G77 SEEK REAL DIALOGUE FOR GLOBAL SOLUTIONS

5:58 AM Nov 14, 1994

G77 SEEK REAL DIALOGUE FOR GLOBAL SOLUTIONS
New York, 11 Nov (TWN) -- The Group of 77 and China have again called for global solutions, based on real North-South dialogue, to the diverse, but interconnected issues of Sustainable Development and International Economic Cooperation

The G77 views were presented this week at the second committee by Amb. Ramtane Lamamra of Algeria during its consideration of the agenda item "Sustainable development and international economic cooperation".

This rubric, Lamamra said, covered a diversity of subjects, reflecting the interaction among questions of trade, raw materials, agriculture and the struggle against poverty and the different scourges suffered by the developing countries and particularly their social and political stability and, in some cases, the very existence of sovereign state entities.

It underscored the need for global solutions to all these problems through an approach based on real dialogue and in a spirit of partnership between the countries of the North and the South as envisaged in last year's UN General Assembly resolution 48/165.

Referring to trade issues, Lamamra hoped that the Marrakesh Uruguay Round agreements would open the way towards establishment of an international trade system which would be "truly free, fair, transparent and foreseeable".

Although a complete and systematic evaluation of the implications of the Uruguay Round agreements still remained to be done, initial assessments by UNCTAD and institutions such as the World Bank and the OECD showed that the benefits would, at least in the short term, go to the industrialized countries.

The positive results for the developing countries in terms of new trade opportunities were far from commensurate with the additional obligations that they have assumed both in fields traditionally under GATT jurisdiction and in sectors such as services, foreign investment and intellectual property rights that would now be governed by new multilateral disciplines.

The African countries on the whole would suffer losses estimated at $2.6 billion per year. This would also be true of the least developed countries that are exporters of raw materials and developing countries that are net importers of food stuffs.

These rather discouraging forecasts were compounded by the already expressed intention of developed countries to introduce clauses of a social or environmental nature, thus sowing the seeds of a new protectionism in different forms.

The developing countries have expressed in appropriate forums their legitimate concerns over these attempts to deprive them of the few trade advantages that they have, especially those based on their comparative advantages vis-a-vis their industrialized partners.

The support of the developing countries for the establishing a free and transparent multilateral trade system was absolutely clear. But to preserve the credibility of this new international trade system, it was necessary that this act of faith in multilateralism be followed by concrete measures to ensure broad distribution of the benefits of the system to the entire international community and in particular the developing countries.

This would need lifting current obstacles to the establishment of just and fair commercial flows, especially by correcting the mechanisms that promote an inequality of terms of trade, inadequate remuneration of raw materials, undue protectionism in markets and obstacles to the transfer of technology.

It also involves the granting, as agreed in the Marrakech declaration, of favourable and preferential treatment to the developing countries by applying measures that relate to the services sector, TRIPS and TRIMS. Only in this way could the short-term distortions resulting from the Uruguay Round agreements could be borne by the fragile economies of the developing countries, the G77 added.

It was also necessary to speedily implement the compensation measures that have been agreed upon for the most affected countries, especially the LDCs and particularly the African countries, countries that export raw materials, and net importers of foods stuffs as well as countries which would suffer from the crumbling of the system of preferences.

This would be an initial real test of the good will of the most important protagonists in international trade, Lamamra said.

It is also important to provide all the necessary assistance to the countries most exposed to the adverse effects of competition in order to help them to develop their human and institutional capacities and to diversify their production so that they can fully benefit from the provisions of the Uruguay Round agreements.

Stressing in this connection the very important role of UNCTAD -- in providing technical assistance to developing countries, in its policy analysis, as a forum for intergovernmental deliberations and for the formation of a consensus, the G77 spokesman said this required consistent support to UNCTAD to enable it to successfully fulfil the mission and support developing countries to be fully integrated in the world economy.

The institutional mechanisms to be established in the follow-up of the Uruguay Round, should ensure close cooperation, on the basis of operational complementarity, between UNCTAD and the future World Trade Organization.

The WTO must assume the role of impartial arbiter and set as its objective the establishment of an international trade system free of any discriminatory practices. In this spirit, the establishment of Dispute Settlement mechanisms in the WTO should make it possible rapidly to put an end to the unilateral practices that have thus far prevailed.

Referring to the commodities, on whose exports many developing countries were dependent for their foreign resources, Lamamra said that though there had been recently a firming of prices, thus reversing the long trend of sharp declines in real prices, this trend did not appear to be one of a lasting nature and seemed to a great extent due to inflow of speculative capital in international raw materials markets. Long-term projections in any event point to a low-price environment which is expected to last until the beginning of the next millennium.

These are clearly discouraging prospects for the efforts being made by the developing countries to meet the conditions of autonomous development. It was therefore important that the international community provide itself with a global strategy for commodities in which all parties involved would play a healthier role, be they producer countries, consumers or the different intermediaries, commercial banks, stock exchanges and commodities traders.

The markets were now characterized by an excess of supply over demand and global strategy for commodities should create the conditions for reabsorption of surpluses. In the developed countries, the main consumers, the policy would hinge on revitalizing demand, ensuring better access for the raw materials of the developing countries to their markets and the elimination of practices that disturb the normal functioning of rules of trade such as agricultural subsidies and customs protectionism.

As for the producer countries themselves, it would call for a stabilization of their levels of production to keep them in line with the capacity of the market to absorb it and thus avoid the risks of sudden plunges in prices. It would also involve the implementation of a policy of economic diversification, both horizontally and vertically.

In the longer term, the commodity question should be seen in a global framework for strengthening the capacities of the Third World countries to finance their own development.

This called for a rapid and lasting solution to the question of the external debt of the developing countries. This solution must be accompanied by a revitalization of financial flows, both public and private, towards the developing countries in order to reduce their need to resort to the option of increasing commodity exports to increase their foreign exchange resources.

Referring to the widespread hunger and recurrent cycles of famine and deaths of millions, Lamamra said such tragedies were inadmissible morally, politically and economically -- at a time when the progress of science and technology has made it possible to make many miracles and there was enough food available to feed decently the entire population of our world.

From this standpoint, the situation in Africa was the most tragic. The international community owed it to itself to refuse to accept this situation as inevitable and ensure the concept of food security for all as a basic principle of international action and as an objective to be attained as soon as possible by mobilization of all means, human, technical and financial.

This objective is not out of reach. The successes achieved in certain developing countries especially in Asia and in Latin America gave rise to great hopes, especially for the 45 countries in the world, 30 of which are in Africa and listed by the FAO as experiencing a weak or critical food situation. But it required strengthening international support for these countries to achieve food self-sufficiency.