UNCTAD has special responsibility for South

New Delhi, 21 July -- There should be no repetition of what took place at the beginning of the Uruguay Round of multilateral trade negotiations, when, because of lack of preparation, developing countries were unprepared to deal with Intellectual Property Rights, Services and other new issues, the Secretary-General of the UN Conference on Trade and Development, Mr. Rubens Ricupero, warned here.
Ricupero gave this warning in his closing remarks to the Asian Symposium on "International Investment Arrangements and their Implications for Developing Countries."

At the time of the Uruguay Round, "we were at a clear disadvantage [compared] to our OECD colleagues who had spent years preparing for the negotiations," said Mr. Ricupero who came in as the Brazilian ambassador to GATT and UN organizations in Geneva, after the launch of the negotiations in 1986, and the preparatory processes for it.

Ricupero said that UNCTAD was not trying to advocate a specific kind of position in terms of negotiations or a certain kind of agreement on investment.

UNCTAD, he said, has always been committed to promote the interests of developing countries. In addition to the organisation's work on developing "development-friendliness criteria for investment frameworks", there should be assistance for developing countries, especially the least developed countries among them, as well as economies in transition, to help them integrate fully into the global economy.

In assisting developing countries to prepare their trade and investment strategy, he highlighted the need for countries to fully understand the relevant issues and "never allow to happen what took place at the beginning of the Uruguay Round".

"Developing countries," Ricupero said, "need to know the issues and concepts clearly and well before any negotiations, and whether to have new negotiations at all on investment.

"And I am not pre-judging any decision," he added.

Developing countries need to know all the complex network of issues.

"Many people mistakenly believe that multilateral rules on investment are about the enlargement of bilateral investment agreements (BITs). This is not so. Multilateral rules are very different in nature and scope."

Ricupero went on to cite a few examples.

On the definition and scope of investment, he asked whether FDI that is a stabilising factor should be treated the same way as portfolio or short-term investments, or IPRs which are different and require different rules.

Ricupero also raised the question of how to deal with right of entry or provide for most-favoured nation treatment, financial clauses on repatriation of profits and transfer of technology.

On these points, some participants said privately that Ricupero obviously had in mind the OECD's Multilateral Agreement on Investment (MAI), which covered all these issues.

Given the structure of the Symposium and the presentation of the status of the OCED negotiations by Swiss negotiator, Ambassador Marino Baldi, during the first session, it was not surprising that references were regularly made to the draft MAI.

Due to differences among the OCED countries themselves and widespread public and parliamentarian protests in a number of OECD countries, the MAI negotiations have been suspended for six months until October.

The two-day discussions at the New Delhi symposium veered between responses to the specifics of the MAI and attempts by developing country-participants to question the need for any international investment agreement and their efforts to understand more fully the implications of specific concepts and approaches.

Ricupero reiterated that UNCTAD needs to "further our analysis and research and understanding" in order to provide good services to developing countries. He said that in many areas on FDI, empirical evidence was still lacking; an open mind was called for and one could not be naive to say FDI is good per se in any circumstance or take the fundamentalist and defensive attitude.

"Like cholestoral, we need to maximise the good and minimise the bad," he said, but admitted that sometimes UNCTAD ended up by being criticised by both sides.
During a lunch-time address on the first day of the Symposium, Mr. Ricupero said that some parties wished to see UNCTAD behave like a missionary for the gospel of globalisation and liberalisation while others said that UNCTAD was "massaging" developing countries to accept the OECD MAI.

The remarks about "massaging" developing countries to accept the OECD-MAI appeared to be with reference to the criticisms of public interest development non-governmental organizations at a recent UNCTAD-NGO consultation in Geneva.
The UNCTAD chief said his organisation tries to be a moderate voice and "to interpret interests of developing countries as we see it".

"Two years ago, I said that there was no point in taking a stand for or against a MAI without knowing its content. There is no reason to be against an agreement that is development friendly and meet the aspirations of developing countries," he said.
Ricupero also said that UNCTAD would try to contribute to the formulation of national positions by developing countries that will achieve such an agreement.

He added that UNCTAD's mandate is also from industrialised countries and he hoped that the organisation can work on the basis of a shared perception of mutuality of interests in promoting development. (TWN)