10:28 AM Mar 25, 1997

UNCTAD BOARD DISCUSSES LDC MEET

Geneva 25 Mar (Chakravarthi Raghavan) -- An executive session of UNCTAD's Trade and Development Board provided broad support Monday for the High-Level Meeting on Integrated Initiatives for Least Developed Countries' Trade and Development, with speakers stressing the need for a focused agenda and a "tangible and measurable" outcome from the meeting.

The dates for the high level meeting -- with the participation of aid agencies, multilateral financial institutions and the least developed countries -- tentatively proposed for 26-27 June, appears to be running into problems because of a meeting being planned by the World Bank and the Canadian government around the same time.

There was no direct mention of this at the Executive Board, but the remarks of Canada (about the dates), the interventions of the EU and some others indirectly hinted at this clash.

UNCTAD Secretary-General Rubens Ricupero advised the Board that the Chairman of the WTO's CTD, Amb. Baichoo of Mauritius, and its subcommittee on LDCs, Amb. Ms. Herfkens of Netherlands, are going to Washington to brief the World Bank's executive board and others in Washington to bring them on board as quickly as possible.

The idea of such a meeting to deal with the problems of the least developed countries (LDCs) who by and large have been marginalised in the world economy and the multilateral trading system came up in the runup to the 1996 Singapore Ministerial Meeting of the WTO.

The idea of the WTO Director-General Renato Ruggiero for enhanced market access for the LDCs -- mooted at the G-7 Lyon Summit, and subsequently during the preparatory process for the Singapore Ministerial, and at the Ministerial meeting itself -- through WTO commitments received short shrift at the hands of the industrial countries - with the US making clear that it could not get it past the Congress, and the EC willing only to provide some autonomous concessions within the framework of the generalized scheme of preferences (GSP).

But the recommendation of the WTO's Committee on Trade and Development (CTD) and the General Council was accepted by the Singapore Ministerial Conference which agreed to "organize a meeting with UNCTAD and the International Trade Centre" as soon as possible in 1997, with the participation of aid agencies, multilateral financial institutions and the LDCs to foster an integrated approach to assisting these countries in enhancing their trading opportunities.

Declaration endorsed the idea of a special high level conference to be organized jointly by UNCTAD, WTO and the ITC, with the participation of the funding agencies and bilateral donors.

The three secretariats in a joint paper to the UNCTAD Board have said that Geneva where the WTO, UNCTAD and ITC have their headquarters would appear to be the "natural" and most cost efficient venue for the meeting. Given the time needed to coordinate and agree on a common approach and agenda, 3-4 months of preparations would be needed, but that at the same time the momentum of the Singapore Ministerial meeting should be maintained. Keeping these, and in order not to overlap with other international conferences, the three secretariats have proposed the meeting to be held at end of June, immediately after the G-7 Denver Summit (21-23 June).

Ricupero told the executive board session that such a high level meet offered a chance to launch a new initiative to tackle the problems facing the LDCs in an integrated and coherent fashion. It was important for this to involve the LDCs' development partners, particularly the Bretton Woods Institutions. Towards this end Amb. Baichoo and Amb.Herfkens were both going to Washington to brief the Bank's Executive Board and others and "bring them fully on board as quickly as possible."

The high-level meeting, Ricupero said, should not be an end in itself, but a further step in the continuing process of promoting development cooperation at the global level in favour of LDCs.

Discussions at the meeting were likely to focus on two main issues: market access and a programme of integrated trade-related technical cooperation within a coherent policy framework.

However,the agenda of the meeting had by no means been finalised, and the Board's views would help in arriving at an agreed agenda.

On Market access, Ricupero recalled UNCTAD's own work in this area as well as the proposals of the WTO head, Mr. Renato Ruggiero at the 1996 G-7 Lyon summit and to the Singapore WTO meeting, where he proposed zero tariffs for LDC exports, and said improving market access for LDCs in developed country markets was a means of assisting LDCs to develop within a sustainable framework.

While there have been significant reductions in tariff levels, non-tariff barriers still imposed major restrictions on trade.

The rules of origin had also become excessively complex, more stringent and more exclusionary. "It is extremely difficult for exports of LDCs, which are at the initial stages of building up competitive production structures, to meet these strict 'origin' requirements," he added.

The WTO Plan of Action for LDCs had recommended autonomous actions by developed countries and the more advanced developing countries to enhance market access for LDCs on an autonomous basis and Ricupero hoped they would respond positively to the challenge.

The UNCTAD head also spoke of the technical cooperation activities to enable the LDCs to ease the supply side constraints, and the need for the development partners of the LDCs, particularly the World Bank and UNDP to ensure policy coherence in trade and trade-related development assistance to LDCs.

"The issue of policy coherence is of crucial importance if LDCs are to derive maximum benefits from efforts of the international community," Ricupero told the Board. "The Bretton Woods Institutions must take the lead, but all of us must ensure that policy prescriptions offered to LDCs by our respective institutions reinforce each other in this connection," Ricupero added drawing attention in this connection to the UN General Assembly resolution inviting UNCTAD, World Bank and UNDP to improve collaboration in country-level programs for LDCs as well as overall macro-economic and sectoral policy dialogue of these countries at the World Bank consultative groups and UNDP Round tables.

Coherence of Fund/Bank policies with the commitments of LDCs as WTO members would increase the complementarity and synergies of trade and trade-related policies and would significantly enhance the net benefits accruing to LDCs and would ensure that the LDCs utilise the special and differential measures of the Marrakesh Declaration to restructure their economies, Ricupero added.

There have been many initiatives in the recent past by UN bodies, in their individual capacities or collaborating with each other to address trade and trade-related issues in LDCs or in African countries (which form the bulk of the LDC group -- 33 out of 48), and this highlighted the need for clarity in definition of objectives and mode of implementation of UNCTAD's pilot technical cooperation programmes. How to package these, not only to avoid duplication but increase value added was a major challenge for the success of the high-level meeting, the UNCTAD head added.

In the ensuing discussions, Netherlands for the EU, said the LDC meeting should be held at the UN's Palais des Nations in Geneva - a remark which many delegates took to mean that the WTO venue was not favoured.

In other comments, Morocco said a paper with the participation of LDCs should be prepared, and it should not cover too many subjects.

Switzerland said that it had decided to extend its GSP scheme to LDCs to provide for duty-free entry on industrial products, and some liberalization on agriculture. While the integration of the developing countries and the LDCs in particular into the multilateral trade system had been accomplished institutionally, it was necessary to translate this into their increased participation in international trade. Switzerland was contributing three million dollars each to the technical assistance programmes of UNCTAD and the ITC in this regard.

Both Haiti and Mexico wanted the involvement of UNIDO in the high-level meet on LDCs. Bangladesh called for a focused agenda and some tangible and manageable achievements to come out of the meeting, particularly on market access and removal of constraints.

Nepal noted that the reality of the world economy was that a large number of countries had not benefited from the Uruguay Round. Singapore called for an operational content to come out of the LDC meeting, and it should not be limited to trade alone.