Jul 18, 1987


GENEVA, JULY 17 (IFDA/CHAKRAVARTHI RAGHAVAN) – As the plenary of UNCTAD-VII remained suspended, having ended the first part of the general debate, focus has turned to the four committees where the substantive issues before the Conference are under discussion.

In all the four Committees – on Resources, Commodities, Trade, and Leas Developed Countries (LDCS) – the G77 spokesmen have introduced the proposals of the group framed at their Havana meeting, and have also presented a plan of work.

This plan of work includes discussions on each of the sub-items or issues identified by the G77 in their Havana documents.

After formal opening statements, the Committees have gone into informal plenarys, where the proposals of the G77 are being discussed and views exchanged.

There has not been a formal decision to take the G77 proposals as a basis. But in practice, in each Committee, the discussions are on the headings in the G77 proposals, and discussions are on that basis, with other groups offering their views and comments.

This has side-stepped the controversies over assessment vs. Discussions and negotiations policies and measures.

Only in the Committee on Trade, there had been some difficulties over even the organisation of work and the agenda for discussions, and this was resolved only Thursday afternoon.

G77 sources said that overall the discussions and exchanges in committees, while dealing with the substance of the issues, was still at a very general level, and the real "negotiations" and problems would start only when there is an effort to draw up some pieces of paper.

Generally, the G77 sources said, the Group B countries appear to be forthcoming in discussions when no operational decisions or actions are involved, but holding back where UNCTAD by its very mandate has some operational roles.

The U.S. itself appeared to be staying in the background in the Committees at this stage of work, but some Group B sources said in the group meetings themselves it was quite active in taking a negative stance.

The Committee on Resources, there has been an initial exchange of views on the debt issue, and on policies and measures to substantially increase resource flows for development.

At a very general level there has been a broad convergence, with the Group B spokesman in effect avoiding the U.S. extreme position that such matters can’t be discussed in UNCTAD.

The Group B countries agreed on need for growth and development, but add that growth must be accompanied by drastic adjustments.

Third world delegates however argued that the talk of adjustment was mainly to tell the third world debtors to cut domestic consumption and control demand in order to accumulate surpluses to pay debt.

The issues of debt servicing capacities also came up, but while seemingly conceding these have to be taken into account, the Group B countries continued to talk of the case-by-case approach.

In the Committee on Commodities, the exchanges have again been on a very general level, with the Group B countries emphasising more on "market forces", an ensuring transparency as a solution.

The G77 have underlined their proposals for strengthening existing ICAS with economic clauses, and negotiating new ones. They have also pointed out that even the Havana charter had provisions for market interventions in commodity markets.

The talk of "transparency" as a solution to commodity market problems, the G77 noted, was meaningless without measures to secure transparency in the very organisation and functioning of commodity markets and exchanges, and the operations of the TNCS who in some commodities have an oligopolistic and olipsonic presence.

In the Trade Committee, the discussions had begun and centered on protectionism and structural adjustment, market access and policies affecting trade.

The EEC spokesman, Jonathan Scheel made out that there really was no distinction between protectionism in the industrial world and the protection in the third world, and both would have to be resisted and dismantled, and the responsibility and contribution for maintaining a free trade system must come from all.

He questioned the G77 view about the distinction in the GATT itself between the two – as in the special provisions relating to the development needs of the third world, and the provisions for balance-of-payments restrictions – by suggesting these provisions, 40 years after the general agreement was signed, were really outmoded and needed changes.

The G77 spokesman, India’s Srirang P. Shukla, agreed with the EEC delegate that not only these, but even most of the other provisions and thrust of the GATT had become irrelevant to the current world.

Hence the G77 proposal that UNCTAD should start work on the blueprint for a universal, non-discriminatory, comprehensive, stable and predictable trading system which would respect the fundamental principles of international legal order. He hoped the EEC would support it.

On the issues of protection and structural adjustment, where the G77 have suggested setting up by each country of transparent and independent national mechanisms to examine from overall point of view need for protectionist action, the Swedish delegate, Amb. Lars Anell, argued that industrialised countries were already undertaking structural adjustment measures.

They were aware of the costs of resisting such adjustment through protection, and measures were continuously being taken, as in agriculture now, but it was not for the G77 to tell the industrial world what it should do, Anell said.

Shukla noted that the costs of resistance in industrial world to structural adjustment were not only paid by the consumers and taxpayers in those countries, but by the third world countries on whom the burden was shifted, through MFA or other forms of import restrictions on their products in the industrial world.

But Shukla entirely agreed with Anell that each country must have the sovereignty to decide on its policies, including structural adjustment.

This was precisely what the G77 meant when they refused to allow the industrialised countries, or international organisations, to tell them what sort of domestic development policies the third world countries should follow.

But the G77 proposals for transparent mechanisms to judge calls for protection and promote structural adjustment, were intended to be "purely national mechanisms", for each country to set up and decide. The U.S. had such mechanisms, which were entirely transparent, and others should follow this example.

In the Committee on LDCS the discussion was kicked off by the Norwegian Minister for development cooperation, Ms. Vesla Vetlesen, who underscored the need for new initiatives to create conditions for sustainable growth in LDCS – and spoke of need to attain the 0.15 percent ODA targets for the LDCS, and the reduction of the debt burdens of these countries.

Other group B statements have also been speaking of this, but with several of them emphasising the prime responsibility of the LDCS themselves, and their need to focus on human resources development, with international assistance playing only a complementary role.