11:44 AM Oct 8, 1996

LDCS PUT FORWARD 8-POINT PROPOSAL

Geneva 7 Oct (Martin Khor) -- The group of Least Developed Countries (LDCs) have put forward a eight-point set of proposals to improve their situation in international trade, particularly in the World Trade Organisation.

The proposals were put forward on the opening day of UNCTAD's Trade and Development Board 43rd Session here today by Mr Farouk, Secretary of the Bangladesh Commerce Ministry, on behalf of the LDC group.

Speaking at the first meeting of the sessional committee on LDCs, Mr Farouk said the LDCs are not yet well placed to take advantage of the Uruguay Round's opportunities.

"In fact, the opportunities for LDCs stemming from the Uruguay Round are expected to be indirect and would perhaps materialise in the long run," Mr Farouk added. "In contrast, the challenges arising out of it are more immediate."

This, he said, was due to four reasons: erosion of preferences; limited number of exportable items resulting in their inability to participate effectively in global trade; higher prices for import of food, pharmaceuticals and essential capital goods; and increased administrative cost of compliance with their Uruguay Round obligations.

To enable LDCs cope with the post-Uruguay Round challenges, said Mr Farouk, the international community, UNCTAD, WTO and the Bretton Woods institutions should assist the LDCs.

He proposed the following eight measures:

* There should be proper assessment of gains and losses arising out of implementation of the Uruguay Round agreements and provision of compensation of losses suffered by weaker countries. The LDCs' proposal during the 1995 Mid-term Review of the Programme of Action for LDCs to set up a "safety net" to meet the adverse effects of these agreements should be concretised.

* The commitment to supportive and flexible application of rules in favour of LDCs, as set out in various Uruguay Round agreements and instruments, should be operationalised.

* The possibilities of enhancing market access for LDCs need to be explored. This could include zero tariffs for LDC exports, elimination of import quotas, promotion of LDC exports within the framework of regional trading arrangements (RTAs), and special trading arrangements between developing and developed country RTAs.

* The notification procedure, which is complicated in many cases, should be reviewed and rationalised to enable LDCs to fulfil their obligations.

* LDCs should be accorded supportive treatment in all future negotiations relating to the Uruguay Round, to ensure that their obligations from these agreements are consistent with their level of development and their economic and trading conditions.

* LDCs need to be extended adequate technical assistance in the form of consultancy services, advisory missions and training facilities. This would enhance their institutional capacities to fulfil their Uruguay Round obligations and enable them to expand and widen their export base and diversify their export markets.

* The international community should take special measures to alleviate problems of LDCs facing additional constraints arising out of their land-lockedness. Resources should be given to implement recommendations at the General Assembly's 50th Assembly.

* The Ministers attending the WTO Conference should adopt additional measures to support LDCs.

Mr Farouk also said that debt relief measures taken so far were insufficient and called for cancellation of the debt of all LDCs.

Pointing out that total external debt of LDCs had risen from $117 billion in 1990 to $127 billion in 1994, Mr Farouk said the current LDCs' debt stock was equivalent to nearly three-quarters of their combined GDP.

"This is indeed an alarming situation," said Mr Farouk. "The debt relief measures taken so far have proved insufficient to reduce their liability to a sustainable level." He called on donor countries and multilateral financial institutions to adopt remedial measures, including "debt cancellation of all LDCs irrespective of their level of indebtedness."

Earlier, introducing the subject, Mr Chandra Kant Patel, Officer-in-Charge of UNCTAD's Office for LDCs, elaborated on short and long term technical cooperation programmes required by LDCs. In the short term, he said, a "priority needs package" was crucial to smooth LDCs' implementation of the Uruguay Round. It should comprise programmes to facilitate restructuring to comply with the Uruguay Round agreements; facilitating accession of non-member LDCs to the WTO; identify new trading opportunities; and optimal use of opportunities under the GSP.

Mr Patel said long-term financial and technical assistance to LDCs should focus on measures to:

* ease supply-side constraints to improve competitiveness of domestic production;

* support trade diversification and enhance supply capacity of tradeable goods and services within regional trading arrangements; and

* strengthen LDCs' negotiating capacity to participate effectively in future WTO negotiations to articulate their development priorities and safeguard their trading interests.