10:37 AM May 11, 1996

CONFERENCE ON TRADE AND DEVELOPMENT WAS MOVING TOWARDS A CLOSE

Negotiators worked well into the night of Thursday trying to find compromises on difficult issues, mostly in the trade/development area, with a few remaining ones, having a political implication to be taken up Friday and solved in the Committee of the Whole.

While the hosts and the secretariat is pushing to close the conference Friday night, this will depend on theability to produce the document in all languages for adoption.

While bits and pieces of paper of the compromises in various areas were floating around a full and clear pictureof the outcome of the conference would be available only late Friday evening when the full document is put together and become available.

But as of mid-day Friday, the picture emerging is that UNCTAD would come out of Midrand, no worse than at Cartagena UNCTAD-IX, where its focus and mandate were considerably clipped.

The mandates being given here, in terms of analytical work, dialogues and discussions for future work, technical support and advise, provided the secretariat uses them intelligently and by constructive interpretations, UNCTAD as an important, universal forum for development work could be turned around.

In terms of programmatic work, UNCTAD's mandate to deal with global interdependence and development issues has probably come out in a more focused and strengthened way, and would enable the secretariat and the Trade and Development Board in its annual discussions to focus clearly both on the plus and minuses of the socalled globalization phenomenon.

UNCTAD has also received a specific mandate to look into the entire gamut of issues on investment, including the Multilateral Investment Framework. After considerable disputation, the US and EU have agreed to this.

As one of the advisors in an EU member country put it privately, once the EU and its Commission realised that if the issue is kept out of UNCTAD, then a number of major developing countries may join to block any work in the WTO, they came around.

However, whether this will prove to the advantage of the developing countries or become another millstone around their neck would depend upon how the UNCTAD, secretariat handles it, whether it will bring objective academic expertise (which seems to be lacking inside the secretariat) to bring to bear on the issue, or whether it will continue the TNC advocacy role that portions of the secretariat is now adopting.

The study to be done to make an objective assessment of implications of the MIA would depend on empirical and objective study, starting with a check list of issues, of:

*the role of foreign investment in development of a country, both on the plus and minus side.

*the kind of role that the State has to play in this to promote development of the country, with backward and forward linkages,

*the access to technology and its domestic development, and again the transfer of technology, not only by the TNC to a subsidiary or branch or affiliate, but promote wider diffusion of the technology,

*The way the TNCs are being used by their home countries to promote a more general mercantalist advantage to the disadvantage of the host countries,

*measures, national and international, to be taken to maximise the benefits and minimise or counteract the disadvantages, including the leverage that the home countries of TNCs would get,

*the multilateral rules and disciplines that would be needed to ensure the beneficial results, and ensure that they do not disadvantage the overall economy and prospects of host country and its enterprises, both in the domestic economy and in export trade,

*the obligations that the home countries of the investor would undertake, in terms of disciplining their TNCs, in return for the rights they would gain for their outword investors,

*the kind of socio-economic problems that arise or come in with the foreign investment and the manner in which solutions could be found, and

*the institutional arrangements that would be needed for multilateral framework that may have some trade elements, but has many others not within the ken of any trade institution.

In the trade area, the outcome here would help to reduce the controversies over UNCTAD duplicating the work of other institutions, and enable it to analyze and address the various trade issues and rules in their development context.

With come constructive and imaginative work, the mandate and the one for technical assistance to developing countries to implement the Uruguay Round and use the opportunities, could be used to help and strengthen the hands of the developing countries to participate more effectively in the WTO system, how to safeguard their rights and, where found necessary, seek changes to remove their disadvantages; and also help developing countries to negotiate effectively both the built-in and the future trade issues.

The UNCTAD's current mandate on debt and resources appears to have been weakened here, in terms of the inter-governmental machinery atleast. However, the general and the strengthened mandate on analytical work on interdependent issues is probably enough to bring to bear publicly a development focus to this whole range of issues and problems.

But whether these impressions of delegations and observers, who have been present in the closed drafting group meetings, needs to be judged by a study of the final full document.

And whether the scope of the mandates and programmes can be beneficial would depend on how the restructured secretariat is used till the next conference, and whether it is able to go to the next conference in Thailand with a clearer and more comprehensive view of what it wants to get.

(Note: A analysis of the outcome of UNCTAD-IX would be carried in the Suns 3758)