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UNCTAD, a permanent intergovernmental body, which is a principal organ of the United Nations General Assembly dealing with trade, investment and development, was established in 1964. In this era of globalisation where Bretton Woods institutions are playing a major role in formulating international policies, the role of an institution like UNCTAD becomes important in the sphere of international trade. From the inception of UNCTAD, the role of it had been to act as an alternative to the mainstream discourse in the field of trade policies and development. In this period, the WTO had attained much importance and UNCTAD worked as a kind of agency to facilitate it. This had been possible because of change in the vision of UNCTAD that is due to more acceptance of neo-liberal paradigm.
In every four year, the highest decision-making body of UNCTAD (the member states) meet to make assessments of current trade and development issues, discuss policy options and formulate organisation's mandate and work priorities. The theme of UNCTAD XII will be broadly, addressing the opportunities and challenges of globalisation for development. The outcome of the present day globalisation have not been equally beneficial for all the countries and for all the people within a country, in other words inequality has increased intra country and inter country. The present situation is worsened by US economy slowdown, rising prices of crude oil, rising price of foodgrains. Still not much heed have been made on Doha round trade negotiations under WTO. In these backdrops, UNCTAD XII is going to held in Accra this April.
A one-day consultation was organised by CENTAD on March 25, 2008, to discuss the issues relating to the forthcoming UNCTAD XII to be held in Accra, Ghana in April 2008. In this light to look at the possibilities that are there and what should be the vision of UNCTAD, this consultation has been organised.
Transcript of the Consultation
The session proceeded under the following sessions.
Session 1: Run-up to UNCTAD XII
Setting the Context by the Chairperson Prof. B. S. Chimni
From UNCTAD XI to UNCTAD XII – A stocktaking Atul Kaushik
India, UNCTAD XII and DOHA Himanshu Gupta
Session 2: Doha Round and UNCTAD
Chair Prof. B. S. Chimni.
State of Play of Doha Negotiations and UNCTAD XII Jayant Dasgupta
Development Concerns in Doha Round and beyond: Role of UNCTAD Prof. Biswajit Dhar.
Two Tales of UNCTAD
Prof. B. S. Chimni who was chairing the 1 st session gave an impressionistic background of UNCTAD touching upon a wide range of issues with which UNCTAD had been associated and how its vision had been changing. According to him, there are two legs of UNCTAD, old UNCTAD roughly from 1964 to 1989 and NEW UNCTAD from 1989 onwards. The visions of both these two UNCTAD are quite different. UNCTAD came up in opposition to GATT formed mainly by the developing countries, since GATT was not concern to the specific need of the developing countries. Some of the charters of the UNCTAD were derived from the old charter of WTO. Some of the amendments in the GATT, mainly PART IV ( preferential treatment to the developing countries) was because of UNCTAD, it acted as a competing body to GATT. UNCTAD was involved in the preparation of the legal basis for preferential trade, revision of Paris convention, South-South trade, code of conduct on transfer of technology, identified 14 restrictive trade practices, GSTP measures, shipping laws, code of conduct on TNCs with respect to developing countries. UNCTAD was first to talk about brain drain, its impact on developing countries. The importance of the relation between environment and trade got first importance in UNCTAD conference. Even the competition issue, which is so central in WTO, the genesis of it can be found in UNCTAD. This point was raised by Prof. Biswajit Dhar in the second session.
Prof. Biswajit Dhar also gave a picture about the functioning of UNCTAD in the pre-1989 period; according to him, UNCTAD was a platform which was more pro-developing countries. The issues like commodity prices, terms of trade trends, contestability of markets, all these are issues concerned with competition in the world trade, and these issues had been dealt in a holistic manner in UNCTAD.
UNCTAD was not only functioning as an agency that was providing pro-developing countries alternative instruments in the GATTs, but it was providing alternative theories competing the mainstream theories. The comparative advantage theory is the central mainstream theory that promotes international trade, in opposition to it Dependency Theory, the theory of unequal exchange and TOTs were developed. The births of these theories were in UNCTAD itself which provided a kind of alternative vision to the practice of trade. The outcome of these could be seen in the form of policy instruments or issues dealt by the UNCTAD in those periods.
There has been role back on these agendas on part of UNCTAD after 1989. Now it is more aligned with the Washington consensus, this point has been mentioned by both Prof B. S. Chimni and Prof Biswajit Dhar. It may be because of the hegemony of the unipolar world in the world scenario that came into existence after the fall of the Socialist block. This was discussed when the floor was opened for discussion after the first sessions. Although no clear explanation was given for this dominance of WTO and alignment of UNCTAD with it but the floor had a consensus over the above given reason for it.
From UNCTAD XI to UNCTAD XII
UNCTAD XI was held at Sau Paulo, Sau Paulo Consensus (SPC) was the outcome of that conference. Mr Atul Kaushik spoke about the themes of the SPC and some of the achievements on those themes. There were four main themes of the SPC, Development strategies in a globalising World economy, Building productive capacities and international competitiveness, Assuring development gains from international trading system, Trade negotiations and partnership for development.
SPC recognised the unequal receipt of the benefits of globalisation and its adverse social impact on many developing countries. So the role of the state has been emphasised in development policies, thus recognising the need for ‘policy space' for developing countries instead of one-size-fits-all approach in neo-liberal paradigm.
SPC pledged to bring to light the interest of the developing countries so that concrete development outcomes from negotiations could be brought in accordance with the Doha Development Agenda (DDA). Sixteen issues related to the developing countries arising out of the Doha negotiations have been listed through the activities of UNCTAD it was expected to address these issues.
SPC maintained the existing mandate in regards of the provision of technical assistance, research and analysis.
It made commitments to various international instruments of recent origin like, Millennium Development Goal, the Monterrey Consensus, World Summit on Sustainable Development and the programme of Action for LDCs, and focus on policy space and eradication of poverty and hunger.
Review of Achievements since Sao Paulo
Mr Atul Kaushik presented an account of the achievements of UNCTAD since Sao Paulo. The main achievements were in terms of regular publications, the trade and development report (TDR), world investment report (WIR), besides its annual report. These reports fulfilled some of the mandates of SPC like TDR for example on the theme ‘Development Strategies in a Globalised World Economy', WIR have produced some statistics and investment policies policy review of eight developing countries. The Integrated Framework (IF) programme fulfilled a number of mandated activities like ‘economic development in Africa' report of UNCTAD, the Debt management and Financial Analysis System (DMFAS). Specific inputs to the developing countries related to WTO trade negotiations have not come up. This point has been reiterated by Prof. Biswajit Dhar in his talk in the second session. There are some developments like Trade development Index (TDI), Trade Analysis and Information System (TRAINS), World Integrated Trade solutions (WITS), Agriculture market Access Database (AMAD), Agriculture Trade policies Simulation Model (ATPSM), Common Analytical Market Access database (CAMAD) Measures Affecting Services Trade (MAST), these help to formulate bargaining position in the WTO negotiations. Except for few expert level meeting relevant for DDA like on non-tariff barriers and financing of commodity-based trade and development, UNCTAD have not taken any major initiative regarding WTO negotiations.
The Themes of UNCTAD XII
The main themes of Accra conference have been discussed by Mr Atul Kaushik. They are: a)Addressing the opportunities and the challenges of Globalisation for development. Globalisation has lead to huge generation wealth for particular industry and particular country, UNCTAD's TDR documented the ascent China and India as major exporters in some commodities. It has intensified competition on some commodities. The benefits out of it have not been uniformly percolated to all the industries and countries. So UNCTAD intends to explore possibilities to make the gains from this increase in trade more evenly distributed.
The sub themes as discussed by Mr Atul Kaushik are:
a) Enhancing coherence at all levels for sustainable economic development and poverty reduction in global policymaking, including the contribution of regional approaches.
b) Key trade and development issues and the new realities in the geography of the world economy. Here UNCTAD emphasised the need for the critical evaluation of WTO paradigm and then proposal of new paradigms for promoting fair trade.
c) Enhancing an enabling environment at all levels to strengthen productive capacity, trade and investment: mobilising resources and harnessing knowledge for development.
d) Strengthening UNCTAD: enhancing its developmental role, impact and effectiveness.
Doha round and UNCTAD
Mr Jayant Dasgupta talked about the major negotiations going on in Doha Round of WTO negotiations that are Doha Development Agenda. The four major areas are: a) agriculture b) NAMA c) Services d) anti-dumping, subsidies to fisheries, incorporation of biodiversity in trips.
As discussed, in agriculture the issues involved are domestic support and the export competition. The duties have to be cut by 38%- 40% as given by the formula. So some of the duties, which are at 80-60 % will come down by 40 %. Some of the duties will be reasonable high at 150-200%. Here lies the question of special products that do come under tariff reduction but due to the formula the tariff reduction will be less in those products. The question is which products will come under special product category. Cannes group of countries, Brazil, Australia, Argentina etc wanted tariff reduction in the European Union, the US, China and India since they are the primary commodities exporting countries. The G-10 countries, Japan and South Korea wanted to protect agriculture. The developing countries, China and India are not high primary goods exporting countries but have high dependency in agriculture. So need for special safeguard mechanism. It has been misused by the US and the EU. The issues which are still unresolved are domestic support since the US is giving high subsidy and sensitive product. It is difficult to specify the sensitive product since a lot of primary products get transformed because of use as inputs and used as feed for livestock so difficult to get data.
The Swiss formula is used for tariff reduction in NAMA. So very less space for policy decision for the developing countries since fall of tariff of the developed countries won't be much relatively. The market access will be very less. This issue is still unresolved.
In Services sector the issue that remained unresolved is in MODE IV,the movements of the individuals. The developed countries are not willing to give up in this issue; whereas developing countries are opening to the foreign banks, insurance etc.
Japan and Britain are trying to bring in discipline in fisheries that will adversely affect the fishermen of the developing countries. These issues have been elaborately dealt by Mr Jayant Dasgupta.
The role of UNCTAD
Mr Jayant Dasgupta pointed out that a lot of home work is required for these WTO negotiations. Many developing countries have no technical expertise to do these works so UNCTAD can provide the required technical expertise. UNCTAD had been providing technical expertise to many developing countries. UNCTAD provides assistances to change the capacities in developing countries. It has been promoting South-South trade. But Mr Jayant Dasgupta was skeptical about the importance of South-South trade since only 23 countries participated in it. He was more of the view that WTO is main plateform for trade negotiation and UNCTAD should act as subservient to it by providing technical assistances. In fact he was arguing in favour of give and take that happens in any WTO negotiations and not concerned about the different stakes involved for the developing countries. In aggregate the outcome of the WTO negotiations and FTA negotiations have been beneficial for India. He had not provided any evidence for it and also shown less concern for the distributional impact these negotiations have in terms of regional inequality in India.
Mr Himanshu Gupta talked about the future relevance of UNCTAD. According to him, UNCTAD has been heading towards redundancy because of the emergence of new institutions. But it is still relevant with regard to research for analysing the present situations. The main issues regarding the research according to Mr Gupta are problem of tariff escalation it has been identified by UNCTAD, possibilities of South-South trade, rule based nondiscriminatory principle based trade, country specific studies. The Indian Government has given high priority to Accra conference so that some consensus can be built on the issues like developed countries will give access to their market only if the houses of the developing countries are in order.
Prof. Biswajit Dhar talked about need to change the technology paradigm in international trade, review of trips and making it more beneficial for least developing countries. These initiatives can be taken by UNCTAD and how UNCTAD used to take these type of initiatives in earlier periods. Another important point made by Prof. Dhar in this regard is that for different countries different things are at stake and in WTO negotiations the stakes of the many developing countries did come in consideration so UNCTAD has to play a role in it.
Another important issue that came up in the discussion was funding of UNCTAD. The developing countries which are its members are the major fund provider and the funds from the developed countries have decreased severely during this period. UNCTAD is facing a kind of fund shortage these days. So they are involved in studies that are not of much importance to the developing countries. So not many country-specific studies of the developing countries are being done by UNCTAD.
The discussion ended with the view that there is the need to bring about change in the vision of UNCTAD that should have positive impact on the developing countries through its initiatives.
(Centad thanks Amarjyoti Mahanta, M Phil student, Jawaharlal Nehru University, for his substantial contribution in preparing this report)
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