G77 SEEK HIGH-LEVEL REVIEW OF FINAL ACT IMPLEMENTATION.

Sep 20, 1988

G77 SEEK HIGH-LEVEL REVIEW OF FINAL ACT IMPLEMENTATION.

GENEVA, SEPTEMBER 28 (IFDA/CHAKRAVARTHI RAGHAVAN)—The group of seventy-seven has suggested a high-level midterm review of the follow-up and implementation of the final act of UNCTAD-VII.

Such a review, the spokesman of the group, Amb. Nabil Elaraby of Egypt said Wednesday, should take place at the March session of the trade and development board in 1989.

"A substantive and successful treatment of this item by a high-level board session would be a very suitable contribution to the commemoration of the 25th anniversary of UNCTAD", Elaraby added.

Earlier, the UNCTAD secretary-general Kenneth Dadzie said that while there might divergence of views and perceptions on the follow-up and implementation, it was important "to maintain the momentum of the implementation of the final act by all parties to whom it is addressed".

In their interventions, while the G77, socialist countries and china favoured procedures for regular reviews at the board of the implementation of policies and measures in the final act, the OECD countries expressed themselves against the subject figuring as a standing item on the agenda of the board.

In effect the OECD countries wanted any review to be confined to issues where the UNCTAD board or the secretariat have been specifically given a mandate, and even that follow-up and implementation to be done at the board in its review of activities of its subordinate organs.

Any specific issue or item to be discussed and addressed at the board, the group B said, should be by agreement at the time of deciding the provisional agenda fur a board meeting or in monthly consultations.

This process would enable the group b both to block discussion and/or limit the type of documentation the secretariat would provide.

In what he called "personal comments" on follow-up in various areas, Dadzie noted that there had been a significant number of initiatives by donors, official creditors and multilateral financial institutions to meet the resource needs of various groups of countries including sub-Saharan Africans, the least developed and the so-called "debt-distressed" among them.

But, there was a need to ensure adequate follow-up of these initiatives, and keep under review both the adequacy and conditionally, as well as social impact of these initiatives.

However, the problems and concerns of the highly indebted and middle-income countries had not so far been included among groups of countries requiring special attention.

In the area of commodities, Dadzie felt that there was no adequate basis yet for an assessment of the implementation of the recommendations in the final act.

Since UNCTAD-VII, the conditions for entry into force of the common fund had been met, and there was now a need to advance actions for entry into force and making the fund operational.

A number of trade issues, Dadzie said, were inextricably tied up with the progress of the Uruguay round, where the situation was currently fluid and the Montreal midterm review might clarify the situation.

However, there were some "disturbing trends", not merely in the proliferation of protectionist measures but also the erosion of the benefits of the schemes under the generalised system of preferences (GSP).

There was a need to maintain the momentum of work in UNCTAD on the trade issues, including in the areas of inter-systems trade (east/west, east/south) and international economic cooperation.

As regards LDCS, there was a need to intensify action to deal with the resource and debt problems of LDCS. Some of these problems could not wait for the review in 1990.

Elaraby in his intervention said the measure of the commitment of member-states lay not in the words of the final act but in the degree of implementation and action by all parties to whom the final act had been addressed.

The final act was an integrated document, flowing out of a unified agenda of the conference, and the policies and measures outlined there were "interdependent and mutually supportive".

Hence, it was necessary for the board, from time to time, to take stock of the follow-up and implementation of the final act as a whole.

While each member-state had the primary responsibility for its socio-economic and political development, the different burdens of responsibility had to be borne in mind.

.'"Clearly, the major market economy countries, who are singled out for special mention in the final act, bear the greatest share of responsibility".

In the G77 view, while there had been "a measure of forward movement" in the area of resources for development, particularly for sub-Saharan African countries, actions so far had fallen far short of addressing the global debt problems of third world or the overall need for external resources for development.

"In the spirit of the final act, action must be taken to resolve debt problem in all its dimensions, involving all categories of debtors and creditors".

The objectives of the debt strategy, agreed upon in the final act, had not been met, and the ad hoc and piecemeal measures taken so far had failed to address the underlying causes of the debt problem. There had also been a "lack of appropriate response by the international financial institutions".

In the area of commodities, Elaraby said, the policy measures agreed upon to strengthen the role of the commodity sector were yet to be implemented.

The prices expressed in real terms or in SDRS still presented "an alarming situation, particularly when put in d longer time-frame".

In the area of trade, and more than a year after the final act and two years after launching the Uruguay round, the trading environment had "in fact deteriorated".

"The gap between commitments and implementation is too wide to be bridged by repeated proclamations of principles and intentions, nor can it be glossed over by optimistic and self-congratulatory assessments of the progress of negotiations in the Uruguay round", the G77 spokesman declared.

While the Punta del Este declaration represented "a balanced package" reflecting interests of all participants, progress in negotiations so far did not reflect "a balance across the wide front" of the negotiations. There was "a clear lack of progress" in many areas of interest to the third world.

Also, contrary to their commitments in the final act, same industrialised countries "are still seeking linkages between commitments on trade in goods and other matters such as developing countries’ policies in regard to foreign direct investment, protection of intellectual property, services and fair labour standards".

The G77 spokesman also complained of the erosion or withdrawal of GSP benefits on grounds unrelated to trade, and failure to live up to the commitments on differential and more favourable treatment in the negotiations to third world countries.

The G77 would judge the "utility and success" of the Uruguay round in terms of the contributions that negotiations would make to the process of development.

From this overall view, "the functioning of the trading system and the successive rounds of negotiations for liberalisation of trade in the past have not resulted in accelerating the process of development".

As regards LDCS, while several of them were beneficiaries of actions taken in the area of debt and external resources, these actions had not extended to LDCS as a whole, Elaraby said.

Underscoring the need for overall board review of implementation, Elaraby said this was best achieved by retaining the subject as a separate item on the board's agenda.

Specific focus of discussion at each board meeting could vary, and the need for selectivity, could be met in normal procedures for drawing up the agenda.

Also, in the board sessions held in september-october, the agenda should include all trade-related topics.

Canada speaking for the OECD group of countries, however did not consider it necessary to keep the subject as a standing item on the board agenda. However, the group would be prepared to consider from time to time suggestions of other groups for review of specific subjects or aspects of the final act.

As for issues within UNCTAD’s mandate, the OECD group considered that they be best dealt with in the activities of the subordinate bodies, and for the board to consider them while reviewing or taking any follow-up action an the activities of the subordinary bodies.

The representative of the GDR, speaking for the socialist countries, shared Dadzie's assessment about "a mixed picture" in implementation of the final act.

A satisfactory and long-lasting solution to the debt problem could only be achieved through international policy measures, based on co-responsibility of creditor and debtor governments and cooperative involvement of international financial institutions.

The socialist group believed there was "still untapped potential of UNCTAD’s involvement in international efforts to work out practical solutions".

In the commodity sector, cooperation between producers and consumers was essential, and UNCTAD’s role should be extended to negotiation of possible new commodity agreements.

The entry into force of the common fund would also introduce important new elements and potential for changes.

Diversification of economic structures, and of the commodity sector in particular, remained one of the still viable solutions for commodity-dependent third world countries, particularly the LDCS. It was hence necessary to intensify UNCTAD’s work on diversification, processing, marketing and distribution of commodities.

In the area of international trade too, UNCTAD’s activities should be strengthened, particularly in the areas of its acknowledged expertise - regular review of protectionism and structural adjustment, data base an trade measures, trade in services, restrictive business practices, and trade among countries with different economic and social systems.