May 2, 1987
BLUEPRINT FOR INTERNATIONAL TRADING SYSTEM TO BE SOUGHT.GENEVE, APRIL 29 (IFDA/CHAKRAVARTHI RAGHAVAN) – The Group of 77 will seek at UNCTAD-VII agreement on initiating work at UNCTAD on a blueprint for "a universal, non-discriminatory, comprehensive, stable and predictable trading system which will respect fundamental principles underlying the international legal order". This is among a number of specific policy measures and decisions in the area of international trade proposed for UNCTAD-VII at last week’s Sixth Ministerial Meeting of the Group of 77 at Havana. The range of policy measures and decisions include also a call on the UNCTAD Secretary-General to analyse the services issue from the viewpoint of third world countries and in the context of "promoting and ensuring their autonomous development", and work out the "appropriate problematic" for trade in services. In its assessment of international trade, the group underscored that UNCTAD must continue to play a central role in the formulation, negotiation and implementation of measures in the sphere of international trade and its inter-relation with debt, money and finance issues in a development context. UNCTAD’s major role in the years to come should be that of continuing to provide a universal forum for bringing about the establishment of a truly international trading system with the major aim of facilitating self-reliant development of the third world. While the successful conclusion of the Uruguay round of MTNS is "a necessary condition" for the evolution of such a truly international trading system, such a system could not emerge as "a natural, much less inevitable, consequence of the MTNS", and UNCTAD is the only forum where such a system could be forged. In their proposals for UNCTAD-VII to start work on the blueprint for the system, the G77 said the system should facilitate increase in third world participation in world exports and achieve "equitable distribution of gains from trade". "The improved and strengthened system shall be oriented towards development and growth and incorporate differential and more favourable treatment for developing countries as an integral part, not as an exception from its rules and principles". It should also take account of the special problems of Least Developed Countries (LDCS), be fully responsible to development objectives in the area of commodities, and contain a mechanism for redressing Restrictive Business Practices (RBPS) of TNCS. The new system should be founded "on the new international consensus to be generated on the objectives of development and employment", the G77 propose. Actions on monetary and financial matters, transfer of technology, services and other relevant areas should be made "compatible and consonant with the established objectives of the system". The system would need supportive measures in the international monetary and financial sphere to allow for improved conditions, which would facilitate dealing with third world debt on the basis of an integrated strategy oriented towards development and growth. On services, the G77 proposals request the UNCTAD Secretary-General to analyse, from the point of view of third world countries and in the context of promoting and ensuring their autonomous development and economic growth, the issues being raised by industrialised countries in regard to trade in services. The objective of the analysis, the G77 suggest, "is to ascertain the need for an examine the implications of a multilateral framework for trade in services and not ‘liberalisation’ of, or removing ‘the barriers’ to trade in services". For third world countries, the G77 say, the issues of transfer of technology and the RBPS of TNCS, "are of paramount importance in the area of services". The UNCTAD Secretariat should analyse "the wider implications, including political, cultural and security aspects" of any international regime governing trade in services. The UNCTAD Secretary-General is also requested to work out the "appropriate problematic" for trade in services, keeping mind that revolutionary changes in telecommunications and telematics provide a new and easy medium for transactions in services around the globe. "More often than not", the G77 say in this connection "new technologies are making transactions in services across national borders more difficult to monitor and control. The problematic for services must take this into account, for which an approach based on the general agreement on tariffs and trade may not be relevant or adequate". In the area of protectionism and structural adjustment, the G77 propose that the industrial countries "shall respect multilateral trade rules and principles, including their commitments to provide differential and more favourable treatment to the third world, and strictly comply with the standstill and rollback commitments". Industrialised countries, the G77 propose, shall establish "a transparent and independent mechanism" at the national level to examine the need for protectionist action sought by firms or sectors, and the mechanism, shall also monitor the observance of the standstill and rollback commitments. Industrial counties are also asked to establish transparent and independent national mechanisms to draw up programmes for facilitating structural adjustment in sectors of particular export interest to the third world, and monitor the implementation of such programmes. On both these matters, there should be periodic reports to UNCTAD for the consideration of the trade and development board. In the area of market access, the G77 call on industrialised countries to: --Improve access to their markets for products of export interest to the third world, including manufactures and semi-manufactures, --Liberalise agricultural trade by eliminating restrictions and distortions, particularly those of tariff and non-tariff barriers and subsidised exports, and bring all such measures under strengthened and operationally more effective GATT rules and disciplines, --Ensure total liberalisation of trade in tropical products and those from natural resources, --Liberalise trading regime in textiles and clothing by removing discriminatory restrictions against the third world and integrating the regime into GATT, and --Eliminate escalation of tariff and non-tariff barriers affecting products of export interest to the third world countries at higher stages of processing. Industrialised countries are also asked to continue to improve the generalised scheme of preferences, inter alia through expansion of product coverage, and without impairment to the multilaterally agreed principles of its generalised, non-discriminatory and non-reciprocal character. The special problems of the LDCS and the particular problems of "land-locked and island developing counties" are asked to be kept in view in undertaking these tasks. Multilaterally agreed commitments in the area of trade in goods should not be linked to concessions in areas like investment, intellectual property and services, and there should be no linkage between negotiations in goods and those covering these areas. The RBPS of TNCS shall be brought squarely within the operation of the system through an obligation for transparency and consultation procedures, establishing a special committee in UNCTAD to monitor the application of the multilaterally agreed set of rules and principles for control of RBPS, and for continuing work in UNCTAD for establishing "a legally binding framework" in this area. As regards the Uruguay round MTNS, the G77 propose that the UNCTAD Trade and Development Board should closely follow developments in the round and appraise them as to their implications for the trade and development interests of the third world. The Board is also asked to study particular aspects of the negotiations in order to formulate specific recommendations for transmission to appropriate bodies, giving priority in this exercise to implementation of rollback of protectionist measures against third world countries and reaching a comprehensive understanding on safeguards based on MFN rules. The UNCTAD Secretary-General is also asked to provide advice and technical assistance to the third world countries in the MTNS to enable them to participate more effectively in the negotiations. The UNDP is to be requested to consider favourably requests from UNCTAD and individual countries for increased financial resources for this exercise. On East/West and East/South trade relations, the G77 propose that the Socialist countries take measures to contribute fully and effectively to the third world efforts to diversify and intensify their trade, and to provide a growing share of their imports, including semi-manufactures and manufactures, from third world countries. The Socialist countries are also requested to make further improvements in their GSP schemes, improve the terms and conditions of credits to the third world, enlarge their economic assistance and increase the share of convertible currencies in resources made available for financing third world projects, and development of "a flexible and efficient" payments mechanism in trade operations, and special attention paid in all these areas to the need and requirements of LDCS. The Secretary-General of UNCTAD is to be requested to carry out the necessary consultations with relevant governments for initiating "a process of negotiations leading to a further strengthening of trade and economic co-operation between the developing countries and socialist countries of Eastern Europe".