UNCTAD/EDM/MISC/2003/38
Trade and Development Board: UNCTAD’s role as a think tank on trade and
development more relevant than ever
The fiftieth session of UNCTAD’s Trade and Development Board (TDB) met in Geneva from 6 to 17
October. The topics on this year’s agenda included interdependence and global economic issues, a review
of the post-Doha Work Programme, Africa’s trade performance over the last 20 years, and market access
preferences in least developed countries.
Debate on interdependence: need for policy space emphasized
The current fall in export demand and commodity prices has shown that some developing countries are
more vulnerable and less able to respond to fluctuations than others. Whereas Asia appears to be coping
well, thanks to an expansion of domestic demand and strong intraregional trade, Latin America and the
Caribbean have been the worst hit.
In Africa, the global slowdown has had less impact, but other factors – the HIV/AIDS pandemic, political
instability and armed conflict, steadily declining commodity prices, and insufficient inflows of official and
private capital – have brought on a real development crisis. If growth prospects in Africa do not improve, it is
unlikely that the Millennium Development Goals will be reached, especially the goal of halving poverty by
the year 2015.
Experts examining the relationship between capital accumulation, economic growth and structural change
agreed that economic and policy reforms in Latin America and Africa during the 1990s had not yielded the
results expected in terms of growth and improvements in productive capacity and productivity. Although
capital accumulation was recognized as a prerequisite for sustaining growth and reducing poverty, the East
Asian crisis hadshown that the structure and quality of public and private investment also mattered if
industrialization, productivity growth and structural change were to be achieved.
International policy arrangements should not deny developing countries the right to maintain their own policy
space. This right is essential if they are to develop local industry and achieve more balanced integration into
the world economy.
Cancún: a wake-up call for the international community
The TDB held a special session on the review of the multilateral trading system and the Doha work
programme. This was the first major international discussion on trade issues since the World Trade
Organization (WTO) conference in Cancún, Mexico (10–14 September 2003).
Development is at the heart of WTO’s Doha Work Programme, which is intended to address the needs and
interests of developing countries and provide fairness and a level playing field for them as weaker partners.
So far, however, they have accrued few benefits – and this despite substantial contributions in areas such
as trade and agriculture.
Yet, when assessing the outcome of the
Cancún conference, delegates agreed that there
was no better alternative than the multilateral trading system and that every effort should be made to
put the Work Programme back on track.
countries where agriculture is highly subsidized;
increased productivity for tropical beverages such
as coffee, cocoa and tea (owing to technological
advances and greater land use); and the emergence of new, non-traditional producers.
The lack of consensus on key areas of negotiations, missed deadlines and the slow pace of agricultural reform in developed countries were singled out by delegates as some of the reasons for
the recent setback in the multilateral trade negotiations. Trade negotiations are increasingly perceived as an international public good, and developing countries are now demanding to be heard
and taken into account. Although not an end in
itself, trade is a means of securing balanced, equitable and sustainable development.
To remedy these problems, careful management
of capital flows and exchange rates is needed.
Compensatory policies should be introduced, production diversified and upgraded, and subsidies in
developed countries removed.
Future negotiations should give priority to the
issues directly concerned with trade liberalization
and development and should take into account the
social and adjustment costs incurred by developing countries. To be effective, trade arrangements
and policies should be implemented through realistic and mandatory measures. If the development
agenda is to be made a reality, developing countries themselves should put in place national policies that respond to trade, developmental and
financial needs. Targeted and comprehensive
capacity building and technical assistance is also
needed to build supply capacity and secure safety
nets.
To help developing countries assess the development gains they derive from the international trade
system and in particular the trade negotiations,
UNCTAD has developed a series of benchmarks.
Diversification needed to revive African trade
In a special session devoted to the review of
UNCTAD’s study on Africa’s trade performance
over the last 20 years, Secretary-General Rubens
Ricupero outlined three issues deserving particular attention: the erosion of preferences, preferential agreements and global commodities policy.
Africa relies on the export of a limited number of
products, mainly commodities, whose prices continue to fall, resulting in worsening terms of trade.
At $200 billion, terms of trade losses in commodities alone are now equivalent to the total outstanding debt of sub-Saharan Africa. The drop in commodity prices is mainly a result of oversupply; a
surplus of commodities produced in developed
Preferential trade schemes for LDCs should be
improved
UNCTAD studies show that even where preferential trade arrangements have helped reduce
poverty, it is not clear whether these positive
effects are sustainable. Least developed countries
(LDCs) that have successfully used preferential
trade arrangements to reduce poverty and
enhance growth – and there are relatively few –
should be rewarded with more permanent
schemes.
During a panel discussion on the impact of preferential market access initiatives for LDCs, Mpho
Malie, Lesotho’s Minister of Trade and Industry,
described how the United States’ African Growth
and Opportunity Act (AGOA) has helped his country develop its clothing and textile industry. The
sector’s employment has risen from 19,000 jobs in
1999 to 55,000 today. But, worries Mr. Malie, what
will happen if the preferences are ended?
This lack of dependability is one obvious reason
why preferences have not been more widely used.
But stringent rules of origin and weak supply
capacities in most LDCs are also obstacles. To
make preferences more effective, said Mr. William
Cline of the Institute for International Economics in
Washington, D.C., the period of applicability
should be extended; rules of origin should be simplified; the initiatives should be extended to all
goods; and tax exemptions should be offered to
foreign investors with a view to overcoming supply
constraints in the host countries.
The issues of interdependence, commodity prices,
trade preferences and negotiations will be among
the themes to be addressed at UNCTAD’s
eleventh ministerial conference (UNCTAD XI) next
June in Brazil.
The full report of the TDB (TD/B/50/14) can be found on the
UNCTAD website at http://www.unctad.org.
UNCTAD XI - São Paulo, Brazil,
13–18 June 2004
Coherence between national development strategies and the multilateral approach to economic growth will be at the heart of the debate at
UNCTAD’s eleventh ministerial conference.
What are appropriate development strategies in a globalizing world?
How can the multilateral trading system help meet development
goals? How can developing countries improve their productive capacity and increase competitiveness? How to strengthen cooperation
among development partners?
UNCTAD XI will provide a timely opportunity to debate these questions and to launch partnerships with non-governmental organizations
and the private sector.
For more information, visit the UNCTAD website
at www.unctad.org.
Developing the productive sector:
a priority concern of UNCTAD XI
Following are excerpts from Secretary-General Rubens Ricupero’s
address to the 50th session of UNCTAD’s Trade and Development
Board (6–17 October 2003).
“The idea of the growing interdependence between developed and developing countries has been a constant inspiration for UNCTAD since its
inception. Allow me to underscore this by mentioning that in 2001 – which
was not the best of years – developing countries relied on developed
economies’ markets for about 57 per cent of their exports. That is very
high, but it is already down from 69 per cent in 1980, which means that
we are rebalancing the picture somewhat. But that same year, developing
countries accounted for 48 per cent of Japanese exports, around 43 percent of exports from the United States and 34 per cent of exports from the
European Union, excluding the EU’s intra-trade. Needless to say, the economic fate of different regions and countries is more intertwined than ever.
Interdependence is what we would like to have as a basis as we prepare
for our eleventh conference in Brazil. Interdependence, but with the
strengthening of developing countries as a source of imports and growth;
… also the idea that we should foster trade negotiations, addressing
areas like commodities and others that have not been receiving enough
attention, and preparing ourselves for an open debate on such subjects
as the links between trade and poverty, trade and gender, and trade and
culture, all of which will be part of our preparations and which we will have
the opportunity to address in the future. And, taking into account another
overall concern for us all, namely, the need to devote more attention to the
development of the productive sector…I personally feel that sometimes
we have oversold the value of trade negotiations, in the sense that of
course they are extremely important, but the most they can achieve when
they are successful is to create export opportunities. In order to take
advantage of those opportunities, we need in fact to have a supply capability to provide the market with goods and services. I would suggest that
one of the reasons the Asian countries have been successful is that they
developed their supply capability better than other regions – and this, by
the way, is why they generally have a more proactive attitude in trade
negotiations; they feel they can face the competition on better terms.
These are just some of the ideas that might help guide us in the days
ahead.”
Civil society prepares for UNCTAD XI
During the 50th session of UNCTAD’s Trade and Development Board
(6–17 October 2003), civil society representatives held parallel meetings
to determine their involvement in UNCTAD XI – both in the run-up to the
conference and in the conference itself.
For the first time since its creation, UNCTAD is organizing “hearings” with
civil society organizations (CSOs) as part of the preparatory process for
its quadrennial ministerial conference. The hearings will bring together
member States, non-governmental organizations (NGOs) and the private
sector, and will provide an opportunity for dialogue on the four subthemes
of the conference. There will be two hearings (16 January and
23 February 2004).
The hearings will be open to CSOs with UNCTAD observer status and to
those accredited to UNCTAD XI and its preparatory process. The selection criteria for accreditation are based on the relevance of the CSO’s
activities to the work of UNCTAD, its legal and financial status, its membership and the potential contribution it can make. Applications should be
received by 31 March 2004.
For more information visit the civil society webpage or contact the UNCTAD secretariat
(fax: +41 22 907 00 56; e-mail: cso@unctad.org).
Looking ahead
12–15 January 2004
Commission on Enterprise, Business Facilitation and
Development, eighth session
26–30 January 2004
Commission on Investment, Technology and Related Financial
Issues, eighth session
For more information visit UNCTAD’s website: http://www.unctad.org/
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