UNCTAD's Input, by Mr.Qaqaya, at the Fourth European Trade Network meeting of 2003

UNCTAD's INPUT INTO THE EUROPEAN TRADE NETWORK 24 NOVEMBER MEETING

The need to engage more UN involvement in trade and development issues has always been high on the radar screen of ICDA’s work on monitoring international development. Having participated in all UNCTAD conferences, ICDA – I suspect like much of European civil society alike – was particularly pleased to welcome UNCTAD official Mr.Hassan Qaqaya to the third and final European Trade Network meeting for the year, on 24 November 2003.

My first encounter with him would be at lunch when, along with some participants, I became engaged in what could be described as an informal-cum-formal discussion of the world post-Cancun, including the expanding role of NGOs, and the strength of character and vision of UNCTAD Secretary-General Mr.Rubens Ricupero. Mr. Qaqaya didn’t say anything that was inimical to the philosophy of UNCTAD. His ideas were refreshing, automatically dispelling my myth that UNCTAD officials were civil servants producing very prolific work, but in a somewhat perfunctory, or mechanical, manner.

With regard to the official version of his discourse, we were given a deep insight into the role of the UNCTAD Secretariat as facilitator of capacity building for developing countries, as well as eminence grise, as it were, of the developing country position at the abortive trade talks in Cancun.

It must be stressed that as representatives of NGOs at an NGO meeting, we were always going to remain cautiously optimistic about the views of an UNCTAD official. This sense of optimism, nonetheless, did not prevent us from asking serious questions about the upcoming conference, as well as how to integrate core themes for the upcoming UNCTAD XI in June 2004. That being said, process was of equal importance as of procedure.

Mr. Qaqaya said that UNCTAD was interested in obtaining more substantive contributions that could be fed into the preparations. Between now and June – only 6 months away – there are going to be a number of meetings, and having civil society send in contributions was paramount. The preparatory process actually started this year, but because of Cancun, UNCTAD tried to play it safe by not interfering too much with plans that could potentially stymie the efforts of developing countries at Cancun. In short, more effort was needed on preparing offensive strategies that could play in favour of developing countries (DCs).

As for the trade talks at Cancun, Mr.Qaqaya argued that for UNCTAD, that discussions failed was an indication that it was a balanced outcome.

Since Cancun, he continued, the agenda had been re-focused on trade, even if there was nothing explicitly stated by UNCTAD to this effect.

This particular agenda evidently has to do with UNCTAD XI, where a number of issues critical for developing countries will be discussed. However, it was important to stress that a number of issues from UNCTAD might appear contradictory to civil society. Of prime concern were the positions of two of UNCTAD’s flagship publications – the Trade & Development Report (TDR) and World Investment Report (WIR).

The origin of the apparent contradiction lies with the fact that these two reports arrive at what may appear to be two conflicting policy prescriptions. In other words, whereas the TDR may argue that despite the importance of multinationals, they tend to disturb national policies that gear towards people-centred development, the WIR will argue that multinationals are critical for engendering foreign direct investment (FDI), and this would most probably be stated categorically as if to say that they are indispensable. Qaqaya provided anecdotal evidence of UNCTAD Secretary-General (SG) Ricupero’s non-chalance towards this apparent contradiction by relating one occasion when Ricupero was questioned about this at a press conference to clarify this problematic. The SG duly responded "let flowers bloom".

In other words, both arguments can be true, provided they are backed up by research, but it does not necessarily mean that UNCTAD endorses one or the other, especially as UNCTAD has a well-established reputation on capacity-building.

On the issue of substance, Mr.Qaqaya said that UNCTAD would be proposing a number of issues for developing countries (DC) Specifically, UNCTAD remains interested in the issue of trade liberalisation—and how it can contribute to poverty-reduction. This is something, he suggested, that seems anathema to the WTO and EU/EC position. What was most astonishing, also, was the fact that this was the view endorsed by Mr.Rubens Ricupero himself.

On the WTO, Qaqaya maintained that the beleaguered multilateral trading organisation is going through a "deeper crisis than members and the DG[himself] would like to admit". This is something that UNCTAD believes can be capitalised on by civil society. The telling signs started with the Battle of Seattle in 1999, then came Doha which wasn’t necessarily considered a failure, but, rather a "partial success"— which, according to Qaqaya, attributed to the international developments surrounding the terrorist attacks in New York on September 11, 2001.

Cancun has yet again proved that the WTO is in crisis, and if this trend continues—irrespective of the December deadlines at the WTO to determine the extent to which the engine of multilateral trade can be re-started – it is "condemned to fail in its current mission". The reason for this is that the WTO has no development-oriented policy; yet, Qaqaya opined, development has to be "part-and-parcel" of the WTO process. If we go back to history, we see that the real reason for its failure lies with agriculture.

This begs the question of whether there is an alternative.

If we look at the UN, it itself is undergoing a crisis. If we look at the way the General Assembly and Security Council handled certain events, the prospects of change look bleak. However, there still is potential for strengthening the UN system so that it is more equitable.

On South-South relations/trade, Qaqaya said that SOUTH AFRICA, INDIA, and BRAZIL had made a recommendation for strengthening the Security Council; and if this were to lead to some meaningful changes, there could well be a radicalisation of the new multilateral system. As far as the preparatory process goes, UNCTAD XI could set the pace of reform of the multilateral trading system (MTS). Evidently, the role of the UN would be limited in this aspect because there would still be the need for rule-making and trade dispute resolution which, as Mr. Qaqaya suggested, the WTO remains an important forum by dint of its Dispute Mechanism.

This however does not detract from the fact that one of the fundamental flaws of the WTO is its preference for the single undertaking. This take-it-or-leave-it approach, Qaqaya went on, is wrong. It was a useful tool when moving from GATT to WTO in order to make up for all the agreements that were being discussed for fifty years. However, the situation was now different: using the single undertaking for new rounds and for all issues has led to a situation whereby it has blocked negotiations from proceeding.

This could be where the UN system could capitalise on assisting DCs. Many of the issues that are not yet ready could now be reviewed and discussed. This is where UNCTAD can also play a critical role. Its collaboration with Civil Society on research work in particular is welcome.

UNCTAD has two proposals for moving forward on the MTS: first of all, there should be an implementation of the Uruguay Round (UR) since 1995; secondly, of the 100 issues that are still pending in the Doha mandate, now would be the time to address them. Also, on special & differential treatment (SDT), this needs to be given an operational meaning. SDT could be part of the framework of the mandate – and not just an annex. There is also a question as to whether Singapore Issues (SI) should act as core or part of the framework.

A lot of work needs to be done on export competition because the benefits are quite clearly greater for some countries than others. For example, SOUTH AFRICA, BRAZIL and INDIA are the key beneficiaries. This remains a major challenge for UNCTAD to work on.

UNCTAD, Mr. Qaqaya maintained, is offering the following things on the agenda:

Final points were hard-hitting, but nothing to write home about:

Marc Maes (11.11.11): How are inputs processed/collected by UNCTAD?
A: Reports of the meetings with Civil Society will be taken on board and incorporated into policy. Parallel events will also be held.

Maud Johanssen (Forum Syd): What is the status of draft statement, and how will it be negotiated until the summit itself? Will there be a Programme of Action or a Declaration?
A: There will be a political declaration

E.K.Bensah II (ICDA): What does Mr.Qaqaya think of the Third World Network’s fears of UNCTAD XI’s potential to marginalise UNCTAD?

He was aware of statement, but hadn’t read it in-depth, so he asked me to read pertinent points that suggested that TWN was fearful of a departure from UNCTAD’s original mandate as facilitator for DCs.

Mr.Qaqaya maintained that civil society – TWN in particular – possesses intellectual leadership, and the capacity to make a difference. Unfortunately, it had not come out with a new model that could change the current matrix. There was a subtle implication – a thread that had been running throughout the meeting – that civil society had to do more than critique, but offer constructive matrixes, as it were, that could feed into UNCTAD’s research and capacity-building work.

Tobias Reichert (WWF-EPO): Is UNCTAD XI to be a forum for pre-negotiation of contentious issues? From my experience, UNCTAD X was just a text/work programme. It seems that UNCTAD XI goes beyond this.

Alexandra Wandel (Friends of the Earth Europe – FOE-Europe): Is there co-ordination by UNCTAD with other UN agencies? What is the EU position pre-UNCTAD XI?

For UNCTAD XI, it is the Geneva office of the EU that will be attending the meetings/discussions leading up to UNCTAD XI. There is an EU coordinator within the OECD. However, the contacts go outside the EU, and the US.

In fact, a lot of pressure has been coming from Washington asking DC ambassadors why they are not being flexible.

As for the EC/EU’s position, it is pretty much an island onto itself in the sense that it speaks on its own, but also sometimes with the US. When it suits their interests, it would not be uncommon for the EU to be smack bang in the heart of discussions.

Sadly, at the BWI/WTO meetings, there is often times incoherence, which can be embarrassing for UNCTAD officials.

Conversely, considering the proliferation of bilateral agreements, as well as the increasing prominence of regional groups (viz: SOUTH AFRICA/BRAZIL; SADC/MERCOSUR; CHINA/SOUTH AFRICA, etc) we are seeing a number of complex issues emerging as what could only be described as a counter-action to US agreements.

The interesting development is that the big DCs are not looked upon any differently than smaller ones. ANd Indian firms aren't differentiated from Chinese/UK firms. The latent tensions only come out at the WTO, where there is no G77 group. It is certain that complications will arrive (despite the common bloc positions of some DCs) from bilateral deals.

On negotiations update as of 12 November, issues of COTTON & SINGAPORE ISSUES were discussed. COSTA RICA spoke in support of the EU position, but the AFRICAN UNION (AU) argued that competition be dropped from the agenda. MEXICO supported Chairman’s proposal to have transparency. NEW ZEALAND (NZ) suggested that since no-one spoke against transparency on government procurement, there is consensus!

The question -- now more than ever -- is from what point to start negotiations for the failed talks in Cancun.

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