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Statements in International Organisations


UNCTAD - Commission on Trade in Good And Services, and Commodities (Geneva, 7 - 8 February 2008)

Statement by Mr Dimitrij Grčar, Ministry of Economy of the Republic of Slovenia, and Mr Jorge Vitorino, European Commission, on behalf of the European Union

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I. Introductory And General Remarks

I have the honour of taking the floor on behalf of the European Union. The Candidate Countries Turkey, Croatia* and the former Yugoslav Republic of Macedonia , the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Montenegro, Serbia, as well as the Republic of Moldova, Armenia and Georgia align themselves with this declaration.

I congratulate you, Chairman, and the members of the Bureau on your election. I wish you every success in carrying out your duties and responsibilities. The European Union assures you of its support throughout the session. We hope that our efforts at this meeting will lead to substantive inputs to the ongoing deliberations in the context of UNCTAD XII, helping us to reach consensus on a relevant and clear mandate and work programme for the next four years.

In our view, the main purpose today and tomorrow is to take stock of the work accomplished under the auspices of this Commission over the last year and indeed since the last Conference, and to have an exchange of views on the trade perspective of globalization and its contribution to development, based on the secretariat's background note. A good substantive discussion could help clarify a number of issues and questions of importance to the future priorities of this organization. However, we should not prejudge the outcome of the upcoming ministerial conference with any forward-looking decisions on the work within this and other Commissions or regarding the topics of expert meetings. Any relevant new insights can and should at this point be brought into the UNCTAD XII PrepCom process.

II. Item 3: Globalization's contribution to development: the trade perspective and UNCTAD's contribution

Mr Chairman,

With respect to agenda item 3, the topics addressed in the secretariat's background note (TD/B/COM.1/90) are significant, both for developing as well as developed nations. We would have preferred that the note be less general and repetitive of the discussions elsewhere. Nevertheless, it is a relevant basis for our deliberations on the state of international trade and UNCTAD's contribution in this area. The EU would, nevertheless, like to comment on a number of points, as well as highlight some EU policies and priorities in the field of trade and development.

The pace of change in the world economy, technological developments and the rise of emerging economies bring new opportunities, as well as challenges, for developing countries seeking sustained growth through trade and investment. As companies respond to these changes, supply and production chains are becoming increasingly global and complex. One implication is the need for a new trade policy. For the multilateral trading system to work effectively in the 21st century, we will increasingly need to look beyond tariff reduction to the trade barriers that lie behind borders.

That being said, tariffs remain an important issue, in particular in South-South trade.

The report of the expert meeting on the participation of developing countries in new and dynamic sectors of world trade (TD/B/COM.1/EM.34/3), which I will comment on separately, notes that over 70 per cent of tariffs faced by developing countries were imposed by other developing countries. Such findings clearly make the case for a more ambitious level of tariff liberalisation in the DDA.

Mr. Chairman,

The EU welcomes the recognition in the secretariat's note of the value of the multilateral trading system and the WTO as central pillars of international governance. The EU has traditionally given priority to multilateralism in international trade. It continues to do so  for a number of reasons, including the potential for much bigger and more broadly shared economic gains through a multiplier effect, the ability for all countries to defend their interests and because multilateral market opening and rules are binding and enforceable, giving greater predictability and stability to trade and reducing the risk of policy reversal. We still firmly believe that the largest contribution to development through trade lies in an ambitious and balanced outcome of the Doha Round, which creates new trading opportunities for developing countries, in particular the most vulnerable. A successful Round, not only on Agriculture and NAMA but also Services, Rules, Trade Facilitation, Geographical Indications, and Trade and Environment, is a crucial instrument to foster development and reinforce the multilateral trading system. With the upcoming revised Chair's papers on agriculture and NAMA, we will need intensified discussions in a horizontal process where a balance can be tested across the various issues at stake.  If this process proves successful, then we could see ministerial negotiations happening before UNCTAD XII. In our view, a breakthrough in the next months and a realistic prospect of concluding the Round by the end of 2008 would be the best message to bring to Accra.

That said, the EU has, as a parallel track of its trade policy and part of its "Global Europe" initiative, launched a new generation of carefully chosen bilateral free trade agreements and has made progress on a number of Economic Partnership Agreements with the ACP countries. These initiatives fit with our multilateral commitment, enabling those partners who want to move further to build on WTO rules and expand international cooperation in new important areas such as investment, services, competition and government procurement. In this connection, we support another claim of the note before us that many developing countries, especially in Africa and LDCs, still need to tap the potential of the services sector for development. We also agree that continued efforts are needed to ensure fair competition and to control anticompetitive practices.

Mr Chairman,

the text also elaborates on a number of "new realities and persistent challenges", such as energy, climate change, environmental measures, private voluntary standards, labour mobility and migration. These are important issues for development, however, they are already addressed in other fora. Any role of UNCTAD with respect to these new issues will be subject to consensual agreement by the membership, based upon further discussions in the UNCTAD XII negotiation process. Similarly, the list of priority areas for UNCTAD's work contained in paragraph 71 of the note can at this stage be considered only as suggestions by the secretariat. In the PrepComs, the EU has made it clear that UNCTAD will need to prioritize and pursue a clearer division of labour and stronger cooperation with the rest of the UN system and other international organisations. While we agree on the need to shield UNCTAD from wasteful "mandate creep" from other bodies, we understand this principle to apply in both directions.

As argued in the report, many developing countries will require assistance and policy advice to cope with new trade and development challenges, in particular, for example, to design policies that will harness the windfall gains from the current commodity boom. In this respect, Aid for Trade can provide valuable support and help accommodate regulatory reform and adjustment costs. The EU, for its part, is committed to moving forward on Aid for Trade and implementing the recently adopted EU Aid for Trade Strategy in its own right, independent of the outcome of the DDA or any other trade negotiations.

III. Item 4: Reports of expert meetings

a) Expert meeting on the trade and development implications of financial services and commodity exchanges

Moving to agenda item 4, we note that the expert meeting on the trade and development implications of financial services and commodity exchanges was broadly attended both by country representatives and by representatives of international organizations and specialized agencies. The selection of panellists enabled the meeting to produce quality inputs and insights, including a number of useful recommendations, in an area of central importance to development. The report (TD/B/COM.1/EM.33/4) clearly establishes that the development of elements supportive of market-oriented strategies for commodity sector development is not merely desirable but necessary if the current commodity boom and development gains from it are to be maintained. Other aspects, that are well underscored, include: the critical importance of strategy and national regulatory frameworks to facilitate regional integration and South-South trade in the area of commodities; the superiority of enabling free market-based alternatives over regulated markets and the need for effective infrastructure.

In the section dealing with financial services, the report clearly establishes the reasons why financial services are central to development. It provides a useful overview of the main regulatory issues and challenges that need to be taken into account, such as financial stability and investor protection.  We are also pleased to note that the multilateral negotiations in services, one of the key areas within the Doha Round, and within these, the liberalisation of financial services, are seen as an opportunity for better market access and the improved functioning of financial services in developing countries.

b) Expert meeting on participation of developing countries in new and dynamic sectors of world trade: the South-South dimension

As regards the second expert meeting on the south-south dimension of developing countries' participation in new and dynamic sectors of world trade, the outcome report (TD/B/COM.1/EM.34/3) highlights well the key issues related to the exploitation of market opportunities arising from the so-called new and dynamic sectors of trade. It usefully points to the importance of constructive policy coordination with the private sector and effective regulatory frameworks. Policy-makers have a crucial role in generating investor interest in a region or country and that a country's comparative advantages are factored into dynamic changes in regional and global demand. We agree with the recommendations of the expert meeting, especially on the need for UNCTAD to continue advocating the case for regional integration and South-South trade co-operation, and on the opportunities that result from improving the environment for investment.

IV. Item 5: Implementation of the recommendations of the Commission, including an assessment of the work of the Commission, since UNCTAD XI

Mr Chairman,

the EU has examined carefully the Progress report by the secretariat (TD/B/COM.1/91), particularly as it provides important information for lesson-learning on the substantive areas where UNCTAD can contribute most, as well as on the most productive methods and organization of work, including within the intergovernmental pillar. In our view, the secretariat's self-assessment does not address sufficiently the quality aspects and the actual impacts of UNCTAD work. We look forward to the secretariat providing more of these insights in its oral report to the Commission. With respect to the Report's observation that demands for targeted assistance exceed the capacities of the secretariat, we would welcome reflections on the scope and ways to improve the allocation of available resources, with the objective of focusing it in areas with the greatest potential for impact. I will present more specific questions when we move to this item, taking into account the additional oral briefing by the secretariat.

V. Item 6: Provisional agenda for the thirteenth session of the Commission

With respect to Item 6 and in-line with the general comment made earlier, the EU's position is that no agendas for future meetings can be approved prior to the UNCTAD XII Conference so as not to pre-empt its decisions, including and in particular under Sub-theme 4.

Mr Chairman,

I look forward to an in-depth discussion on each of the substantive items of the agenda during this session and will provide further and more detailed contributions at the opportune times.


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Date: 11.02.2008