Nassir Abdulaziz Al-Nasser
Permanent Representative of
the State of Qatar
to the United Nations
Chairman of the
Group of 77 in New York
Doha , 6 December 2004
It gives me great pleasure to present to this Plenary the results of our fruitful discussions in the two workshops focusing on trade and investment. As you recall, one of the objective of this Forum was to identify key issues, draw conclusions and define possible recommendations in these two areas, which are so important for development and for attaining Millennium Development Goals, particularly to halve poverty by the year 2015. The stated objective was to come out, to the greatest extent possible, with action-oriented conclusions and recommendations that will serve as a substantive contribution to the preparations of the South Summit to be held in Doha, Qatar in 2005.
Outcome of the Workshop on Trade
The Workshop on Trade discussed and resolved to implement strategic actions to consolidate, strengthen and deepen South-South trade. It was considered that galvanizing South-South trade was timely against the backdrop of a new geography of trade and economic relations in which the South is making important contributions.
Highly motivating, forward-looking and practical presentations were made by a number of eminent panelists. Their presentations were followed by rich and in-depth debate.
Three interconnecting issues were addressed, namely (1) strengthening developing countries’ capacity for trade negotiations, (2) networking among regional integration groupings, and (3) enhancing South-South cooperation and trade, especially in commodities.
The following conclusions and recommendations were highlighted by the participants:
- Trade policy is a key instrument available to developing countries in promoting development. It must be used strategically in the context of liberalization in the South-South trade and at the multilateral level. South-South consultations and exchanges of experiences on these issues should be reinforced. This could be one element of contributing to the implementation of the MDGs. In this context, the development issue should be placed in the top of the UN agenda.
- Development of necessary capacities to negotiate trade agreements, to comply with and implement them, and to take advantage of them through increased production, competitiveness and exports in manufactures, commodities and services. Central to trade negotiations is the need to promote a development-friendly system of rules and opportunities, especially at the multilateral level in the current Doha round of negotiations under the WTO and factor in the cost of implementation.
- Equally important is the need for sustained solidarity and partnerships, including on accession to the WTO, which need to be made more equitable and just, reflecting the development status of developing countries and without political conditionalities. Any unilateral coercive measures by developed countries that militate against the trade and development interests of developing countries should be opposed by developing countries. Appropriate consultative South-South mechanisms to foster cooperation on these issues need to be put in place.
- Addressing process related issues in trade negotiations, especially at the multilateral level, to bring about greater transparency and inclusiveness in decision-making, is also important. This has and continues to be a collective agenda of the South, in seeking better access and better terms of engagement.
- Essential aspects of capacity building include multi-stakeholder consultations at the national level. It also includes investment into human development, as a means of promoting trade and development, as well as peace and stability.
- South-South trade in commodities, including in strategic resources, is poised for a change. Transforming the commodity problematique into an engine for development will need enhanced market access and entry conditions, improved cooperation and capacities of national enterprises, regional cooperation, and trade financing. An Action Group on South-South Commodities’ trade in the context of the International Task Force on Commodities could be created.
- Strengthening regional trade and integration agreements of the South requires proper pacing and sequencing of internal and external liberalization. Key issue for developing countries involved in North-South arrangements is cooperation in ensuring a development interface between these arrangements and the multilateral trading system. A network of integration agreements can be constituted to foster exchanges of experiences and information among different groups and regions. Also, initiatives such as the Asia-Africa Sub-regional Organization (AASROC) could serve as examples of South-South cooperation.
- Inter-regional trade has an important potential that remains to be fully realized. The scope to do so has improved substantially. The Global System of Trade Preferences among Developing Countries (GSTP) is a key instrument that can bring new dynamism to such trade and thus developing countries need to actively participate in the third round of negotiations that has been launched so as to make a significant impact on South-South trade.
- Exploiting complementarities in South-South services trade can offer important trade and investment opportunities. Actions need to be taken to build up South-South trade in services through closer cooperation at the bilateral, regional and interregional levels in services sectors with high growth potential, including on the movement of natural persons.
- Trade infrastructure and trade facilitating measures are necessary for export competitiveness and for reducing transaction costs on trade of developing countries. There is need to invest into improving infrastructure facilities and network among developing countries, to reduce the cost of doing business, and to enhance trade facilitating services.
- Capacity building is important in developing and strengthening institutions that can help countries meet international technical standards and sanitary and phytosanitary measures for manufactures and agricultural products. Developing mutual recognition agreements on standards is also needed to facilitate trade. Support should be provided to the Consultative Task Force on Environmental Requirements and Market Access for Developing Countries.
- The Network of export-import banks of the South just launched at UNCTAD XI to provide financing needs of South-South trade should be supported and consolidated.
- Developing countries should seek representation at the Bank of International Settlements through the creation of an "Emerging Markets Committee" so their interests are considered and take into account in the setting of international banking and financial standards.
- The debt trap in which many developing countries are caught has obliged them to use limited resources to finance debt re-payments and this, in turn, prevents them from financing trade, production, infrastructure and capacity building activities for development. The situation has been aggravated by the failure of OCED countries to meet the target set of extending 0.7 per cent of their GDP as development assistance. The international community should urgently meet this commitment, make available needed financial resources for development, and promote durable solutions to addressing the external indebtedness of developing countries including debt cancellation. Work on trade, debt and finance in the WTO launched at Doha should also be expedited.
- Technical cooperation among developing countries (TCDC) should be enhanced through tripartite mechanism involving donor countries or regional financial institutions, in promoting South-South cooperation.
- The North remains an important partner for developing countries. It needs to adopt policies and measures to facilitate South-South trade and trade generally of developing countries. These include improving market access conditions, removing market entry barriers, avoiding trading distorting practices such as in agriculture, and providing additional trade and development assistance.
- The G77 is an important forum for follow-up on South-South cooperation. It must continue to consolidate its solidarity and cohesiveness in trade and trade negotiations. It should consider conducting an annual review of practical initiatives in promoting South-South trade to take stock of progress and provide continued follow-up to decisions taken. UNCTAD is a key partner of the G77. It should increase support for the G77 in promoting South-South trade on a more sustained basis, including in conducting annual reviews on follow-up to recommendations adopted. Other relevant international organizations such as UNDP could also contribute in supporting economic cooperation among developing countries. The important contribution of IFAD in the area of rural and agricultural development as well as its efforts to enhance small holder farmers to have better access to markets was recognized. Support should also be provided to the South Centre that is in a position to make valuable contribution to the capacity building of developing countries in trade negotiations.
The forum addressed the issue of investment with special focus on South-South investment flows. It was noted that the growing importance of the South in the global economy is not confined to trade relations only but covers investment as well. In terms of global investment flows, the share of outward investment from developing countries may not appear large but the emerging trend is clear and encouraging. There has been dramatic increase in outward investment from developing countries in recent years most of it going to other developing countries.
This morning, we were also informed about the important role played by investment promotion agencies (IPAs) in attracting investment and the challenges that IPAs in developing countries face in undertaking promotional activities. The discussion this morning also highlighted the possible impact of FDI and the role of policies in enhancing the positive impacts of FDI. In order to continue to strengthen the new and positive trend in South-South investment flows, developing countries need to strengthen their cooperation including through bilateral and regional investment agreements.
A wide range of specific issues were raised in the course of the discussion but I wish to draw your attention to a few that have emerged as critical. These include:
- The need for better understanding of the scale, potential and opportunities for outward investment from developing countries, in particular South-South investment.
- Increasing opportunities for South-South international investment policy setting, more specifically through bilateral and regional agreements, and for exchange of views and the sharing of experiences, including from existing regional investment agreements in the South, and in areas such as corporate developmental responsibility.
- Explore ways in which the risks and constraints associated with outward investment among developing countries, in particular investment flows to the least developed countries, from other developing countries can be mitigated.
- Enhancing capacity-building activities through regional training workshops on best practices in investment policy framework and investment promotion and targeting and by strengthening investment promotion agencies. In this respect, LDCs require special attention.
- Conduct investment policy analyses with a view to identifying and developing policy options and regulatory framework appropriate to attracting FDI and benefiting from it, especially in the South-South context.
- The importance of not only attracting but also benefiting from FDI, including through the development of linkages between foreign affiliates and domestic firms with the view to strengthening domestic enterprise sector.
- The development of common denominators in international investment rule making that are development-friendly and that could be as models for bilateral and regional investment negotiations.
- The need to improve on the capacity to collect and analyze statistics on investment flows.
- Issues related to investment that require special attention include corporate governance, accounting standards, the development of capital markets and the implications of and the active involvement of developing countries in Basel II.
- Promoting transfer of technology among developing countries as well as strengthening coordination among them in the area of transfer of technology and intellectual property rights within the context of the WTO and WIPO agreements. In this context, the Forum support the role being played by some Southern institutions dealing with science and technology, specially the Third World Academy of Sciences ( Trieste)
- The Forum highlighted the importance of UNDP initiative to establish a regional centre on e-Government and e-Governance that will serve as a knowledge centre.
- The Forum stressed the importance of the role of the Special Unit for South-South Cooperation as the focal point within the UN system for South-South Cooperation and requested the Unit to take steps to develop general guidelines on intra-South private sector collaboration, and facilitate the establishment of economically viable public-private partnership and market-driven mechanisms to accelerate exchange of business collaboration, joint venture and technology exchange opportunities among the developing countries. In this context, it requests the Special Unit to undertake the publishing of the first edition of the report on South-South Cooperation on the occasion of the Second South Summit as decided by the first South Summit in Havana.
- The Forum acknowledges the increasing emphasis placed by UNDP in the implementation of the MDGs, especially on poverty eradication and development issues.
- The Forum acknowledges the importance of IFAD in the area of rural and agricultural development as well as its efforts to enhance small holders agriculture and farmers access to markets.
- The Forum stresses the importance of the South-South project on Intellectual Property Rights and Access to HIV/AIDS and malaria Drugs.
- The Forum acknowledges the valuable contribution made by UN relevant institutions through the research and policy analysis on key development issues, including trade and investment.
- The Forum, on the light of the substantive preparations for the Second South Summit, invites the troika of the Group of 77 to consider the best modalities for the implementation and follow up of the Forum's recommendations.
These are just the most salient features arising from our discussions. For the purpose of my report to the Plenary I had no choice but to be as selective as possible. Our colleagues and friends from the UNCTAD secretariat will produce a more extensive report covering in greater details the richness of our debate.