LDC meet on Trade and Development a success?

by Chakravarthi Raghavan

GENEVA: A two-day High-Level meeting on Integrated Initiatives for Trade and Development of the Least Developed Countries (LDCs) at the WTO ended on 28 October, with the WTO and several of the participating LDC ministers declaring it a success.

A cross-section of LDC ministers spoke almost effusively at a closing press conference on 28 October - praising the WTO for the initiative, and enabling them to participate and present their views and needs and how the integrated approach to the problems of LDCs at the meeting was an important step forward.

But at the end of the day, it was difficult to separate the intangibles and promises from the tangibles, and assess what in fact, the LDCs have gained.

A diplomat from one of the major developing countries that have been pushing the LDC initiative said that a clear picture would be available only when the countries concerned, who have announced some benefits for LDCs, notify the same to the WTO and UNCTAD, and when the Ministerial Conference of the WTO in May 1998, on the basis of a report from the Secretariat, takes decisions.

But the mere fact of the meeting had impelled his own country, and several others from the developing world, to complete their plans to provide some concessions to the LDCs in their regions and announce them, he said.

The WTO head, Mr. Renato Ruggiero (since the last G-7 summit at Lyon, where he aired the proposal) has been pushing for WTO commitments by Members to provide duty-free and quota- free access to the exports of the LDCs.

And the Commerce Minister of Bangladesh (which has been leading the 48-member LDC group), Mr. Tofail Ahmed, repeatedly underlined the need and hope that the next WTO Ministerial Conference (in Geneva, in May 1998) would decide on the duty- free, quota-free access to markets for LDC exports.

However, it seems very unlikely that the major developed nations - the US, EC, Japan or Canada - would go that far, and bind their various "trade concessions" into WTO-enforceable obligations.

At the press conference, the Ministers from Bangladesh, Nepal, Tanzania and Uganda all suggested that the meeting, and the invitation to them to participate, showed that the WTO was not a club of the affluent.

But in a politely worded remark, Dr. Prakash C. Lohani, the Commerce Minister of Nepal (which is negotiating its entry into the WTO), said that no international system that marginalises 500 million people could be viewed as fair and just. He then went on to praise the WTO for taking the initiative.

Market access concessions

Several industrialized and developing countries at the two- day meeting announced autonomous preferential market access concessions to favour the LDCs. The LDCs - in the 12 in- country round-tables (for Nepal, Haiti, Vanuatu, Madagascar, Tanzania, Djibouti, Zambia, Mali, Bangladesh, Chad, Uganda and Guinea), and during thematic discussions, presented their needs to improve their capacities in supply terms, infrastructural abilities and to take advantage of market access concessions to expand exports and earn more.

The six international institutions that participated (WTO, UNCTAD, ITC, UNDP, World Bank and the IMF) all promised to coordinate their own activities in terms of helping the LDCs.

But at the moment all these remain in the realm of promises. Perhaps by the time of the WTO Ministerial meeting in May 1998, an assessment of the real benefits from all the promises (in market access) could emerge.

That, despite the promises, the international organizations would continue with their "turf battles" was forcefully brought home at the final plenary on 28 October, over the adoption of the report.

A Secretariat draft for a Report of the Meeting, put before the final plenary by the Chairman, Dutch Cooperation Minister, Jan Pronk, had "invited" delegations that had announced initiatives to improve market access for LDCs to notify the details to the WTO Secretariat as soon as possible.

Egypt proposed an amendment that the details should be notified both to the WTO and UNCTAD. The Egyptian representative noted that in respect of the Generalized System of Preferences (GSP schemes), of preferential tariff concessions by developed countries favouring developing countries, UNCTAD was the relevant international organization. And in terms of the Global System of Trade Preferences (GSTP) among developing countries, under which developing countries could extend special benefits to the LDCs, UNCTAD was again the relevant organization.

Though no one from the floor opposed it, the Egyptian suggestion met with some resistance (the source of the resistance was not clear to the media who had been listening to the proceedings in a separate room ), but some participants who did not want to be identified later, said that the WTO Secretariat did not seem to favour sharing a role with UNCTAD.

Chairman Pronk repeatedly suggested that the report be adopted as it was, but Egypt did not yield nor withdraw its objection. At one point, the Egyptian representative suggested that the reference to the WTO itself should be eliminated, thus leaving it to members to decide whom they should notify.

At this point, the US intervened and said it found no reason why the original Egyptian amendment (for both UNCTAD and WTO to be notified) could not be adopted.

The report was then amended and adopted.

But for such a "turf battle" to emerge, when the heads of the two organizations (UNCTAD Secretary-General, Rubens Ricupero and WTO head, Renato Ruggiero) have been repeatedly affirming their joint cooperation to help the LDCs, suggests that the cooperation and coordination of all the six international organizations, with their conflicting ideologies, may still not be so easy.

At one stage in the thematic discussions and the round- tables, Pronk urged the LDCs to put on the table openly, their "corridor" complaints about the lack of coordination, and sometimes contrary advices given to them, by the international institutions and bilateral aid agencies, each pursuing their own ideological and other interests.

But not much of these complaints, or specific instances of lack of coordination or contrary advices, surfaced. Perhaps Pronk was expecting too much. Countries that will still have to deal with the international financial institutions and funding agencies for small favours can't be expected to criticize them openly.

The meeting, in the Report adopted, asked all WTO members to keep constantly under active review all options for improving market access for LDCs. The WTO Director-General was also asked to provide a full report on the outcome and follow- up of the meeting and the implementation of autonomous market access measures and commitments announced, to the WTO Ministerial Conference in May 1998 (in Geneva).

In a statement (incorporated in the Report), Pronk said that from the consultations before and during the High-Level meeting, and from the discussions at the two thematic round tables, he noted that there was wide support for the contents of the recommendations. The WTO Secretariat, he said, should convey these recommendations for the consideration of the appropriate intergovernmental organizations as well as to the governments of LDCs and their development and trading partners. (Third World Economics No.173, 16-30 November 1997)

Chakravarthi Raghavan is the Chief Editor of the South-North Development Monitor (SUNS)from which the above article first appeared.