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DEVELOPMENT: UNCTAD Meet Could Put Troubled Trade Talks on Track

Gustavo Capdevila

GENEVA, May 17 2004 (IPS) - The 11th sessions of the United Nations Conference on Trade and Development (UNCTAD), to take place next month in Sao Paulo, will be a political event that could help get international trade talks back on track says the conference’s secretary-general Rubens Ricupero.

The negotiations of the Doha Round, launched in November 2001 in the Qatari capital, are being promoted by the World Trade Organisation (WTO) to liberalise world trade and encourage development. The organisation’s ministers set a deadline of Jan. 1, 2005 to wrap up the talks.

But the course of the negotiations has come practically to a standstill because of the failure to meet the intermediate deadlines set by the WTO members and especially because of the debacle in September 2003 at the ministerial conference held in the Mexican resort of Cancún.

The tensions mostly revolve around the liberalisation of agricultural trade, and particularly the market access of farm products, which the industrialised countries limit with their high import tariffs – and developing countries aim to eliminate or at least cut drastically.

The stagnation of the talks is one of the key elements of the economic context in which the UNCTAD sessions will take place Jun. 13-18. Other ingredients include the growth of the global economy and the increase of trade in both volume and monetary terms, said Ricupero.

The 147 WTO member states have until the end of July to finalise agreements towards progress on the farm trade talks and the other Doha Round issues, such as trade in services, industrial tariffs, implementation of pending agreements, and special and differentiated treatment for developing countries.

But if the talks remain bogged down in disagreement, as seems to be indicated by the informal consultations made in recent weeks in London and Paris, the UNCTAD session will be an opportunity to reinvigorate the negotiation process, said the institution’s leader.

Representatives from all of the U.N. countries, including non-WTO members – like Russia, Iran, Saudi Arabia and Algeria – will take part in the Sao Paulo meeting, which will also be the U.N.’s only economic conference this year.

The lack of movement in trade talks is not limited to the multilateral efforts of the WTO, but is also evident in regional and bilateral attempts at trade agreements, Ricupero told a press conference.

Currently, the planned Free Trade Area of the Americas (FTAA), which is to involve all the countries of the western hemisphere except Cuba, suffers the same problem of failing to define terms of consensus for fruitful negotiations, he said.

Things are moving with great difficulty in the FTAA. There is a tendency towards fragmentation and no one knows what will come of it, said the UNCTAD chief, himself a career diplomat and Brazilian citizen.

On another front, a bilateral "understanding", the free trade agreement between the United States and Australia, has produced few concrete achievements when it comes to opening their markets, he said.

The paradox is that the decline of multilateral, regional and bilateral negotiations coincides with a strong recovery of the global economy and of trade, following the contraction begun in 2001.

In 2003, world trade grew 4.7 percent, and this year, each new estimate forecasts more growth, Ricupero said.

The Organisation of Economic Cooperation and Development (OECD), whose membership includes all industrialised countries, predicted last week that world trade would expand 8.6 percent this year, and in 2005 reach 10.2 percent.

There is strong growth in trade volumes, approaching the record year of 2000, when overall expansion was around 13 percent.

"As far as the economy, the forecasts are similar. As such, one cannot blame the lack of dynamic in the negotiations on the stagnation of trade," said Ricupero.

And trade is not increasing only in volume. With the rise in petroleum prices and the recovery of some commodities, trade is going to grow much more in monetary terms because the dollar prices will see a sharp rise, he predicted.

The same equation of booming economy and trade on the one hand and paralysed multilateral negotiations on the other was seen in December 1999, in the resounding failure of the WTO ministerial conference in the U.S. city of Seattle.

Ricupero’s interpretation of this situation is that the problems afflicting trade talks are more political than economic and are very closely related to the political moment.

The UNCTAD sessions in Sao Paulo is a political event that could help the world’s nations overcome the stagnation of trade talks, he said.

UNCTAD was founded in Geneva in 1964 as a permanent body of the U.N. General Assembly entrusted with matters related to trade, investment, finance and development.