THIRD WORLD SHOULD ADVANCE ITS OWN AGENDA

6:50 AM Jul 2, 1996

THIRD WORLD SHOULD ADVANCE ITS OWN AGENDA - RICUPERO
Geneva 1 July (Chakravarthi Raghavan) -- "The Group of Seven reflect the point of view of a particular group of countries, which is advancing its own agenda for the negotiations, and it is up to the developing countries to advance their own agenda," UNCTAD Secretary-General Rubens Ricupero commented Monday on the G-7 communique and what they wanted the WTO's Ministerial meeting at Singapore to do.

Ricupero recalled his comment last week at the ECOSOC, in New York, on the likely outcome of Singapore, and said that just as at the Punta del Este launching of the Uruguay Round, the outcome at Singapore will have to be a "compromise between the different agendas -- the agendas of the industrial countries and that of the developing countries."

But while the industrial countries, in the OECD and the Group of 7, have many differences among themselves, they seem to be united to maintain the status quo, against the challenges from the South and its newly industrializing countries and the emerging economies, and preserve the benefits that present system assures for the rich North.

The developing countries, with their differing situations and relationships with individual dominant countries of the North had no coordinated and common positions at the GATT even before Punta del Este and during Uruguay Round, though some major nations of the South did attempt to coordinate and support each other.

In the post-Uruguay Round period, there is very little of this -- with the informal group of developing countries at the WTO dis-functional.

In their Lyon communique, the G7 called for high priority to successfully conclude by June 1997 at the OECD a multilateral agreement on investment -- with high standards of investment protection and liberalization.

In terms of the WTO and the Singapore meeting, they called for:

* full and effective implementation of the Uruguay Round results according to the agreed timetables (emphasis added) -- thus ruling out the proposals of developing countries for accelerated liberalization of access in areas of importance to them like textiles and clothing, footwear and other labour-intensive industries, fish and fisheries products, high tariff peaks and tariff escalation problems;

* conclusion of a 'mutual beneficial Information Technology Agreement';

* substantive recommendations out of Singapore to ensure WTO rules and multilateral environmental agreements and ecolabelling schemes are mutually supportive -- thus endorsing their own demands in the Committee on Trade and Environment on "exceptions" from WTO/GATT rules for MEAs and ecolabelling schemes;

* beginning an examination at Singapore of trade and investment and working towards a consensus that might include possibility of negotiations;

* discussing the interactions between trade and competition policy with a view to determining how to proceed;

* exploring new industrial tariff initiatives in sectors to be agreed by consensus.

The G7 also said: "We also recognize there is a will to address the question of the relationship between trade and internationally recognized labour standards". While differences within the G7 have precluded their going further on this, the US, France and the EU's Executive Commission clearly favour start of work on this at WTO.

At his press conference, Ricupero drew attention to his own presentation at the session of the ECOSOC, now taking place in New York -- where he appeared and participated in a discussion along with the heads of the World Bank, IMF and the UNDP -- and said that his remarks presented the views of what developing countries expect in terms of the 'Agenda of Unfinished Business in International Cooperation'.

He referred to the fact that currently growth in developed economies had decreased or was decelerating, that of the developing countries as a whole had increased and was expected to accelerate. In this evolution, an important element had been the autonomy of economic growth in certain developing countries visavis the traditional locomotive of growth in the industrialized world.

This accelerated internally generated growth, particularly in Asian economies, and their increased import demand had become of significant importance for the exports of the developed countries. This import expansion demand was the result not merely of economic growth, but due to unilateral trade liberalization programmes of the developing countries during and after the Uruguay Round.

While now only four of the OECD members -- Japan, Turkey, New Zealand and Australia -- had more liberal trade regimes at the close of the 1980s than at its beginning, there had been 60 cases of unilateral liberalization in developing countries.

This, he said, would suggest it was high time to modify outdated cliches about developing countries lagging behind in terms of trade liberalization. It was also time to look for further trade liberalization, "not only in new issues, but elsewhere: tariff peaks tariff escalation, sensitive products, the abuse of remedies like anti-dumping... areas like agriculture, textiles and clothing, footwear, and leather goods (where) liberalization process is still at a very incipient stage.

The facts of what developing countries were already doing for themselves and the global economy, Ricupero told ECOSOC (copy of his intervention was made available Monday by UNCTAD's press office) should help a balance, "somewhat distorted by an almost unilateral insistence on the first and incomplete balance of the development equation, that is domestic efforts".

Having described what developing countries were doing for themselves and for the international community as a while, it would not be inappropriate or impertinent to ask what the international community was willing and ready to do for the cause of development.

The UNCTAD head cited the advice of the ILO for a coordinated strategy of economic expansion in the G-7, the recent remarks of the Bank of International Settlements about the role and feasibility of central banks "to resist both inflation and deflation", the World Bank's recent remarks that the prospects for developing countries would depend on "continued significant policy adjustments in industrial countries"

On the eve of the G7 meeting, Ricupero expressed confidence at ECOSOC that a solution would soon be found for debt owed by the poorer nations to official creditors and multilateral financial institutions.

But the G7, at Lyon though, have dashed such hopes of any immediate actions and, even if the proposals of the Fund and the Bank go through over the next few months, relief to the poor nations from multilateral indebtedness would be only after 3-4 years at a minimum -- after they implement for two periods adjustment programmes!

Whether the Fund, Bank and WTO heads, at Lyon echoed as strongly their views in publications and speeches that Ricupero cited before the ECOSOC, and whether the UN Chief was able to do so, is not very clear from media and public reports.

But the final communique does not indicate these have had any effect on the G7 who, merely advanced their own agenda for the WTO, and in terms of the UN system and cooperation amongst the UN, IMF, World Bank and WTO, or the restructuring of the UN repeated their proposals.

In terms of UN reform, the G7 have called for merger of the three UN secretariat departments responsible for development under the authority of a single Under Secretary-General who should notably serve as Executive Secretary of ECOSOC in order to enhance the ECOSOC's policy formulation and coordinating role.

Well, keep your seat belts; it has all been tried before.

When Mr. Boutros Boutros-Ghali was appointed and took over on 1 January 1992, at the instance of the United States, he merged all the economic and social sector divisions of the UN into one. While a Chinese national was named to head the new division, his principal advisor was an American.

The office of Director-General of International Economic Cooperation and Development (created by the UN General Assembly), who supposedly had a coordinating role over all the UN economic and social programmes, and with UN specialized agencies, was also abolished.

After nearly two years, the new division had become so unworkable that it had to be split up again into three divisions, and later the UNDP head was named as an advisor to Boutros-Boutros Ghali to coordinate the entire UN economic and development activities.

And the G-7 who are all for human rights, pluralism and democracy in developing countries, give the impression of their fear of pluralism in international discourse.

They want the proposed new Under-Secretary-General to carry forward the rationalization of UN's economic analysis and reporting in consultation with other organizations involved in economic analysis such as the IMF, the World Bank and the OECD, with a view to eliminating duplication.

If the "duplication", that enabled contrary views and doubts to be expressed had not been there, the developing world would still have been implementing the deflationary approach to adjustment and attempting to pay the unpayable debt and debt service.

But the Fund, Bank and the OECD have all been uncomfortable over the last few years at the challenge to their orthodoxy emanating from the UN system and which have been proved right forcing these G-7 dominated institutions to modify their own views, and their bureaucracies have been trying to stifle dissent, and the US non-payment of arrears and budget-cuts are now being used to achieve the same aims.