which focused on exploring all facets of the rapidly changing international trade landscape.  The diverse group of participants had noted several key trends, including the growing links connecting trade factors to other development objectives such as environmental protection, human rights and gender policy.

She went on to say that there was agreement that there was no “one-size-fits-all” path for trade policies or negotiations governing multilateral trade talks.  As for the long-stalled talks on the Doha Development Round, she said many participants in the policy dialogue had stressed that perhaps it was time to seek new paths out of the deadlock, including a broadening of the discussion to encompass actors outside traditional Government and intergovernmental negotiators.

Ms. TETTEH noted that four years after UNCTAD XII, the world remained at odds over how to foster an open and enabling global trade environment.  As such, it was necessary, for African countries at least, to “first think regional, then continental, before examining ways to strengthen South-South trading partnerships”.  As strategies expanded continent-wide, however, there was a need to monitor closely the unique aspects of each region when establishing trade rules and regulations.

Mr. DAVIES called for strengthening the links between the trade and development aspects of relevant global negotiations, pointing out that development priorities had often been sidelined in such talks, which was the root cause of the stalemate in the Doha Round negotiations.  One of the keys to overcoming many of the lingering obstacles was to ensure that developing countries were better able to deliver jobs, social progress and development for their people.  “We must consider the appropriate ways in which they can place themselves higher in the trade value chain,” he said, adding that it was not necessary to expend energy and time in opening new avenues of negotiation.  The nettlesome issues that had “bedevilled” international trade negotiations must now be tackled head on.

Mr. TAN, however, said WTO negotiators must not be afraid to consider new and innovative ways to break the deadlock.  Trust would be built on all sides as such efforts progressed.

Mr. LAMY said that partnerships and cooperation instruments — actually the core of international trade — were becoming increasingly multilateral.  “I don’t think it is ever a bad idea to be guided by reality in these discussions, and the reality is that today’s international trading system is morphing and becoming less bilateral and more multilateral,” he said, noting the “explosion” of trade and supply chains.  While it was indeed time to consider a new paradigm, it was still necessary to ensure that global trade rules were fair and that markets were open to a growing number of partners.

Mr. DUHAIME, highlighting the experiences of la Francophonie, said the organization had long sought to “walk in step with and empower developing-country partners” and lobbied them to take the lead in formulating their own strategies and trade plans.  La Francophonie had also continued to press for recognition of the special situation of least developed countries, he added.

Mr. EKRA also focused on the experience of his organization, saying that while the African Import-Export Bank had noticed an improving global trade environment, there would be further progress if Africa could integrate even further into international trade networks.  Trade between African countries and other partners from the developing world was important, but it was vitally important that they change their patterns of behaviour.

Mr. GHAZALEH called on UNCTAD and WTO to become knowledge-based organizations so that they and their members could be better able to take advantage of the benefits offered by new media, information and communications technology and Web-based services.  “This is where the playing field is most level; the Internet is more democratic than anywhere in the world,” he said, adding that one of the outgrowths of the past decade’s technology explosion was that the world was no longer unipolar.  Agreeing with calls for a new global trading paradigm, he said that such shifts in thinking must also be applied to other aspects of the issue.

Indeed, the “knowledge age” demanded that traditional categories and affiliations, particularly “developed” and “developing”, must be revisited in order to better define the real capacities of emerging economies and trade partners.  Further, the notion of consensus as it related to global trade talks “no longer works because there is no longer a single country that can twist everybody’s arm”.  Finally, he urged pushing for a greater role for private sector actors, which should now be considered equal partners in all aspects of trade.

Mr. CHAMBAS agreed that all stakeholders must endeavour to maintain the development dimension in international negotiations, especially to help address supply-side constraints that prevented developing countries from participating in global trade.  It was also necessary to bolster regional integration, as well as to ensure flexibility and creativity to overcome the Doha impasse.  He expressed support for deepening South-South trade, among and between African countries on the one hand and Latin and Caribbean nations on the other, noting that if African, Caribbean and Pacific States were better integrated into the world trade environment, they could better contribute to the broader effort to attain internationally agreed development goals.

In the ensuing discussion, a representative of Iraq stressed that it was critical for developing countries to share their experiences of trade liberalization, noting that his country had been subjected to dumping once it had opened itself up to trade once more.  A representative of the European Union said it was important to remember the differences between various African countries.  While there was a need for policy space, rule-based systems were also needed.

A representative of the African Union acknowledged that interregional partnerships were important, but pointed out that progress had been slow and a new paradigm was needed.  African countries could not continue to sign on to agreements that were detrimental to the continent.  Partnerships did not rule out other relationships, but some partnerships should be prioritized according to benefits.

Mr. GHAZALEH said in response to those comments that it was natural for intraregional partnerships to be prioritized for greatest mutual benefit.  “I cannot understand the partnership between the elephant and the mosquito,” he added, noting that North-South relationships were often marked by that kind of inequality.  There were “tremendous” opportunities between countries of the South and East at the moment, particularly given the economic slowdown in the developed world.

Mr. LAMY, responding to questions about regional and international trade agreements, said trade had enjoyed the greatest progress among the Millennium Development Goals.  On subsidies, he said he did not know how they could be dealt with in a multilateral way, adding that more must be done with regard to multilateral relations in WTO.  It was clear that development aid based on trade had increased greatly and that a working formula was being followed.  Global regulation of financing for international trade would have consequences, he cautioned, stressing that it could only be multilateral and bilateral.  If negotiations were blocked, it was not because of the consensus rule.  Problems must be examined in a political way because they were political, he added.

Ms. GONZALEZ discussed the importance of developing countries participating in high-tech global value chains, noting that her country had previously been known for bananas and coffee, but was now producing microchips, which had benefitted the country greatly, as had production chains in partnership with India.  Trade facilitation through regional and international agreements was important, but trade itself was the key, she emphasized.  People needed to be taken out of subsistence production and brought into trade for purposes of development.  A coherent agenda was essential to enhancing national competitiveness and must include education, infrastructure and other areas.

Mr. DAVIES agreed on the importance of higher value-added activities, but noted that export subsidies were a barrier to such activities in developing countries, especially in agricultural areas.  Unfortunately, a deal to eliminate the most damaging subsidies could not be found, which did not bode well for a larger deal on subsidies in general.  In addition, the developed world was in a period of low economic growth, and did not provide developing countries with much opportunity for marketing.  That was why emerging countries must look towards partnerships with other emerging countries.  Trade measures alone were not the biggest issue in interregional trade, as a host of others must be faced, he said, stressing also that some of the sticking points in African negotiations went well beyond the WTO talks.

Ms. TETTEH stressed that bilateral arrangements must naturally be mutually beneficial, noting that South-South and South-East trade were indeed critical at the moment.  Current trade development agreements were certainly not performing, and such arrangements must be “win-win” or they would not succeed.  “Everyone must agree that there is something in it for them,” she emphasized.

Mr. TAN said that rather than working only for broad trade agreements, it was often better to start small.  All bilateral trade agreements contributed to a full trade regime, and related negotiation processes could work at the level of the highest common denominator.  For example, Singapore’s bilateral free trade agreements had set the stage for wider trade agreements within the context of the Association of Southeast Asian Nations (ASEAN).  In that region, free trade agreements, as well as cooperative projects to develop human resources, communications and transport, were key elements of regional integration, he said.  A multitude of worldwide cooperative projects could weave together into a trade regime beneficial for development.

With the discussion opened to the floor again, a representative of Viet Nam agreed that bilateral and regional trade agreements were a basis for progress, and expressed interest in building greater cooperation.  A speaker from Botswana noted that the most important participants in trade, the private sector, did not have prominent seats in trade negotiations, saying that in that and many other areas, a paradigm shift was needed, given the difficulty in finalizing the Doha talks.

Ms. TETTEH said it was critical for arrangements to build up industrial capacity and ensure that smaller companies could be part of value-added chains.  After decades of agreements and partnerships, Ghana was still mostly dependent on raw commodity exports, for example.  Something must therefore change, she affirmed.

Mr. GHAZALE reiterated his call on all stakeholders to bring private sector actors into decision-making processes on trade negotiations and promoting development.  He also urged the establishment of an entity that would bring together agency heads, political officials and business and industry leaders to tackle trade issue in a unified manner, coordinate plans and policies, and find ways to avoid duplication.  “The bottom line is that 50 per cent of the work done by international organizations is wasted due to duplication,” he pointed out.

Mr. LAMY agreed that business should be more involved in trade matters, but also noted that the private sector had long played a role in influencing trade and lobbying Governments for certain objectives.  More should be done to enhance the participation of small and medium-sized enterprises in international markets, whose input had been systematically sidelined.  Something as simple as providing them with letters of credit — “which are as old as banking itself” — could help them promote sustainable development and economic growth, he noted.

Mr. MAGNETTE, summing up the discussion, said the panellists had emphasized, among other things, the increased role that developing countries needed to play in the supply chain, including participation in value-added sectors like technology; the genuine need to strengthen regional integration in such a way as to foster investment in human capital based on a more holistic approach; and the necessity to tackle adequately, at the multilateral level, long-term trade-distorting factors such as tariffs.  As for the role of UNCTAD, he said it should continue to play its role of providing a forum for progressive discussion of all trade and development issues.

The Meeting will reconvene on Wednesday, 25 April, to hold a round table on “Addressing persistent and emerging development challenges as related to their implications for trade and development and interrelated issues in the areas of finance, technology, investment and sustainable development”.

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For information media • not an official record
For information media. Not an official record.