TWN Info Service for WTO Issues (June04/15)

22 June 2004

Third World Network




At the closing session of UNCTAD XI on 18 June in Sao Paulo, the G77 and China grouping made a detailed statement on their views on the Sao Paulo Consensus, the main substantive outcome of the UNCTAD session.

Although it welcomed the Consensus as a major and significant outcome, the Group also deeply regretted that on some key issues the Consensus diverged from the Group’s positions.

The US also expressed some concern on innovative financing mechanisms, especially taxation.

Two African countries offered to host UNCTAD XII.  The coordinator of the Africa Group stated that the Group would hold its own consultations.

Rubens Ricupero, outgoing Secretary General, made a farewell speech.

Below is a report of the closing session.

With best wishes

Martin Khor





TWN Report by Martin Khor, Sao Paulo 19 June 2004


Countries of the Group of 77 and China have welcomed the Sao Paulo Consensus adopted by UNCTAD XI as a “major and significant outcome”, but also deeply regretted that the outcome on some key issues diverged significantly from the Group’s positions.

The G77 said the reference to policy space in the Consensus was a significant development, but the final text on corporate responsibility fell well short of its aspirations, whilst the negotiations on the governance issue tested the flexibility of the Group to its limits.

The G77 and China statement on the Consensus document was presented on 18 June at the closing session of UNCTAD XI by the G77 and China coordinator for UNCTAD XI, Ambassador Ransford Smith of Jamaica, who also requested that the statement be included in the records of UNCTAD XI.

Earlier, the United States had also requested that its statement be part of the UNCTAD XI report.  After Ambassador Smith asked for clarification whether statements could be included in the record of the UNCTAD session, UNCTAD’s legal officer explained that only statements containing principles or reservations could be included, and not general statements. 

Smith said the G77 and China considered the Sao Paulo Consensus to be a major and significant outcome, made all the more noteworthy by the fact that recent events have shown that multilateral agreement on trade and development issues is not by any means assured.  The Consensus affirms the relevance of multilateralism and ensures UNCTAD will be able to continue to play its unique role as the focal point in the UN system for trade and development and the interrelated areas of finance, technology, investment and sustainable development.

He said the text adopted is not ideal and there are shortcomings but it bears the hallmark of a consensus process in which all parties are accommodated.

“In our Group we deeply regret that the treatment of some key issues of primary interest to our members diverges significantly from the position that the Group adopted in the detailed input in provided last December,” said Smith.  “We had a much higher level of expectation with regard to the outcome of issues such as policy space, corporate responsibility, commodities, capital flows, debt, ODA, innovative financial mechanisms and trade.”

He however assured the meeting that G77 and China would give full support and work tirelessly for implementation of the Consensus. 

From the start, a key objective of the Group was to ensure that after 40 years of existence, UNCTAD would not be marginalized but instead strengthened in its vital role of supporting developing countries through its three pillars of consensus building, research and analysis and technical assistance and capacity building.  “We are satisfied that the basis for continuing to ensure this has been laid in the Sao Paulo Consensus,” said Smith.

Smith added the Group had repeatedly underscored the importance of Policy Space in pursuance of development objectives.  “The negotiations in this area were long and difficult.  Our expectations were not fully met.  However we believe that the inclusion of a paragraph on this important issue in the Sao Paulo Consensus is an important development.

“This is the first time that this issue is appearing in the final document of UNCTAD and, indeed, in any negotiatied multilateral text.”  He expressed appreciation for the effort by developed countries to respond to the G77 and China’s deep seated desire to have policy space reflected in the text.

The G77 and China believed the Consensus has also struck an appropriate balance on UNCTAD’s participation in the UN reform process and its cooperation with other organizations.

On trade, G77 and China was convinced UNCTAD XI could play a positive role to deepen understanding of issues of major concern to developing countries in the Doha negotiations and should also lay the ground for continued support in this area through its three pillars.  This has largely been achieved.  This is satisfying to the Group as some of its partners had taken an initial position of reticence on this issue.

Smith said that besides the on-going work on multilateral trade negotiations, the G77 and China anticipated new work from UNCTAD on dynamic sectors of world trade, development benchmarking and the interface between the multilateral trading system and regional agreements. The launching of the GSTP’s third round also underscores the importance of UNCTAD’s work on South-South trade.

There has also been progress on some issues, such as home country measures and security-related measures and their impact on trade, whilst there is increased scope for UNCTAD to address ICT and development.

“On corporate responsibility, the outcome fell well short of our aspiration that work to be undertaken by UNCTAD in this area should go beyond voluntary arrangements,” said Smith.  Notwithstanding this, it should be possible for UNCTAD to undertake useful work in this area.”

Smith added that the G77 and China expressed its deep concern at the increased application of coercive economic measures and unilateral sanctions against developing co9untries, including the new attempts aimed at extraterritorial application of domestic law, which violate the UN Charter, the principles of the multilateral trading system and WTO rules.  G77 and China rejects the imposition of laws and regulations that entail extraterritorial consequences and all other forms of coercive economic measures and reiterated the urgent need for their immediate repeal.

Smith also said the flexibility of the Group had been tested to its limits in the last few days particularly on governance, “which we maintain is applicable at both national and international levels.” 

The final document is in many ways significantly different from the Group’s initial position but the Consensus is “substantive and meaningful in its content both for our countries and for UNCTAD as an organization, said Smith.

The United States, in its statement, said it had come to UNCTAD XI to contribute to broadbased development for the poor.  Governance, the rule of law, enforcing contracts and fighting corruption are important.  These issues are reflected in the text but should be given more emphasis.

It said that UNCTAD should have focus in its work as it was too easy to be sidetracked by calls for innovative financing and unsound proposals such as taxation when existing financial institutions are adequate.  It would work with UNCTAD to ensure developing countries will get the advice they need.

The Ambassador of Benin based in Geneva, Samuel Amehou, speaking for the LDC Group,  said the LDCs welcomed UNCTAD’s LDC report which showed its growing maturity.  He added that UNCTAD XI had specified and redefined UNCTAD’s mandate, and “we must move to action to implement all the recommendations so that this is not just one more conference.” He asked that UNCTAD produce a report on LDCs annually from 2006.

The delegations of Ghana and Tunisia offered to host UNCTAD XII.  Senegal, which coordinates the Africa Group, said it had received a number of requests for hosting UNCTAD XII and the Group would deal with these requests according to its procedure, including consulting at the highest levels.

Ireland, speaking for the EU, said it wanted UNCTAD to help developing countries use trade for development and prioritise the needs of LDCs.  It should focus on results.  Key areas include mainstreaming trade in poverty reduction, dealing with the supply constraints and good governance at national level. It also welcomed South-South trade and efforts to revive the GSTP.

UNCTAD Secretary General Rubens Ricupero gave a closing speech for UNCTAD XI as well as a farewell speech in view of his forthcoming retirement.  Referring to UNCTAD XI, he said “we wish this should be remembered as truly a moment of consensus.  There are honest differences of opinion as there is a diversity of countries at different levels of development.

“We should listen even if there are sharp disagreements with our own view.  It is only a diversity of approaches that leads to the best.”

Saying this was his last UNCTAD conference as secretary general, Ricupero said he was happy in this session to see the “renewed sense of commitment of the international community to this organization.”  He added that he had tried to broing the spirit of cooperation between UNCTAD ands the WTO and there was no choice but for for them to cooperate.

“At the same time, to integrate developing countries in the world trading system, we need not only successful trade negotiations but to address the dark side.  The supply side constraints facing developing countries are very serious and complex.

“Many developing countries fear trade negotiations as in their hearts they know they are not competitive, they only depend on two or three commodities to export, so hopw can we expect them to be enthusiastic about negotiations.UNCTAD has to help them address the supply side and in the negotiations.”

Ricupero concluded by speaking of the need to recognize the “indivisibility of solidarity”, where “we must fight new threats of terrorism but also have solidarity with the LDCs, the poor, to overcome disease, poverty, climate change.”    He ended by quoting from three poets on this theme.