South Asia Watch on Trade, Economics & Environment (SAWTEE)

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UNCTAD XI: a mixed bag
Published: The Kathmandu Post, 25 June 2004
By: Ratnakar Adhikari

Exactly a fortnight back when I wrote a column titled UNCTAD XI: A Window of Opportunity, I was very much hopeful that it would indeed be the case. However, after having participated at the Conference held at Sao Paulo from 13 to 18 June, I tend to feel otherwise. UNCTAD XI was not able to deliver to the extent that one would feel happy about it. Indeed, it can be considered as a missed opportunity in terms of furthering the development objectives through trade. Building on my previous column in which I discussed about six major issues to be taken up at the Conference, what I attempt to do here is to analyse the outcomes of the Conference in relation to those issues. The analysis will also provide an opportunity to see as to what extent the developing countries were successful in incorporating these ideas. One of the major – rather gratifying – experiences was to see the developing countries maintaining their cohesiveness during the entire process of UNCTAD XI, building on their ability to withstand the pressures from the developed countries, as was visible during the Cancun Ministerial Conference of the WTO. Let us now turn to analyse those six issues as they appear in one of the final documents of the Conference titled Sao Paulo Consensus.

First, paragraph 77 of the Consensus underscores the need to intensify the efforts at extending market access liberalisation for non-agricultural products under the Doha Work Programme with the aim of reducing or eliminating tariffs, including tariff peaks, high tariffs and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries.

However, by putting a small qualifier "as appropriate" just before eliminating tariffs (above), developed countries have managed to wash their hands off. Arguably, developing countries had fought for the deletion of this qualifier, but they could not reach too far.

Secondly, the use of hortatory language in the case of services liberalisation, in particular in the area of the liberalisation of temporary movement of service providers as mentioned in paragraph 78 speaks for itself. The paragraph does mention: "Developing countries underscore the importance to them of effective liberalisation of temporary movement of natural persons under Mode 4 of GATS." By not making any commitment, the developed countries have absolved them of any responsibility to even morally bind themselves on the liberalisation of this mode of service delivery. This is a major failure of the developing countries’ negotiators.

Thirdly, developed countries were able to dupe and mislead the developing countries in the areas of standards too. There is nothing new in Paragraph 79 where it is mentioned that standards and technical regulations must be developed transparently and applied non-discriminatorily, and should not pose unnecessary obstacles to trade. Further, as if to prove that developed countries were providing generous technical assistance to the developing countries, the paragraph further mentions that developing countries should continue to be provided with technical assistance and capacity building support to meet standards effectively. This paragraph represents another major failure of the developing countries’ negotiators.

Fourthly, paragraph 81 merely reiterates the rhetoric that the outstanding implementation issues and concerns are a matter of utmost importance to developing countries and should be addressed in a manner consistent with the Doha Work Programme. Nothing concrete has been proposed in the line of making sure that the commitments made at Doha Ministerial Conference of the WTO are honoured by the developed countries.

Fifthly, as per the paragraph 82, special and differential treatment (S&DT) should be conceived as a developmental tool addressing developing countries’ particular needs and reviewed with a view to making them more precise, effective and operational, in order, inter alia, to facilitate the beneficial and fuller integration of developing countries into the rules-based multilateral trading system. It further states that the work so far undertaken on agreement-specific S&DT proposals, as well as cross-cutting issues, should be further pursued to yield a meaningful and development-oriented outcome consistent with the objectives set out in the Doha Declaration. This paragraph is somewhat better formulated and is likely to be of some help the developing countries.

Finally, despite the Cancun Ministerial having failed to address the issues relating to the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement and its relationship with Convention on Biological Diversity (CBD), a ray of hope has emerged for the gene-rich South as well as their farmers and indigenous communities. As per paragraph 88 of the Consensus, "Full attention and support should be given to the protection, preservation and promotion of traditional knowledge, innovation and practices and biological resources of developing countries."

The above mentioned spirit is also captured by paragraph 101 of the Consensus which essentially entrusts UNCTAD with the responsibility to undertake analysis of the development dimension of TRIPS, including protection of traditional knowledge, genetic resources, and folklore and fair and equitable sharing. Though the addition of a phrase "without prejudice to the work undertaken in other fora" towards the end of the sentence is an attempt to provide supremacy to the works carried out in the developed countries (read corporate interests) friendly UN bodies such as the World Intellectual Property Organisation (WIPO), it would still serve a meaningful purpose to the developing countries wanting to protect their natural and traditional heritages.

Despite a rather dismal performance at Sao Paulo, UNCTAD XI was successful in making some headway in the direction of furthering the trade and development interest of the developing countries. Three such issues are particularly noteworthy.

First, trade ministers gathered at Sao Paulo reached agreement on language recognising that the national autonomy (policy space) of developing countries has been constrained in the past by "rule-based regimes for international economic relations". The Sao Paulo Consensus recognises the tradeoffs between entering into such regimes and the panoply of options that may be available in the realm of national economic policy vis-à-vis trade, investment and industrial development.

Secondly, despite the original proposals by some developed countries to confine UNCTAD’s role merely to providing technical assistance at the national level, developing countries’ push for a stronger role for the institution bore some fruits. The agreed text notes UNCTAD’s "special responsibility to contribute to the achievement of the international development goals, including those contained in the Millennium Declaration".

Finally, UNCTAD XI ended with a renewed commitment on the part of large developing countries to accommodate the interests of the least developed countries (LDCs) by providing preferential market access, among other initiatives. The need to promote South-South cooperation on trade and development issues was also highlighted during the Conference.

Developing countries went to Sao Paulo with the hope that they would be able to elevate the position of UNCTAD in the areas of international economic policy making, but they came back feeling dejected. This is definitely not a good sign for the crucial WTO negotiations on Doha Development Agenda planned in Geneva next month.

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