(Geneva, 3 May 2010)

Mr. Chairman, H.E. Mr. Arturo Hernández Basave,
Deputy Permanente Representative of Mexico,
Mr. Supachai Panitchpakdi, Secretary-General of UNCTAD,
Distinguished Colleagues,

I am honoured to make this statement on behalf of the Group of 77 and China.

I wish at the outset to congratulate Ambassador Hernández Basave for assuming the chairmanship at this second session of the Trade and Development Commission, and express the assurance that, under his intelligent guidance, this meeting will achieve a very successful outcome. 

Mr. Chairman

1.         When we see the rules on trade as we analyze the economic situation in most developing countries, the thought that something is wrong is completely evident.

2.         What we said, on behalf of the Group of 77 and China in the Commission on Investment is also very pertinent to this meeting, because to foster trade in our countries, we need predictable and well focused investment flows.

3.         A process of inclusive development that is socially, economically and environmentally friendly in all countries is necessary to contribute to addressing the ‘developmental crisis’, as underlined by the June 2009 UN Conference on the World Financial and Economic crisis.

4.         To move towards this goal, an integrated and development-oriented strategy of structural transformation in developing countries must be taken into account, and should include, inter alia, strengthening productive capacities and competitiveness; diversifying markets; improving market access; rejecting protectionism; strengthening trade and trade-related policy, fomenting  regulatory and institutional frameworks; providing trade finance; enhancing R&D and technology. All those things have to be achieved supporting multilateralism and inclusiveness; and enhancing systemic coherence among trade, financial and monetary issues as well as reforming the world financial system. In other words, we need to build a fairer and development oriented international economic system.

5.         In the case of LDCs, it is critical to urgently generate policies and strategies to enhance their economic performance. Trade has a major contribution to make in this regard seeing that exports accounted for almost 29% of Gross Domestic Product of LDCs in 2008.  Additionally to that, as mentioned before, new generation of trade and related policies affecting industrial, agricultural, services, investment and technological development has to be agreed with the consensus of the international community.

6.         Among other important issues, transport and trade facilitation infrastructure have to be improved in developing countries to permit a larger volume of goods and services to be traded competitively, putting emphasis in those countries with more insufficient capacities and in the land-locked and transit developing countries.

7.         The Official Development Aid remains essential, especially for developing countries with limited domestic resources.  Both the quantity and quality of ODA should be significantly improved. We would like to reiterate that ODA and Aid for Trade are concepts and initiatives clearly separate and distinct from each other.  Funding or implementing one cannot go in detriment of the other.  On the contrary, both should be realized taking into account the specific needs and demands of recipient countries, and creating on the ground positive, mutually beneficial synergies, including their spill-over effects into other social and economic activities. 

Mr. Chairman

8.         We believe that the dynamism of the global economy has to be reflected in the dynamism of today's ideas on development. We cannot maintain old paradigms, and refrain from generating new ideas relevant to today's realities, and reflecting the current needs and priorities of developing countries.  Failure to think courageously and ahead of the curve will not lead us anywhere, and will prevent us from arriving at more effective and relevant models for getting an equitable and developmental international economic system.

9.         In all debates on trade and related issues it is important to underline that there is no one-size-fits-all approach. Each country, depending on its capabilities, will develop unique approaches to promote trade and development. That is why developing countries need policy flexibility and policy space to address their specific constraints and development problems.

10.       Globalization and liberalization without adequate and effective regulation at the national and international levels and without attention to development concerns can lead to detrimental effects on the financial and real economies, as well as on peoples' lives and on the environment. Globalization, thus, needs to be harnessed proactively to promote development.  This effort must include the meaningful and full participation of developing countries in international economic decision-making and norm-setting.

11.       The various recommendations of all expert meetings merit further reflection, and those which resonate most with member states deserve further follow-up and implementation.

12.       The Commission will address two topical themes, namely, successful trade and development strategies for mitigating the impact of the global economic and financial crisis, and the contribution of tourism to trade and development. The themes are interrelated in that a successful strategy to build economic resilience in developing countries includes developing the tourism sector. 

13.       The secretariat’s background reports for these two themes provide interesting analyses of the key issues to be tackled in strengthening the contribution of trade to development in the post-crisis period. While the Group appreciates the secretariat's paper, it would have appreciated a broader treatment of the issue, includes concrete suggestions and ideas to address the policy implications of the crisis, including how the crisis has underscored the need to address problems which have persisted for decades, if not more.

14.       We say again what we underscored last week, regarding the role of the state. The role of an enabling and developmental State in fostering economic growth and development is basic. But developing countries states need to be endowed with the adequate support from the international community.

15.       For most of the members of the Group, migration and remittances are important components of national income, family’s earnings and can play a relevant role in national economic growth.  However the current economic crisis has resulted in significant increases in unemployment and continues to adversely affect migrant workers. The flow of remittances, which represent one of the largest sources of external private finance for developing countries are projected to significantly decrease in 2010 due to the crisis. There is therefore a very pressing need to identify ways to realize the full potential of migrants and their impact on trade and development.

16.       With the crisis, signs of economic protectionism emerged as pressure mounted to protect crisis-hit domestic industries and jobs including by way of introducing new non-tariff measures; re-introduction of agricultural export subsidies; elements in the stimulus packages favouring domestic goods and services at the expense of imports, etc. New and less transparent forms of protectionism could spread in the near future, and they could constitute new barriers to the developing countries trade.

Mr.  Chairman

17.       The inventory of problems to be resolved by developing countries related to this Commission and to promote sustainable productive capacity for trade and development are very wide.

18.      We need to find specific and actionable measures and initiatives in some areas. For example: 

(a)        How can we foster proactive industrial strategies in the short term to diversify developing countries trading capacities?
(b)       What can we do to expand agricultural production, at least to reduce hunger and rural poverty as a first step; building food security and promoting agriculture development as a just aspiration?
(c)        How can developing countries increase their services supplies at national and international markets as a high value complement of goods trade?
(d)       Which is the shortest road to promote long-term competitiveness, including higher price export-oriented productions?; and
(e)        What can we do to strengthen investment into infrastructure if there are not national funds and foreign investors are not interested to do that?

Mr. Chairman

19.       We have to answer those and more questions and urgently implement policies to allow us to conduct our economies through a growth path of no return.

20.       We do not expect to accomplish all of this in this Commission, but we want to say, once again, that this Commission, as well as Investment Commission, has the highest priority to our Group, and want to emphasize that we do not conceive UNCTAD without a progressive and enhanced activity of these two Commissions.

Thank you very much.