Jun 6, 1986


GENEVA, JUNE 5 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The socialist countries of Eastern Europe have challenged the vies that they are decelerating their imports of manufactures and semi-manufactures from the third world countries.

Peter Gottfried of Hungary, speaking Wednesday in the UNCTAD Committee on Manufactures on behalf of the Socialist Group, questioned the conclusions in the Secretariat Report about the trend in manufactured exports trade between the socialists and third world countries.

The report had said that the share of third world manufactures exports to socialist countries of Eastern Europe and Asia had fallen from a 9.9 percent in 1970 to 6.7 percent in 1983, though this was attributed to the faster rate of growth of third world exports to OECD countries and other third world countries.

Gottfried said the Secretariat analysis was based on data from only 55 third world countries and territories, and did not take into account over 60 percent of trade figures of third world countries.

Among the countries whose trade had not been taken into account, he said, were India, Mexico, Iraq, Libya, Syria and Iran - countries with which the socialist countries of Eastern Europe conducted a dynamically expanding trade.

"Differences in classifications used in different parts of the document also made interpretation of figures difficult", the socialist spokesman commented.

The data from UN monthly statistical bulletin, incorporated in another table of the Secretariat Report, and which suggested the trade of all third world countries with the socialist world had been taken into account, gave a different picture.

According to this table, third world exports of manufactures to socialist countries had grown at an annual 12.9 percent rate between 1980-83, while that to OECD countries had grown at 9.9 percent and to other third world countries at 3.5 percent.

This showed that the socialist countries had in fact continued to increase trade in manufactures with third world countries in the 1980's, and the growth rate of 12.9 percent was twice as high as the average of growth in third world exports to all destinations.

This the Hungarian Delegate emphasized was mainly due to the preferences granted by socialist countries to third world exports, to the establishment of a framework of intergovernmental agreements and trade promotion activities.

The expansion of imports of manufactures by socialist countries had also taken place a time when world imports of manufactures had actually decreased by an annual 1.2 percent, and imports of manufactures by socialist countries from all sources had decreased by 0.6 percent.

On the wider issues, the Hungarian delegate underlined that despite earlier commitments undertaken at UNCTAD-VI, and despite the "stage of recovery" in OECD countries about which the Canadian delegate had spoken on tuesday, there had been "further deterioration in the international trading system".

"Protectionist measures have widely proliferated and further intensified, in many cases on a discriminatory basis".

The socialist countries of Eastern Europe continued to be subject to such measures and other restrictions at a high level of discrimination.

Supporting the Secretariat's view on need for a strong disciplined, international trading system, based on unconditional MFN treatment, the socialist spokesman said that the new round of multilateral trade negotiations in GATT should play "an important role in genuine trade liberalization efforts and in strengthening of the international trading system, and the observance of its basic principles of unconditional MFN treatment and non-discrimination".

The negotiations in the new round, as in the Tokyo round, should also be open to "any interested country wishing to participate".

Japan's Kiyohiko Nanao said Japan was seeking to encourage imports from the third world through such means as technology-transfer and expanded investment to promote export industries.

The UNCTAD Secretariat report has brought out that in terms of imports in relation to GDP, Japan ranked the 16th. among 21 OECD countries, and in relation to its per capita GDP it ranked 17th.

Yugoslavia's Zoran Pandurovic said the third world countries had not yet been able to eliminate the consequences of the strong recession at the beginning of the 80's and of the disruptions in the world monetary and financial system.

Nor had they been able to capitalize on the advantage of economic recovery in a number of industrialised countries.

This was because the recovery in industrial countries had itself been uneven and insufficient, and also because the long-term structural imbalances in international trade and the shortcomings of the global trading system had substantially reduced the positive impacts on trade of third world countries.

The committee should focus attention on obstacles that exports of third world face in industrial countries, and the discriminatory protectionist measures applied against them, Pandurovic said.

The MFA was the "most obvious example" of the discriminatory nature of such trade barriers, and the existing system should be phased out within a short and specified time-table.

While Yugoslavia did not underestimate the importance of the efforts to be undertaken by the third world countries themselves, "evidence undeniably shows that such efforts are likely to be fruitful and produce the expected results only if accompanies by a substantial improvement of access to developed countries markets", he added.

The effective implementation of standstill and rollback commitments was hence important.

Sweden's Brigit Van Dee Giessen said while there was considerable positive indications of third world export performance and increase imports by OECD countries in 80's during a period of recession, "a majority of the developing countries account for no more than about two percent of manufactured exports to OECD countries".

There was a notable concentration of manufactured exports from the third world to a limited number of suppliers and destinations.

The Swedish delegate supported the Secretariat view that unstained economic development required a delicate balancing act between national considerations and adoption to global context, and that it was for each country to find its own mix of measures for improved export capability.

The U.S. delegate, Leonard Lange of the U.S. State Department, said that the gains made by the third world countries in the U.S. market was due to its openness and large size.

But two other variables that had helped in the 80's were the rapid U.S. economic growth since 1982, and the appreciation of the dollar.

"These latter two variables can no longer be counted on to boost developing country manufacturers' exports".

The decline in the value of the dollar since last September, the reduction in interest rates and decline in energy prices were "positive developments", and industrial and third world countries should respond to these and facilitate economic growth by a commitment to a new round of multilateral trade negotiations.

It also required economic reforms in the third world, specially in indebted countries, to enable stronger growth and reverse capital flights.

These reforms should include privatisation of public enterprises, better environment for domestic and foreign capital, and trade liberalisation.

Earlier the U.S. delegate disagreed with the UNCTAD report which had said there had been no causal link established between open economies and export growth, and that far east economic models in present world climate could not be replicated by other third world countries, specially if they all attempted to do at the same time.

The "petitioning" for greater market access by third world countries, the U.S. delegate said, implied their "obvious desire to link their overall development and growth to the international trade and economic system", and the available useful evidence to attain these CNDS should be made available by UNCTAD.