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Info Service on WTO and Trade Issues (Oct21/15) Geneva, 15 Oct (Kanaga Raja) – The fifteenth quadrennial session of the United Nations Conference on Trade and Development (UNCTAD-15) on 7 October adopted the “Bridgetown Covenant” that amongst others underscores the need to re-invigorate and re-vitalize UNCTAD’s intergovernmental mechanism. The Bridgetown Covenant also outlines a roadmap for transforming economies through economic diversification; fostering a more sustainable and resilient economy; improving the way development is financed; and revitalizing multilateralism. The UNCTAD-15 conference was held in a virtual format from 3-7 October in Bridgetown, Barbados, under the theme “From inequality and vulnerability to prosperity for all”. The conference had also adopted a political declaration, known as the “Spirit of Speightstown”, that was prepared under the responsibility of the Government of Barbados (see SUNS #9436 dated 13 October 2021). THE BRIDGETOWN COVENANT – INTRODUCTION According to the Bridgetown Covenant (TD/L.435), nearly six decades ago, the international community came together in Geneva in the firm conviction that trade could make a difference to the world and do more to connect nations and peoples and enhance their economic opportunities. In a spirit of solidarity and cooperation, the world came together to ensure that progress achieved became prosperity shared. The phrase “prosperity for all” captured the ideals and objectives of the first session of the United Nations Conference on Trade and Development (UNCTAD), and its realization became the raison d’etre of UNCTAD and, subsequently, its creed. The serious challenges to multilateralism are being exacerbated. Strengthened multilateralism and coordinated international action are crucial for effectively addressing these challenges and improving prosperity for all. Inequality, within and between countries, exacerbated by vulnerability, has become one of the most challenging issues facing policymakers at the national and international levels. “Now, the Conference meets again, for the fifteenth time, in the most unprecedented of circumstances. In addition to climate change threats, we are experiencing a coronavirus disease (COVID-19) pandemic which has generated a global health and economic crisis, exacerbating fiscal as well as other challenges faced by developing countries. In this scenario, and faced with declining resources, it is paramount that member State engagement with UNCTAD be strengthened.” UNCTAD should contribute to the implementation of and follow-up to the outcomes of relevant global conferences, including the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda and, as appropriate, the Paris Agreement under the United Nations Framework Convention on Climate Change, among other relevant international agreements and outcomes, said the Covenant. While enhancing its work in support of addressing the trade and development challenges of all developing countries across all regions, UNCTAD should: (a) Strengthen its special focus on the trade and development needs of the least developed countries across all areas of its mandate, in accordance with the Programme of Action for the Least Developed Countries for the Decade 2011-2020 (Istanbul Programme of Action) and any relevant successor agreement reached at the Fifth United Nations Conference on the Least Developed Countries; (b) Continue to support Africa in addressing its special concerns and needs, including as articulated in the New Partnership for Africa’s Development, and in the implementation of the African Continental Free Trade Area; (c) Further address the special trade, investment and development needs of landlocked developing countries, including through continuation of its support for effective implementation of the Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014-2024 (Vienna Programme of Action); (d) Continue its work in assisting small island developing States to address persistent trade, investment and development challenges that they encounter, including through the implementation of the SIDS Accelerated Modalities of Action (SAMOA) Pathway; (e) Continue to give focus to the special needs and problems of structurally weak and vulnerable small economies in order to foster sustained economic growth and sustainable and inclusive development; (f) Continue to support the development efforts of middle-income countries, according to their needs, in facing specific challenges of sustainable economic development and poverty eradication. According to the Bridgetown Covenant, the year 2020 marked the start of the decade of action 2020-2030 to achieve the 2030 Agenda for Sustainable Development. However, the COVID-19 pandemic has exacerbated existing challenges and created new vulnerabilities, especially for developing countries, and threatens to reverse the hard-fought progress on the three dimensions of sustainable development – economic, social and environmental. “It is important to ensure a concerted global response, bearing in mind that the 2030 Agenda should serve as the blueprint to rebuild and to mitigate the impacts of the COVID-19 pandemic. Focused and sustained efforts to implement the 2030 Agenda for all, with a focus on the poorest and most vulnerable, are necessary for a strengthened and accelerated decade of action for building more sustainable, peaceful, just, equitable, prosperous, inclusive and resilient societies and economies.” The pandemic underscored the uneven resilience and capacities of countries to deal with crises. In response to the pandemic, many developing countries lacked the ability to use fiscal and monetary measures, among others, to respond to the crisis. It is imperative that international cooperation advance to combat and recover from the pandemic, provide assistance to countries and regions most in need. It is important to ensure timely, global and equitable access to safe, effective and affordable COVID-19 tools (vaccines, therapeutics, diagnostics and personal protective equipment), recognizing extensive COVID-19 immunization as a global public good to help overcome the COVID-19 pandemic worldwide and recover the momentum for sustainable development. Sharing of information and technology for the detection, prevention, treatment and control of the pandemic is necessary, as well as initiatives in this regard, such as the Access to COVID-19 Tools (ACT) Accelerator, Friends of the COVID-19 Vaccine Global Access (COVAX) Facility, the COVID-19 Technology Access Pool (C-TAP) and relevant pledging appeals, said the Covenant. “The speed at which the pandemic has spread has also been a reminder that this is an age of unprecedented interdependence and interconnectedness. Therefore, full global recovery will not be possible without global cooperation and until the pandemic subsides in all countries.” The Bridgetown Covenant said there is an urgent need to advance, with determination, bold and concerted actions to address the social and economic impacts of the COVID-19 pandemic, while striving to get back on track to achieve the Sustainable Development Goals. This will require designing recovery strategies that will accelerate progress towards the full implementation of the 2030 Agenda for Sustainable Development and the achievement of the long-term goals of the Paris Agreement, as well as helping to reduce the risk of future shocks. MAJOR GLOBAL CHALLENGES According to the Covenant, attempts to put the global economy back on track and accelerate the pace towards the timely accomplishment of the Sustainable Development Goals take place in the context of major global challenges that have become more acute since the fourteenth session of the Conference. These challenges include growing inequality and vulnerabilities, including high debt levels; accelerating climate change and continuing environmental degradation; and the widening digital divide. Accomplishing the 2030 Agenda and putting development back on track will require that all institutions and stakeholders in development play their mandated parts in the global effort to realize prosperity for all. In addressing these three challenges, UNCTAD should give account to a number of essential underlying issues for sustainable, inclusive and equitable growth and development, most notably: respect for human rights, including the right to development, gender equality, women’s and youth’s empowerment, and an overall commitment to just, non-discriminative and democratic societies based on the rule of law; good governance and enabling environment at all levels; continue its efforts to enhance its efficiency, effectiveness, transparency and accountability, including through effective results-based management and ensuring a member State-driven process through the intergovernmental machinery, and ensure effective employment of resources. The Covenant said high levels of inequality represent an obstacle to sustainable development and a major brake on sustainable economic growth and poverty reduction. The economic recovery requires evolving policies at all levels to tackle these issues. For decades, the wealth gap has been widening between and within countries. Even before the pandemic, nearly 700 million people remained in extreme poverty, with the indignity and vulnerability this implies. Billions of people have no access to modern technologies, including some that are now considered essential, such as access to the Internet. The impressive expansion of global trade, investment and technology registered over the past decades has unfortunately not resulted in benefits for all. “These inequalities have contributed to the fueling of discontent with globalization which, among other factors, threatens multilateralism, hindering the collective ability to achieve the 2030 Agenda and leave no one behind. The achievements made over the years in poverty reduction, a key goal and indispensable requirement for sustainable development, may be compromised in the face of the COVID-19 pandemic, and the development gap between and within countries is at risk of widening. Delivering on the 2030 Agenda requires doubling down on our efforts, including by boosting resources, private and public, and domestic and international.” According to the Bridgetown Covenant, effectively addressing the issue of debt vulnerability can help mobilize financial resources for development. As highlighted in multilateral forums, the accumulation of debt in developing countries has reached record high levels. This implies serious constraints on opportunities for inclusive and sustainable economic growth. Balancing the need to reduce debt vulnerability with the need to stimulate development, especially in a post-pandemic world, will be a key issue in ensuring inclusive and sustainable development. It is important to broaden and strengthen the participation of developing countries in the institutions of global governance. “Addressing vulnerability can promote inclusive and sustainable development. Inherent vulnerabilities limit the ability to respond effectively to external shocks, such as natural disasters, climate change and pandemics. Policies and strategies are needed to improve the resilience of the vulnerable and thereby support the achievement of the Sustainable Development Goals. To buttress economic and environmental resilience, the causes and effects of vulnerability need to be effectively addressed,” said the Covenant. Certain past and present production and consumption patterns that have proven to be unsustainable compromise prosperity. Decoupling economic growth from environmental degradation is crucial to ensure sustainable progress, as well as to reduce vulnerability. In this sense, concrete and coordinated actions, in line with the Paris Agreement under the United Nations Framework Convention on Climate Change, are required, as well as a meaningful outcome at the twenty-sixth Conference of the Parties this year. Digitalization has truly been transformative, significantly altering many aspects of modern life and being at the centre of a formidable economic transformation with vast opportunities, and changing what is consumed, produced and traded. But this also comes with challenges, such as the digital divide. Support is needed to ensure that the benefits of this transformation are shared by all in order to close economic and social gaps across the world. A proper utilization of digital technologies, backed by adequate infrastructure, can contribute to reducing gaps and inequalities in developing countries. True equality also requires consideration of the broader concept of digital inclusion, said the Covenant. TRANSFORMATIONS FOR A MORE RESILIENT, INCLUSIVE WORLD According to the Bridgetown Covenant, a recovery which brings the world back to the development paradigm that existed before the pandemic will be insufficient. Business-as-usual will not enable the world economy to recover from the pandemic and chart a path to ensure that all people can live in dignity, let alone keep development on track. Indeed, progress towards many Sustainable Development Goals was off track even before the pandemic struck. The crisis unearthed and accentuated existing vulnerabilities and weaknesses that need to be addressed. The Covenant said four major transformations are needed to move to a more resilient, digital and inclusive world of shared prosperity: transforming economies through diversification; fostering a more sustainable and more resilient economy; improving the way development is financed; and revitalizing multilateralism. It noted that since the fourteenth session of the United Nations Conference on Trade and Development, the global economy has faced a series of persistent and emerging challenges to ensuring stable economic growth as well as to achieving inclusive and sustainable development. These challenges include, among others, commodity dependence, increasing debt, growing energy demands, weak information and communications technology infrastructure, slow economic growth and the challenges of climate change, as well as challenges in transport and trade logistics due to geographical barriers. Building resilience to these challenges is critical to achieving inclusive sustainable development. The advances resulting from the needed economic transformations are necessary to reduce vulnerability to economic shocks and inequality across and within countries and require an enabling environment at all levels. From graduating from the least developed country category to escaping the middle-income trap, structural transformation matters. Particular attention should be paid to the most vulnerable countries, such as the least developed countries, landlocked developing countries and small island developing States. “Despite the impressive expansion of trade and the emergence of global value chains, most developing countries remain commodity dependent, and those in manufacturing or services remain tied to lower value added activities. Almost two thirds of developing and transition economies are commodity dependent, the majority of which are least developed countries, which are particularly vulnerable to volatile international commodity markets.” Non-reciprocal preferential market access conditions for the least developed countries, including those under the Generalized System of Preferences, are of key importance. Therefore, it is essential to ensure timely implementation of duty-free, quota-free market access on a lasting basis for all least developed countries to facilitate market access. The loss of access to a range of international support measures, including some significant trade-related special and differential treatment and exemptions, after graduating from the least developed country category calls for mitigating and support measures to ensure a smooth transition. In this regard, it is important to continue supporting these countries, commensurate with their needs and capacity constraints, to ensure their smooth transition after graduation, said the Covenant. The economic progress achieved in the last decades has been remarkable, yet the paradigm has been unsustainable. The past and ongoing overexploitation of resources and expansion of unsustainable economic activities are resulting in the degradation of habitats, the progressive loss of biodiversity, through accelerated extinction of plant and animal varieties and species, and the potential destruction of entire ecosystems. The progress achieved has been at a high cost, including a trail of greenhouse gas emissions causing the Earth’s climate to change at a frightening pace, compromising the progress achieved in the field of development and the opportunities for future generations to live in an environmentally safe and sustainable world. This situation presents a significant challenge regarding how to ensure an increase in prosperity without unsustainable production and consumption patterns. To ensure that prosperity for all is achieved and is sustainable, greater emphasis must be placed on decoupling economic growth from environmental degradation, in line with relevant conventions and international agreements. According to the Covenant, this transformation requires strong political will, as well as coordination and actions, involving the full participation of all relevant actors at all levels. To support such transformation, effective and sustainable approaches to trade, investment and technology policies and measures need to be developed and implemented, in line with relevant international rules. Financing development, from domestic and external public and private sources, is intricately linked to poverty eradication, an essential ingredient of inclusion and an overarching goal of the 2030 Agenda for Sustainable Development. Recovering more sustainably and resiliently from the current crisis depends on the world’s ability to effectively mobilize and deploy the needed financial resources and achieve progress on the Sustainable Development Goals. The pandemic has placed a great strain on Governments’ finances and their abilities to finance their countries’ development. Under the circumstances, and taking note of the high-level events on Financing for Development in the Era of COVID-19 and Beyond, advancing policy options on financing for development and accelerating the implementation of the Addis Ababa Action Agenda are therefore urgent, said the Covenant. The financing gap to achieve the Sustainable Development Goals and support long-term economic transformation can only be bridged through an effective mobilization and utilization of the different sources of finance. Official development assistance (ODA) is key and indispensable for achieving the Sustainable Development Goals. It is important that ODA providers reaffirm their respective ODA commitments, including the commitment by many developed countries to achieve the target of 0.7 per cent of ODA/gross national income (GNI) and 0.15 to 0.20 per cent of ODA/GNI to the least developed countries, as outlined in the Addis Ababa Action Agenda. South-South and triangular cooperation are important elements of international cooperation for development, as a complement, not a substitute, to North-South cooperation. It is important to strengthen such cooperation as a means of bringing relevant experience and expertise to bear in development cooperation and to enhance its development effectiveness. The world is interdependent and interconnected. Globalization has resulted in rapid change creating both challenges and opportunities. Tackling the common challenges facing humanity and harnessing opportunities requires collective action. Inclusive and development-oriented multilateral cooperation that considers local particularities is of central importance. In this regard, the constructive and cooperative approach to multilateralism based on the Charter of the United Nations and international law that benefits all and leaves no one behind, and avoiding actions that undermine that spirit, remains paramount. According to the Bridgetown Covenant, a strong multilateral trading system is more important now than ever as the world builds back from the economic impact of the COVID-19 pandemic. Trade is an important engine for inclusive economic growth, sustainable development and poverty reduction. An effective, rules-based multilateral trading system is fundamental to providing the stable and predictable rules that allow developing countries to integrate into the global economy and thereby allow cross-border trade to transform economies, unlock growth and reduce poverty. The fifteenth session of the Conference reaffirms its commitment to an open, transparent, inclusive, non-discriminatory, rules-based, multilateral trading system under the World Trade Organization. Trade liberalization, including through the accession to the World Trade Organization, and combating protectionism can play a significant role in integrating developing countries and countries with economies in transition, positively into the multilateral trading system as embodied by the World Trade Organization, especially when accompanied by balanced, appropriate supporting and sustainable policies at all levels, including in the context of national policy objectives. “The World Trade Organization is encouraged to maintain development at its centre, and continue to facilitate the removal of trade barriers, enhance the participation of all developing countries in international trade, including with provisions for special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements, with a view to ensure a level playing field for all. Acceding countries, particularly the least developed countries, also need technical assistance prior to, during and in the follow-up to the accession process.” It is vital that the world work to strengthen multilateralism and the rules-based, multilateral trading system, with an emphasis on ensuring that the system works effectively for developing countries and is a driver for inclusive and sustainable development, said the Covenant. UNCTAD IN A WORLD IN TRANSFORMATION According to the Bridgetown Covenant, UNCTAD plays an important role as the focal point of the United Nations for the integrated treatment of trade and development and interrelated issues in the areas of finance, investment, technology and sustainable development. In the implementation of and follow-up to the progress towards the Sustainable Development Goals and relevant outcomes of other major United Nations conferences, UNCTAD should continue to contribute by monitoring global, regional and national trends and policies that could affect, or foster, the ability of countries to build a fairer, more equitable, resilient, inclusive, just and sustainable world – a world of shared prosperity. In doing so, in accordance with its mandate and within available resources, the UNCTAD focus should be guided by its comparative advantage, differentiation and complementarity of its work with respect to other organizations, and through intergovernmental consensus, so as to put the organization’s strengths to the best use to address the needs and priorities of developing countries for sustainable development and strengthen their role in the global economy. The Covenant said as the world changes and responds to a new reality, and as the international community strives to effect the necessary transformations, so too must UNCTAD become a more agile organization that can adapt to the spirit of the times and better respond to the needs and orientations of member States. This includes building on the experiences and lessons learned during the COVID-19 pandemic. The role of UNCTAD as an important intergovernmental forum for consensus-building on trade and development therefore needs to be meaningfully reinvigorated. According to the Covenant, UNCTAD shall continue its analytical work through monitoring of global, regional and national trends and policies that cover all areas of its mandate. The importance of the research and analysis pillar of UNCTAD is underscored, in particular regarding policy recommendations to inform policymakers, and the other two pillars of work. It should continue being development-oriented, independent and grounded in solid evidence. UNCTAD should continue its work to support developing countries, through capacity-building and technical assistance. In consultations with the membership, a comprehensive and coherent technical cooperation strategy should be prepared by the secretariat, which will define the UNCTAD focus for future technical cooperation within its mandate. “UNCTAD technical cooperation should continue to assist developing countries and be adapted to the new opportunities and challenges in the fields of trade and development and interrelated issues. It should support countries in addressing the challenges exacerbated or revealed as a result of the COVID-19 pandemic and build resilience to future economic shocks, by building productive capacities, and support sustainable development.” The Covenant said that as the highest body of UNCTAD between conferences, the Trade and Development Board should strengthen its decision-making and policy function and its governance function. In doing so, the regular sessions of the Board should: (a) Ensure a robust consideration of the annual report prepared by the secretariat. The annual report should focus on the results achieved, assessed against the guidance provided by the quadrennial outcome and proposed programme plan and performance information, and with a clear set of indicators. It should also provide information on the implementation of intergovernmental decisions of UNCTAD, in particular those from the Trade and Development Board and the Working Party on the Programme Plan and Programme Performance. It should also include recommendations for potential adjustments and focus for future work, as well as on management and institutional matters, for the Board’s consideration; (b) Provide for an exchange on development issues of shared interest, spanning across the different areas of UNCTAD work. Individual UNCTAD reports will serve as the basis for the exchanges and consensus-building efforts across the agreed discussion topics; (c) Conduct policy dialogue and support intergovernmental consensus-building on substantive and strategic policy issues. According to the Bridgetown Covenant, in its programme of work, UNCTAD should support the least developed countries, landlocked developing countries, small island developing States, African countries, other structurally weak, vulnerable and small economies and countries in conflict and post-conflict situations, while also taking account of the challenges of middle-income countries and countries with economies in transition. UNCTAD should contribute to the coordinated international dialogue on COVID-19 response and recovery measures to counter the negative impact of the pandemic on the global economy and trade. “The Trade and Development Board will strive to ensure that the next quadrennial conference will also take stock of the work and accomplishments of UNCTAD over the preceding six decades, including through appropriate activities and initiatives, with a view to further ensuring that it will help deliver prosperity for all.” The Covenant said UNCTAD, as the focal point within the United Nations system for the integrated treatment of trade and development and interrelated issues in the areas of finance, technology, investment and sustainable development, should continue its work through the three pillars, building on the Nairobi Maafikiano and based on the preceding policy analysis of the Bridgetown Covenant. (The full text of the Bridgetown Covenant can be accessed at: https://unctad.org/system/files/official-document/td-l-435_en.pdf]
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