By Mario Osava
SAO PAULO, Jun 14 2004 (IPS)

Coherence is the theme of this meeting, and ”countries which press others to liberalise trade should be willing to do the same themselves,” said U.N. Secretary-General Kofi Annan as he officially inaugurated the eleventh ministerial sessions of the United Nations Conference on Trade and Development here Monday.

”If they don’t, we politely call it lack of coherence; but we could just as accurately call it discrimination,” Annan said.

”Consider the African farmer, eager to take advantage of duty-free access to global markets, only to find her competitive advantage nullified by sophisticated packaging regulations, or by subsidies paid to competitors in wealthier countries,” he added.

Demands for a more just and balanced international trade system marked the opening statements of UNCTAD XI, in which the institution is celebrating 40 years of existence.

But Brazil’s President Luiz Inacio Lula da Silva noted that overcoming the enormous inequalities in the world ”cannot rely only on trade.”

What is needed, said the conference host, are a “financial architecture that sustains changes” and public investment, which has been underestimated by “mistaken recipes” for development that have led to additional sacrifices in poor countries.

Over the past 40 years, annual per capita income in the richest countries rose from 11,400 to 32,400 dollars, while in the poorest countries the increase was only from 212 to 267 dollars, he noted.

The situation will only get worse if current trends remain unchanged. In the past five years, 23 developing countries saw their economies decline, 55 grew less than two percent a year, and only 16 achieved growth of more than three percent annually, said the Brazilian president, a former metalworker and founder of the governing leftist Workers Party (PT).

Development ”does not automatically occur nor will it be the spontaneous result of market forces,” and it will not be ”a gift from the international community,” he said, and urged developing countries to remain united and persistent in negotiating for change.

As for trade, Lula confirmed Brazil’s willingness to take part in “pragmatic and mutually respectful negotiations” that take into account the needs of developing countries, especially the poorest.

He praised UNCTAD for its ”economic vision that has not lost its social sense” and defended the reactivation of the Global System of Trade Preferences (GSTP), a trade barrier reduction scheme exclusive to developing countries, saying it will build “a new global trade geography.”

Lula said he hopes another 40 countries will join the GSTP already signed by 44 nations.

The Brazilian leader went on to propose the creation of an international policy centre for financing development, and suggested it be named for fellow Brazilian Celso Furtado, an economist who was lauded in the UNCTAD XI inaugural addresses for his theoretical and practical contributions to the development arena.

It would be ”a centre for disseminating innovative projects and policies for combating hunger, poverty, and bottlenecks in development,” contributing to a new globalisation agenda, Lula explained.

”Globalisation is not synonymous with development, it is not a substitute for development, but it can be used as an instrument for development.”

He also invited world leaders to a meeting in New York on Sep. 20 with the aim of defining mechanisms for a fund to fight hunger and poverty, an initiative Lula himself launched, and backed by India and South Africa.

The world’s trade imbalances were condemned in Monday’s speeches, particularly in the address by Prime Minister Thaksin Shinawatra, of Thailand, which hosted UNCTAD X in 2000.

The industrialised countries have been “slow” in attending to what the developing world needs most, which is the elimination of agricultural subsidies and barriers, he said.

Julian Hunte, chair of the 58th U.N. General Assembly and foreign minister of Santa Lucia, said that reality has belied the premise that globalisation and free trade will bring prosperity to all.

Today many developing countries continue to suffer economic and social problems while many others, mostly in the industrialised world, ”sail in an ocean of prosperity,” said Hunte.

He demanded special and differentiated treatment for “small, open and vulnerable economies,” like his own, a tiny Caribbean island nation, and for those considered “least developed countries.”

An agreement at the World Trade Organisation (WTO) cannot create new imbalances on the one side and seek to create balance on the other, said the Santa Lucia diplomat.

Hunte noted that 50 developing countries rely on two or three exportable commodities and 39 are dependent on just one raw product, which is why there is an urgent need to seek solutions for trade with fairer prices.

Thailand’s Shinawatra said trade and South-South cooperation hold great potential, as is already evident in Asia. But it is largely unknown territory and there are no guarantees that such agreements would work better than North-South cooperation, he warned.

Multilateralism still offers the best hope for all, and that is why negotiation of the WTO’s Doha Round must go forward, he said.

U.N. chief Annan seemed to agree, saying: ”what we need now is a successful conclusion to the Doha negotiations (begun at the WTO ministerial meet in the Qatari capital in 2001). It is increasingly clear that this can be achieved only if developing countries are granted full access to the markets of the industrialised world, and if agricultural and other subsidies that distort world markets are dramatically reduced or eliminated.”

”Such an outcome would strike a blow not only for coherence, but for development and justice, too,” he said.

”If developing countries agree to reduce the average tariffs applied to each other by 50 percent (under the GSTP), this would generate an additional 15.5 billion dollars in trade. This is not an alternative, but a complement to the multilateral liberalisation process,” Annan said.

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