Nov 23, 1990

COMMITTEE FLAGS SOME ISSUES FOR UNCTAD-VIII.

GENEVA, NOVEMBER 21 (TWN) – The UNCTAD Committee on Commodities which ended its fourteenth session, the last before next year's Conference, Tuesday has agreed on a number of issues to be explored at the Conference and in the preparatory work for it.

The agreed conclusions adopted by the session, which met from November 12-20, also identified areas for future work by the Committee.

In its review of the commodity situation, the Committee noted that price levels for many commodities of importance to the Third World remained depressed and that many of the countries continued to experience shortfalls in export earnings. For many commodities the long-term trends in prices have tended to decline.

In the light of this situation and the outlook, the Committee suggested that UNCTAD-VIII should deal with the structural disequilibria in commodity markets and determine "actions to bring about a better supply and demand balance, giving attention to efforts to improve demand".

Another topic suggested for the Conference, as well as at future meeting of the Committee, was "access to markets following the outcome of the Uruguay Round".

The Conference it was agreed should also explore "lasting solutions to deal effectively with short-, medium- and long-term problems in the commodity area" as well as the "complimentarily between domestic and international commodity policies".

The Conference, the Committee suggested, could consider "both domestic and international investment flows and the creation of a competitive favourable enabling environment for development including social and physical infrastructure" and, "where feasible and appropriate", strengthen producer/consumer cooperation.

The Committee agreed on this last that international commodity agreements and arrangements, "where they involve the participation of all major producers and consumers and where they aim at improved transparency and better functioning of commodity markets", have an important role to play in resolving commodity problems. .

The operation and functioning of existing agreements, the Committee agreed, should be improved.

The process of consultations between producers and consumers on individual commodities not covered by existing arrangements whether international commodity agreements or study groups should only proceed where progress has been made.

This implied a go-ahead only for the bauxite consultations, but without excluding future prospects of cooperation in other areas since the Committee is to keep under review developments in setting up producer/consumer fora which could effectively promote transparency and better functioning of commodity markets.

The Committee agreed that international cooperation on diversification of the economies and exports, as well as on processing, marketing and distribution including transportation should continue and has stressed the need for identifying specific practical measures and actions, especially for the highly commodity-dependent and low-income countries.

However, for the time being work on these issues will no longer be dealt with in a working group but within the Committee itself. For this purpose the next session of the Committee would be extended by two days. Further work in this area will be decided by UNCTAD-VIII.

The Committee would also discuss at its next session the issue of commodity exports earnings shortfalls and compensatory financing for this in the context of its regular comprehensive review of the commodity situation and outlook.

The Group of 77 had sought separate consideration of this issue but there was consensus on this.

All facets of the export earnings shortfalls and compensatory financing issue would be considered by the Committee - compensatory financing, hedging, commodity swaps, etc. The Committee is also to pay attention in its future work to the opportunities for expansion of trade for the Third World generated by the changes in Central and Eastern Europe as well as through south-south trade.

The issue of competitiveness and demand for environmentally friendly products vis-à-vis synthetics and substitutes is also to be explored by the Committee as part of integrating within its work the issues of environment and sustainable development.