7:49 AM Sep 11, 1995

UNCTAD SHOULD REMAIN A COUNTER-BALANCE TO BWIS

Geneva 11 Sep (Chakravarthi Raghavan) -- The UN Conference on Trade and Development should remain a counter-balancing force to ensure bold and innovative plurality of thinking when such thinking is in danger of being increasingly dominated by the Bretton Woods Institutions, the Group of 77 declared Monday at the Trade and Development Board.

Speaking at the Fortysecond session on behalf of the Group of 77 and China, the Colombian ambassador, Guillermo Alberto Gonzalez, said that any attempt to reduce this role of UNCTAD should be resisted.

UNCTAD as an institution should be empowered to exercise its development mandate fully, particularly in the light of the globalization of the international economy and the deepening economic interdependence among states and their implications for the future of developing countries.

The Group of 77 and China, he said, remained committed to UNCTAD as an institution that had attained grater relevance as a result of the creation of the WTO which has reinforced the need for a policy-oriented trade forum with strong development perspective.

Earlier in general comments on the Trade and Development Report, Gonzalez referred to the signs of improvement in the economic situation of some developing countries and the major problems faced by many others -- due to fall in commodity prices and earnings, after a short up-turn, declining ODA flows, increasing poverty and the outcome of the Uruguay Round including the loss of special and differential treatment enjoyed by developing countries in international trade.

The impact of all these on developing countries demanded more immediate attention and thoughtful analysis, the G77 chair said.

As the TDR had pointed unemployment had become a veritable scourge in the developed countries and the way these countries dealt with this problem would influence the course of all economies, developed or developing.

Agreeing with the TDR analysis of the causes of the rising unemployment and fall in real wages of the labour force in the North, and the calls for import restrictions to meet this problem, the G77 said that such neo-mercantlist approaches ran counter to the letter and spirit of the Uruguay Round and would prevent globalization and liberalization from yielding their benefits. They were a threat to the developing countries since their outward-oriented development strategies could only succeed if the markets of developing countries were sufficiently open to accommodate the increasing imports of manufactures from the developing countries.

Imposing new trade barriers, including linking higher labour standards to trade, would be counter-productive and, instead of solving the twin problems of unemployment and badly paid unskilled jobs in the North, it would cause rise in import prices and fall in real wages of unskilled workers, as also higher unemployment in the developing world.

The rationale for improving labour standards in the developing world lay in protecting workers in these countries, not in saving jobs in the developed countries. What was needed was a coordinated policy effort to boost demand and raise investment in the developed countries -- with developing countries contributing via increasing purchasing power, rising earnings from exports of manufactures, better prices for primary commodities and sufficient access to external finance.

The G77 agreed with the TDR view that it would be unrealistic to expect the international trading system to evolve in the right direction, notwithstanding the Uruguay Round, unless the twin problems of unemployment and low wages in the OECD countries were tackled by increasing the prosperity of all.

It was to be hoped that the international cooperation needed for this would be forthcoming despite the end of the Cold War and that the international behaviour would not revert to the patterns of competition and conflict characteristic of the 1930s.

The Uruguay Round accords should lead to an open and rule-based trading system and the industrialized countries had a greater responsibility in this respect by resisting pressures to erect new barriers to limit market access to the developing world. Equally important was the monitoring to see that these agreements were implemented in letter as well as in spirit.

Spain's Amb. Fernando Valenzuela, for the EU member-States, in general remarks confined himself to the preparations for UNCTAD-IX and the mid-term review of the Programme of Action for the LDCs.

The EU, the Spanish ambassador said, believed that UNCTAD must consider need to establish an institutional structure that would be flexible and efficient and, while preserving ideas already formulated in Cartagena, would enhance efforts to promote development "through trade, collaboration and association between Member States of the Conference and good national and international management."

They should also take into account the special needs of those, particularly of the LDCs, who had further to go along the road to development and not lose sight of the need to respect human rights and principles of democracy and good governance.

Referring to the forthcoming global review of the programme of Action for LDCs, the EU spokesman said, the situation of the LDCs was perhaps the issue of most concern to UNCTAD and its members. The EU looked forward to a constructive debate in New York (where the high-level meeting for the review is slated to take place) and the EU would cooperate with its partners to arrive at a positive outcome to help the LDCs in their efforts to achieve development.