7:01 AM Apr 3, 1995

TRADE BOARD SETS UNCTAD-IX AGENDA

Geneva 31 Mar (Chakravarthi Raghavan) -- The Trade and Development Board ended a two-week session Friday after approving a four-point agenda for the Ninth Session of the UN Conference on Trade and Development due to meet next year, at a venue and dates to be set.

The agenda approved by the Board also provided some annotations for each of the topics.

Under the theme of "promoting growth and sustainable development in a globalizing and liberalizing world economy" -- with the objective of maximizing the development impact of these trends while minimizing the risks of marginalization and instability -- UNCTAD-IX will have four topics:

* Development policies and strategies in an increasingly interdependent world economy in the 1990s and beyond,

* Promoting international trade as an instrument for development in the post-Uruguay Round world,

* Promoting enterprise development and competitiveness in developing countries and countries in transition, and

* Future work of UNCTAD in accordance with its mandate; institutional implications.

In annotations, the Board agreed that under the first item, UNCTAD would make an assessment of the fundamental trends in the international economic system, notably growing and deepening interdependence among countries and sectors of economy in the light of their consequences for the development process. It will also examine opportunities for growth and development offered by the globalization and liberalization processes in areas of trade, technology, money and finance, investment, services, commodities and environment as well as risks and potentially negative consequences.

In terms of policies and strategies for the future, it will consider relevant national and international policies and strategies needed to enable developing countries to take full advantage of the opportunities for growth and development, while minimizing risks of new imbalances and instability including in international financial markets and potential marginalization of other weaker economies, taking into consideration in this context the relevant problems of interested economies in transition.

The Conference is to pay also attention, inter alia, to issues related to problems of unemployment, poverty alleviation and sustainable development, the role of government as well as public and private sectors in the development process, resource flows and external debt, and address issues of South-South economic cooperation and role and potential of regional economic groupings in the globalizing and liberalizing world economy.

Under the second item relating to international trade, UNCTAD IX is to focus on concrete policies, measures and actions - both at national and international levels - to promote integration of developing countries, and facilitate integration of interested economies in transition, into the international trading system. Among others it will also address the impact of the Uruguay Round agreements on development, measures to assist developing countries to benefit from the trading opportunities and making proposals to translate into concrete action the commitments made at Marrakesh regarding the LDCs and net food-importing countries, promoting complementarity between UNCTAD and WTO to address trade-related development concerns.

Under the third item, among others measures to promote small and medium enterprises, as well encouragement of domestic and foreign investment, developing technological capabilities and transfer of technology, privatization and public sector reform, and the inter-relationships between competition and enterprises development.

On the future work of UNCTAD, the Conference is to assess the work completed since UNCTAD-VIII and the institutional reforms adopted then. It will consider the future role of UNCTAD and its relationship with other international institutions to generate synergies among them. On the basis of the UNCTAD mandate and to strengthen the UN system, UNCTAD is to be enabled to become a more effective instrument for promoting development and full integration into the international trading system of developing countries, in particular the LDCs, while taking into consideration the need for full integration of interested transition economies. Also to be considered is UNCTAD's contribution within its mandate and competence the followup to major UN Conference, including the World Summit for Social Development.

The Board's adoption of the agenda and theme of UNCTAD-IX follows several weeks of intense consultations under the chairmanship of the Officer-in-charge of UNCTAD, Carlos Fortin (who put forward informal working drafts) and negotiations among countries and groups.

After the adoption, the President of the Board, Amb. Richard A. Pierce of Jamaica, praised the "continued spirit of political goodwill, flexibility and profound sense of partnership displayed by all delegations" which had led to the successful outcome of intensive consultations on the agenda.

Coming in the wake of the establishment of the World Trade Organization (WTO), and the report of the "Governance Commission" (which among others called for the abolition of UNCTAD, UNIDO), and the strong reactions against it from the Group of 77 who insisted on the continued relevance of UNCTAD and its mandates as well as others, the agenda discussions and private consultations ranged in effect over the nature of UNCTAD and its "complimentary role" visavis the WTO, as well as the new debates on the "liberalisation models" in the wake of the Mexican crisis and the Social Summit recommendations.

In the plenary remarks, the two extremes of this debate were perhaps set out by Iran and the European Union. The EU's executive commission, in some of the private consultations, suggested at one stage, that UNCTAD future work focus on trade efficiency ala the Ohio Symposium of 1994 and such other technical assistance programmes and national and domestic policies of developing countries, and not international policies and cooperation issues.

Some of the Third World delegations involved in the consultations that led to the final compromise expressed satisfaction with the outcome, stressing that the agenda reflected their concerns, and the need to address international policy issues.

Some of them privately agreed (a view also shared within the secretariat by some of the staff) that in addressing the future role of UNCTAD and its "complimentary role", the real issue would be whether UNCTAD is merely to play a supportive role to trade and development policies decided elsewhere -- whether at the WTO or the IMF/World Bank -- and promoting such policies in developing country or whether it should address the "gaps".

Thus, with the Fund-Bank and WTO promoting the "disarmament" of government roles in the economy to strengthen private, and particularly transnational modes of production roles, should UNCTAD be addressing how developing country domestic policies should change for this purpose, or look at the national and international countervailing measures needed and, where needed, challenge the current orthodoxies.

An appreciation of this role of UNCTAD has come in the just published UN's Economic Survey for Europe where the ECE economists (in drawing some lessons of the Mexican experience for East Europe), in a footnote have referred to the view (by H. Kaufman in the Wall Street Journal of 27-28 January) that the illusion of success in Mexico was hardly questioned by foreign governments, international financial institution or by private banks and security firms.

The authors of the survey add: "But it should be acknowledged, on grounds of intellectual honesty and professional etiquette, no less, that UNCTAD's economists gave clear and repeated warnings, in the body of their texts and not hidden in precautionary footnotes, of the dangers Latin American countries were running in relying so heavily on short-run capital movements to finance their current account deficit".

The theme and the topics and their annotations agreed at the Board, some of the Third World negotiators said, enabled addressing these questions, though much would depend on how seriously developing country governments function in relation to UNCTAD, including its meetings and issues.

As Noway put it at the Board, "It did not help very much to preach to the converted about the merits of UNCTAD. To succeed one must convince the sceptics, those responsible for economic reforms, and the Ministries of Finance that UNCTAD continued to have a useful role to play in the management of the world economic issues. In focusing on globalization and liberalization as the two basic themes for UNCTAD IX, member States have established the right framework for the preparatory process ahead."

Earlier in the Board, Iran referred to the 1964 UNCTAD mandate (about promoting trade among countries at different levels of development and for developing a comprehensive trade organization), and said a valid question now was whether the operationalization of the WTO satisfied those aspirations and about UNCTAD's function and role and usefulness in the WTO area. Both questions should be addressed and answered by UNCTAD itself, rather than UNCTAD reacting to expressed positions of others.

In Iran's view, the WTO's limited objectives of enhancement of trade, without specific orientations towards development and developing countries, as well as its lack of universal membership and its "tiresome and elaborate membership qualification". While it was not "desirable, feasible or realistic" to pursue the establishment of another parallel organization for trade, the basic objectives of UNCTAD should not be abandoned.

The Governance Commission's report, Iran noted, had "alarmed and enraged" the international community and had produced "swift and strong reactions of outrage" that UNCTAD was still alive and its continued existence was essential and unquestionable. Although there had been "some backtracking on the position of the Commission, the duet was far from having been settled" and this question might overshadow the UNCTAD-IX preparations. The Board, Iran suggested, should not fear, but welcome a thorough and open-ended analysis of this question since a critical self-examination was necessary and urgent to counter extremist or eliminationist arguments.

France, for the EU, said UNCTAD-IX could be set in the context of the UN's Agenda for Development under discussion at the General Assembly and the general reflection on the future of the multilateral system. UNCTAd should take a look at its future role and indicate clearly how it intended to carry out its development task in the areas of its competence and in particular how it would aim to inject the development dimension into world trade issues. It should focus its action and resources on areas of major priority for the developing countries - areas where it enjoyed an undisputed advantage.

The United States noted that in building an agenda, member-States had been quite liberal and accommodating in accepting one another's suggestions and lists of topics, but in the months ahead both the members and the secretariat would have to discipline themselves and concentrate on a few issues needing in-depth investigation. These should be relevant to the linkages between trade and development, within UNCTAD's "core mandate" and acknowledged areas of excellence. The US was inclined to the view that UNCTAD mandate, global reach, and secretariat strong points would argue for focus on practical problems of trade-development nexus of concern to national governments and national policies, but which are of global scope. The US was less interested in devoting the UNCTAD conference time to regional issues or "theoretical analyses of global consequence, but which did not illuminate the actions, options or dilemmas of governments".

After the Board adopted the agenda, and all regional groups had expressed satisfaction at the final plenary, Pakistan made a statement to the effect that it joined the consensus in a spirit of compromise and on the understanding that the "concept of discussing national and international issues would not in any way be construed as being an exercise to review national policies and absolution of developed countries of their international obligations towards developing countries". Also, there should be a clear understanding that "new and emerging issues" could only be discussed after achieving a consensus on whether such issues were relevant for discussion in UNCTAD. Finally, UNCTAD should be further strengthened and delegations should resist the temptation to reduce the role of the institution.