May 4, 1988

EARLY DECISIONS ON UNCTAD TECHNICAL ASSISTANCE URGED

GENEVA MAY 2 (IFDA/CHAKRAVARTHI RAGHAVAN)— Third World countries underscored Monday the need for early UNDP decisions on UNCTAD projects for technical assistance to Third World countries in the on-going Uruguay Round negotiations, with some of them warning that delays could impact on the dynamics of the negotiating processes.

The views of the Group of 77, and some of its members, were presented at the sessional committee of the UNCTAD’s Trade and Development Board, which is considering a cluster of trade issues.

In other remarks, the Group of 77 also called upon the UNCTAD Secretariat to speed up its work on some of the service issues, particularly those mandated by. The final act of UNCTAD-VII, keeping in view the dynamics of the negotiating processes in the Uruguay Round and the projected mid-term review in December.

On the technical assistance issue, the director of the manufactures division of UNCTAD, B. L. Das explained that UNCTAD had submitted to the UNDP regional projects for Africa, Asia, and Latin America and Caribbean, on technical assistance to Uruguay round negotiations, as also on inter-regional project.

The last, Das explained, would be the 'care project' of UNCTAD’s technical assistance, and would also backstop the regional projects.

The statements of Das on the status of each of the projects suggested that while some preliminary and preparatory work had been undertaken and completed for the inter-regional project, and the projects for the Asian, and Latin American regions, UNDP was still to approve and provide sanction for the current phase of technical assistance to be geared to the ongoing Uruguay round negotiations.

In respect of all these three, UNCTAD had submitted project proposals, and in the light of comments from UNDP, UNCTAD had now revised its proposals and re-submitted them and was awaiting approval.

As regards the Africa regional project, a proposal was submitted after detailed discussions with the Organisation of African unity and the economic commission for Africa and the UNDP, and in the light of the UNDP comments a revised document had been resubmitted.

Das clarified that as soon as UNDP approval was given, UNCTAD would quickly move to provide the technical assistance needed to enable the active participation of Third World countries in the negotiations, which were more complex than previous MTNS.

Though the issue did not figure in any speeches or comments, some Third World delegates said that part of the delay in approval of the technical assistance projects, and UNCTAD providing such assistance, lay in behind-the-scenes discussions with UNDP.

The latter, these delegates said, was perhaps under pressure from same of its main donors like the U.S., to reduce the UNCTAD role in this area and/or make sure that the advice that UNCTAD would provide, and whether it would be on the lines of general policies being advocated by the World Bank, IMF etc, or would take on independent line and perspective on the issues in the round.

Speaking for the group of 77, India underscored the dynamics of the negotiating process, and need for early UNDP approval of the projects and the provision of assistance by UNCTAD.

The G77 was sure that in providing assistance, UNCTAD would keep in mind not only the specific interests of the Third World countries, but also the general question of development dimension and development goals.

"Developing countries", Indian delegate S.P. Shukla said, "would like to judge the utility and success of the Uruguay round negotiations in terms of the contributions that the negotiations would make to the process of their development".

China noted the paucity of proposals from Third World countries in the negotiating groups, and said this made the provision of technical assistance by UNCTAD all the more urgent.

Tunisia, speaking for the African group of countries, recalled that the issue of technical assistance to African countries had also figured in Punta del Este and was specially mentioned in the president's concluding remarks there.

Absence of technical assistance would create difficulties for participants from Africa, as would also be the case for other Third World countries.

It would also mean exclusion of the participants from many of the negotiations, and perhaps delay the negotiating processes themselves.

None of these would be desirable, the Tunisian delegate added.

Sri Lanka, which chairs in GATT the committee on trade and development (CTD), contradicted a Canadian statement in the plenary of the board last week, to the effect that the CTD had endorsed a Canadian proposal that the GATT secretariat should be focal point for technical assistance activities.

This Canadian proposal, the Sri Lanka delegate P. Nagaratnam said, was not endorsed by the CTD.

Nagaratnam noted that at an earlier meeting of the CTD, Canada had proposed that the GATT secretariat should 'coordinate' technical assistance of various multilateral agencies, but the secretariat itself had said it would be inappropriate for it to do so in view of the differing perspectives from which the different multilateral agencies approached such activities.

At the meeting of the CTD held on April 19, Canadian proposal for the GATT secretariat to act as a focal point and as 'a bank' for information, was acceptable to some delegations, but others did not agree, arguing that it was for the CTD to be a focal point.

No consensus could be reached on the Canadian idea, and the committee only agreed to invite secretariats of international organisations that provided technical assistance in relation to the work of the Uruguay round to keep the committee informed periodically of activities which they had carried out, as well as facilities available under their programme in order to promote greater transparency and complementarily.

On the services issue, Das said the current report had carried forward earlier UNCTAD views on the role of services in the development process, and "the concept of the strategic role of the producer service sector".

Recent in depth studies in the industrialised countries, Das noted confirmed earlier UNCTAD findings in this area.

These studies had concluded that international competitiveness in goods and services depended an ' technological competitiveness' of a country, namely its capacity to adopt, appropriate, accumulate and use knowledge and know-how associated with new technologies, "rather than resource allocation or relative abundance of factors of production".

In industrialised countries, Das said, advances in information and communications technologies had created 'new services' or a product of information technology themselves as well as servicing to enhance existing services that supported the service functions of an enterprise, and enabled it to optimise its viability, reinforce its economic value and contribute to its innovative capacity.

Enterprises that had been able to link service inputs into a 'network' or 'system' of production had demonstrated success in the world markets, as they were able to maintain the continuous process of innovation and adaptation, which the exigencies of the world market presently required.

This was where the strategic role of service emerged. Services had now became directly integrated into the production process, whether of manufactures, agricultural products or other services, in order to contribute to the increase of productivity, value added and international competitiveness of those sectors.

In the Third World countries the absence of adequate educational, legal, financial and communications services deprived otherwise active and productive people from participating constructively in the economy.

Impediments to productivity in these countries could also arise from uneven geographical coverage of the service infrastructure. Lack of intermediate services, for example, could frustrate rural producers of ability to improve their productivity and deprive them of value added for production.

Development of producer services was also essential for industrial restructuring, and to help Third World countries increase productivity, quality and value added and in international competitiveness.

Das noted that two issues in the services area mandated by the final act of UNCTAD-VII - for the secretariat to analyse the implications of the services issues raised in the context of trade in services, and exploring appropriate problematic for trade in services - had not been covered in the report, since work an this inside the secretariat was just beginning.

Underscoring the importance of these two issues, India, speaking for the group of 77, said the context of the work mandated was clear: the development orientation and the dynamics of the negotiations in the Uruguay round.

If the technical work and technical assistance on services by UNCTAD did not keep pace with the negotiations in the Uruguay round group of negotiations on services, sheer efflux of time would make the UNCTAD mandate inoperative.

It was particularly essential to speed up the work on analysis of issues in the trade in services and evolving "appropriate problematic" for trade in services, the G77 spokesman declared.

Already there were demands for a general framework on trade in services, and if possible by December 1988.

"We are already in may 1988, and we would very much like the UNCTAD secretariat to bring out its useful analysis and approaches within the four corners of the mandate given by UNCTAD-VII" the G77 spokesman added.

In other remarks, China opposed efforts to link the negotiations in goods and services, and the urgency of UNCTAD’s technical assistance and analytical work.

Hungary, speaking for the socialist countries, argued that the work of UNCTAD and GATT should be complementary and not competitive.

The Hungarian delegate did not explain, and his views trying to restrict the role of the UNCTAD secretariat in this area surprisingly seemed to be nearer to that of the U.S. and other industrialised countries.

Poland suggested that UNCTAD should cooperate closely with the work of the UNCTC and the UN statistical office, and the GATT secretariat, in the support for the Uruguay round negotiations on services.

In Poland’s view more research work was needed to understand the implication of liberalisation" of trade in services, and its effect on the competitiveness of all trading partners. UNCTAD should concentrate on this work.