UNCTAD ASKED TO CONTINUE MONITORING OF UR ACCORDS

7:51 AM Feb 12, 1996

UNCTAD ASKED TO CONTINUE MONITORING OF UR ACCORDS
Geneva 9 Feb (Chakravarthi Raghavan) -- The UN Conference on Trade and Development, in terms of its future work programme, should continue to analyze the impact of implementation of the Uruguay Round Agreements and follow closely the developments in the multilateral trading system so as to provide policy-oriented recommendations from a development perspective, an Ad Hoc Working Group on Trading Opportunities has recommended.

The Working Group, chaired by Amb. Seung Ho of South Korea, which has been looking into the trading opportunities for developing countries and the economies in transition in the New International Trading Context, adopted its report and recommendations for national and international actions. These will go before the UNCTAD Trade and Development Board meeting later this month, and then to the Committee of the Whole which is preparing for the UNCTAD-IX.

The working group meeting, where government representatives from some 70 countries participated, proved contentious -- with the United States at the last moment, disassociating itself from the recommendations and reserving its position on the document.

Earlier, in the informal negotiating process, the European Union too took a hard line in trying to block any UNCTAD assessment and analysis that may bring out clearly some of the negative effects of the Uruguay Round accords - repeating its position that UNCTAD's role is only to identify the positive benefits and the trading opportunities that developing countries could exploit.

In the language of the final document, which speaks of "the export interests of developing countries should receive special consideration in the future," in terms of future assessments and possible revisions of many of the multilateral trade agreements (as provided in the texts and built-in future work programme) the EU ensured that specific references in this regard to agriculture and services were eliminated.

In terms of areas for future work, the document noted that the implications of globalization for the international trading system will be part of the debate at UNCTAD-IX and that a deeper analysis of the implications of globalization and liberalization could consider "the extent to which the concepts currently governing trade among nations were still valid tools to deal with today's realities."

It was noted in this regard that the UN General Assembly has mandated UNCTAD to transmit its assessment on challenges and opportunities arising from the Uruguay Round agreements from a development perspective to the first Ministerial Conference of the WTO.

The EU has been using this formulation about "today's realities" (sometimes using it with the adjectives 'political' and/or 'economic') both in the WTO and elsewhere to justify and explain away its web of trade and economic relationships with countries outside the EU, and often in disregard of the spirit if not the letter of the WTO trading rules and its fundamental concepts of 'non-discrimination' and 'most-favoured-nation' treatment.

At the last Trade Policy Review of the EU at the WTO, the Commission representative used this argument to justify the various departures from the WTO rules in the EU agreements with non-EU countries.

The EU, and its executive Commission, is now using these formulations to push its concept of formulating 'investment rights' in the World Trade Organization, and further the interests of its transnational corporations to operate without any restraint in the developing world.

The phraseology is also used in various fora to justify linking trade with social clause or restricting market access for outsiders on grounds of labour standards, environment standards and the like, and preferential rights to selected countries on political and other non-trade and non-economic considerations.

[A top Commission official, Mr. Krenzler, was in Geneva last week, to canvass support from developing countries for the new trade issues, and also the social clause discussion, projecting the EU aim as providing a 'carrot' approach of preferential market access for those observing the EU-laid standards on workers rights and environment. It was hard put to answer though the argument that such an approach would discriminate against others and punish countries that do not choose to accept the EU standards,]

The recommendations of the Ad Hoc group said that to enable all countries, particularly the developing countries to derive all benefits from improved trading opportunities, all countries should implement fully their Uruguay Round commitments in letter and spirit. All market access and related commitments with respect to products and services of export interest to developing countries and the transition economies should be implemented as soon as possible, in particular in agriculture and textiles and clothing.

It also called for developing countries and transition economies seeking accession to be given every opportunity to achieve accession on "balanced terms", consistent with their trade, financial and development needs" and that the "demands" on these countries should not go beyond the provisions of the WTO agreements and not include considerations not covered by these Agreements.

The Ad Hoc Group also called for implementation as soon as possible of the Marrakesh Declaration and decisions favouring LDCs and net food importing countries.

In view of difficulties of developing countries, and particularly LDCs, to adjust their economies to shifts in market opportunities and increased competition, adequate international assistance should be provided for export capacity building, enhancing competitiveness, product and market diversification and relief of short-term difficulties in financing imports of basic foodstuffs.

The Ad Hoc Group stressed the urgent need to continue trade liberalization including liberalization through a substantial reduction of tariff and other barriers, in particular non-tariff barriers, and elimination of discriminatory and protectionist practices in international trade relations.

Assistance was required to improve the understanding by developing countries and economies in transition of the domestic legislation of the importing countries in implementing agreements on Safeguards, Anti-dumping, Subsidies and Countervailing Measures. Ways and means should be explored for reducing costs of procedures. In application of these measures, developed countries should give special regard to the special situation of developing countries and possibilities of 'constructive remedies' should be explored before applying anti-dumping measures that affect the essential interests of developing country members.

UNCTAD, the Ad Hoc Group's recommendations said, should continue to analyze impact of implementation of the Uruguay Round agreements and follow closely the developments in the multilateral trading system in order to provide policy-oriented recommendations from a development perspective, including identification and assessment of new trading opportunities arising from implementation of relevant agreements affecting trade in goods and services.

In this regard, UNCTAD was asked to:

* to analyze trading opportunities presented by tariff reductions, elimination of export subsidies and non-tariff measures, and operation of mechanisms in agreements on Agriculture and Textiles and Clothing,

* to analyze implications of new multilateral rules and disciplines of the Uruguay Round Agreements for scope of government policy action in developing countries,

* taking account of provisions on special and differential treatment to developing countries in various agreements, identify effective national and international measures, incentives and policies to foster export-oriented growth and industrial development, consistent with multilateral rules,

* identify how developing countries could best use the various transitional periods available to them to adjust their policies and strategies, and how they could assisted, to comply with their multilateral obligations,

* identify elements of future multilateral initiatives aimed at increasing trading opportunities of developing countries,

* conduct further studies to analyze economic impact of Uruguay Round agreements relating to anti-dumping, countervailing and safeguard measures,

* analyze issues relating to achieving full integration of economies in transition as well as other countries into the world economy, in particular through improved market access for their exports, elimination of any discriminatory tariff and non-tariff measures and further liberalization of their trade regimes, including visavis the developing countries, and the importance of open regional economic integration of interested economies in transition among themselves and with developing and/or developing economies to create new possibilities for expanding trade and investment.

The Ad Hoc Group recommended that on the basis of the work done so far in the group, UNCTAD should concentrate on the examination of the real challenges facing developing countries on trading opportunities:

* first, to identify the trading opportunities achieved in the Round to ensure maximum benefit to developing countries,

* second, to identify where future multilateral action was necessary to improve such opportunities, including in the context of the built-in agenda of the multilateral trade agreements, and

* third, to foresee challenges of key issues of trade and development, including an early warning perspective, in a rapidly changing world.

The basic focus of UNCTAD's technical cooperation activities, the Group recommended, should be to assist developing countries and transition economies concerned to meet the challenges on trading opportunities and identify main issues and policies concerning their integration into the international trading system on terms that would increase their economic benefits and equip them with better capacities to compete in international trade, while safeguarding their vital domestic developmental priorities and concerns.

UNCTAD technical cooperation should help them to improve their policy-making and institutional capacity building, and strengthening their export supply capabilities and supporting their full integration into the international trading system.