Mar 27, 1990

UNCTAD BOARD CALLS FOR "BALANCED OUTCOME" IN URUGUAY ROUND.

GENEVA, MARCH 23 (BY CHAKRAVARTHI RAGHAVAN) -- The Trade and Development Board of UNCTAD has urged participants in the Uruguay Round "to strive for a balanced and successful outcome which would result in the liberalisation and expansion of world trade to the benefit of all countries, especially developing countries".

The Board also urged governments "to take measures to assist technologically-weak countries, especially developing countries, to fully participate in technology-led growth in international trade in terms of product innovation, export supply and market penetration capabilities".

The Board also affirmed "the need for pursuing policies in the areas of technology which further the goal of trade expansion for the benefit of all trading partners, particularly the developing countries, and which promote investment, innovation, absorption, utilisation and development of technological and entrepreneurial capabilities.

This omnibus resolution on trade issues adopted by consensus Friday night was the major outcome of the Board's two-week session.

The developments in Eastern Europe and the uncertainties let loose about the future political and economic relations of countries of this region - among themselves, with Western Europe and the rest of the Industrialised countries as well with the countries of the Third World, and the emerging competition of the countries of Eastern Europe with those of the South for aid and investment from the West - was a constant undercurrent of the session, devoted mainly to trade issues.

As G77 negotiators privately said it was clear that there was new excepting for election purposes, no longer any "Group D" and that some of its members, in informal consultations and negotiations took positions on Third World which were sometimes to the right of hard-liners in the Group B like U.S.

As one of the G77 member put it "we now have to listen to lectures on the merits of the market, not only from the Group B but the new-converts who advocate it more vehemently to impress the West".

The new equations and relations were best illustrated in the changes in the resolution on trade to enable its adoption by consensus, the introduction of the new category of "technologically-weak countries" (intended as an indirect reference to the East Europeans who need support and help).

In the sessional committee of the Board which considered the G77 draft and a compromise text proposed by the chairman of the Committee, Mr. Hecker of the FRG, the "Group D" had sought the addition of "technologically-weak", a change with which a large number of G77 were not happy about, since it appeared to increase the chances of diversion of aid and resources directed to the South going to the East. The U.S. had also been opposed to the resolution as such.

Another outcome of the changes taking place in East Europe, was the failure to agree on the future orientation of the activities of UNCTAD in relation to the so-called "inter-systems trade" or trade and economic relations among countries with different economic and social systems - the Industrialised market-economies, the socialist countries of East Europe and the Third World countries.

The Group of 77 had wanted UNCTAD to continue consideration of trade relations of countries of Eastern Europe with other member-states of UNCTAD and particularly Third World countries as part of the wider framework of trade and development issues. It had also wanted the secretariat to follow developments in the processes of economic policy reform and integration of the East European countries into the world economy in terms of its implications for their trade and economic relations and resource flows for the Third World.

But Poland, Hungary and Czechoslovakia flatly refused to agree to any such special focus on them and underlined that their political and economic systems were no different than that of others, that they were now "market-economies", and should no longer figure in the UNCTAD reports or classifications among the "centrally planned economies" and that they would no longer be able to participate in or contribute to the "inter-systems" trade discussions.

With the Board unable to reach any consensus, the G77 read into the record at the final plenary Friday night their ideas on detailed guidelines for future work, and the three East Europeans repeating their earlier positions.

The President of the Board, Oscar de Rojas of Venezuela read out an understanding that the UNCTAD Secretary-general would use his discretion in orienting and adjusting the work programme (in this area) as he considered appropriate and in the light of developments and taking account of the views expressed during the session.

On the question of venue, dates and agenda of UNCTAD-VIII, consultations are to continue, with the Board President dealing with the venue question and the UNCTAD Secretary-General the agenda consultations. Dadzie had reported that his consultations on the agenda had shown a common ground and the remaining differences did not appear to him to be fundamental and could be bridged through exercise of "imagination, goodwill and spirit of mutual accommodation"

The Conference is to be held in June, but with the actual dates to be finalised and confirmed at the next Board session.

On the venue, with the Group B countries (due to the U.S. veto) unable to join a consensus with the Group of 77, supported by China and Group D, on Cuba as the venue of the next session, the Latin American and Caribbean group of countries, in whose region the next Conference is to be held, with the consent of Cuba, are trying to find whether any other country in their region would be to host the conference.

The President of the Board, Amb. Oscar de Rojas of Venezuela had told newsmen Friday that it was hoped that the consultations would be able to find a solution as soon as possible, and before the October meeting.

Latin American countries, he said, had made it clear that the next conference should meet in their region "and if no alternative host could be found, we will have to come back to the Cuban candidature". Cuba, he added, had only offered to step back if any other Latin American country was willing to host UNCTAD-VIII.

In the discussions on the Uruguay Round in the sessional committee, Third World participants had expressed their concerns over the asymmetries and imbalances in the negotiating processes so far and their doubts whether the Round would fulfil their expectations and result in a balanced outcome. The Group B countries were more sanguine, pointing to the growth in world trade in recent years, and urged the Third World countries to cooperate in the Round. But it was agreed that a major effort would be needed in the final phase to ensure results beneficial to all.

The provisional agenda for the next session of the Board provides that during the consideration of the interdependence item on its agenda, delegations would be free to refer to the developments and issues in the Uruguay Round of particular interest to the Third World countries. An informal exchange is to be organised to which the GATT Director-General would be invited.

A number of G77 participants, who reluctantly went alone with this compromise at the level of their coordinators, were very unhappy nevertheless, noting in this connection the consistent efforts of the GATT secretariat to undercut and undermine the UNCTAD role (as in the FOGs negotiations for conversion of GATT into an ITO).

One G77 participant said that the UNCTAD dialogue and exchanges on Uruguay Round was among governments and not secretariats, but perhaps the presence of the GATT Director-General in the discussions could be used by G77 to present their viewpoints forcefully both on the state of play in the negotiations and GATT secretariat's roles.