TWN Info Service on WTO and Trade Issues (Apr08/11)
24 April 2008
Third World Network

Trade: UNCTAD XII kicks off, with calls for action on food crisis
Published in SUNS #6460 dated 22 April 2008 

Accra, 21 Apr (Martin Khor) -- UNCTAD XII has kicked off with a opening ceremony on Sunday afternoon and a high-level segment on Monday morning, both of which featured the political leaders of Ghana, Brazil and the Secretary General of the UN.

At Monday's session, UNCTAD secretary general Supachai Panitchpakdi and WTO director general Pascal Lamy also spoke, as did Finland's President, leaders of Rwanda, Sierra Leone and El Salvador and the Indian Commerce Minister, among others.

The global food crisis was one prominent theme, with both UN Secretary General Ban Ki-Moon and Supachai calling for an increase in production in developing countries. Citing what some of the political leaders had said, Supachai concluded: "Developing countries can't only import food but have to expand their local production."

Reference was also made by many speakers on the need for the WTO's Doha Round should conclude, although some also stressed that its outcome must have genuine development content.

The most forceful reference to the Doha Round was made by Kamal Nath, the Indian Commerce Minister. "What is most important is the content of the DDA," he said. "At the end the content must lead to healthy economies in Asia, Africa, the Caribbean, Latin America. Only if the content of the Doha Round leads to healthy economies will there be real meaning and sense in a Development Round."

Several delegates have been speculating in the corridors whether there will be a WTO mini-Ministerial in May. About a week ago, it was a common belief that such a Ministerial would start on 19 May.

However, some senior WTO diplomats arriving at Accra from Geneva are now doubting whether a 19 May start is possible, due to the developments of the past week, especially the need for more work on consumption data in sensitive products, and work on tropical products.

One diplomat also pointed to the many statements made at the informal Trade Negotiations Committee meeting last Thursday cautioning against rushing into a "horizontal process."

At his speech to UNCTAD XII on Monday, Lamy made a brief reference to the current WTO negotiations, stating that a breakthrough is possible in "late May."

A senior trade official from an Asian capital was of the view that a Ministerial in May is looking like a more remote possibility. According to his assessment, the Chairs' texts on agriculture and NAMA modalities may be delayed to the first or second week of May, and this would in turn delay the senior officials' meeting that is to precede the Ministerial.

In his opening speech on Sunday, Brazilian President Luiz Lula da Silva said that massive agricultural subsidies in developed countries had made victims of poor nations. He spoke against the protectionism of the North which perpetuates dependency of the South.

On Monday, he returned to this theme, saying that free access to agricultural markets is vital and he called for the elimination of massive Northern agricultural subsidies that do so much harm to developing counties, "that is why we are fighting for success in the Doha Round."

He added that the multilateral trade system must be fair and that persistence of subsidies stops all attempts to overcome North-South imbalances. He also said that South-South trade should not be restricted by FTAs, which is a reference to a clause in the economic partnership agreements (EPAs) between the EU and ACP countries, by which the ACP countries have to provide the EU with the same preferences that they give to other countries (including developing countries).

Ghana's President John Kufuor quoted Ban's statement that Africa is the epicentre of a development emergency and Tony Blair's statement that Africa is a scar on the conscience of humanity. He cited data on Africa's declining shares of world trade and investment.

The original objectives of UNCTAD had not been fulfilled, said Kufuor. The North has displayed half hearted efforts and cynicism at assisting development, the South is now sceptical (of the North's sincerity) and both must now have a common vision. On problem was the developing countries not having the opportunity to protect their infant industries and farmers.

He said the Doha Round was launched to reform the multilateral trading system, to shift from market access to a development agenda, but unfortunately the negotiations are on-going. We need fair market access, special and differential treatment, reduction of Northern subsidies, South-South cooperation, aid for trade, ODA and FDI. If the international community defers solutions, it will condemn itself to more intractable development problems.

He concluded that the turbulence in the petroleum and food markets must be tackled on an "emergency footing."

Ban Ki Moon said this was a crucial time, with fresh thinking and approaches needed. The crisis of development takes extreme forms, mentioning firstly the sky-rocketing prices of food, as the prices of staple foods increased by more than half in the last six months. The ban on rice or wheat exports by some countries threatens to exacerbate the problem.

The food crisis can trigger multiple other crises, warned the Secretary General. The causes are many, including the switch to biofuels, high costs due to oil price increases, and financial speculation. The world has consumed more food than it produced and this is unsustainable.

Immediate humanitarian action is needed, but in the long run production must be increased, said Ban, mentioning the need for a Green Revolution in Africa. He announced he would set up a task force of experts to look at all elements of the food crisis.

He also called on wealthier nations to rethink their old policy on agricultural subsidies. "If we can't reduce subsidies when the prices are high, then when will we do so?", he asked.

UNCTAD Secretary General Supachai, who facilitated Monday's high-level segment on the theme of African trade and development, said the challenge was for Africa to attain the needed 7% growth of income a year, to reach the MDGs by 2015. An alarming fact is that growth in Africa has been jobless, and even the growth in the past few years had not addressed the job problem.

Calling for the emergence of a new paradigm in Africa, he said rhetoric was not needed and economic theories had failed to produce results in Africa. Moreover, economic integration had not been practised well, with intra-Africa trade being only 10% of its total trade (compared to 50% in Asia).

Finland President Tarja Halonen called for a new Africa to find a new Europe, both need to be reformed.

Former Tanzanian President Benjamin Mkapa said Africa had to design its own counter-measures against the global financial crisis, and also to prepare for either eventuality with regards to whether the commodity boom prevails. He also decried the steep decline in ODA of the past few years.

Pascal Lamy waned of rising protectionism in Europe and the US. There was a consensus that the trading system has to be re-balanced in favour of developing countries, by changing the trade rules. If the Round is concluded, trade distorting subsidies would be reduced by about 75% and export subsidies would be eliminated.

He added that intensive technical discussion has yielded progress towards a breakthrough, that is possible at the end of May. Success required a balance between trade distorting subsidies, agricultural tariffs and industrial tariffs.

Kamal Nath announced that India had launched a duty free tariff preference scheme for LDCs. India will remove duties on 85% of tariff lines in 5 years and for another 9% of products there would be a preferential rate. The scheme would cover 92.5% of the LDCs' exports.

Concluding the high-level segment, Ban said we need to face threats like climate change, the food crisis and to have a fair multilateral trade system. The window for decisive action is closing fast and we must take bold steps for Africa, he said. +