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Presentation by Chinese Ambassador Sha Zukang, President of the Fiftieth Session of the Trade and Development Board to the 2nd Committee of the 58th Session of the General Assembly

2003/11/03

Mr. Chairman,

Mr. Secretary-General of UNCTAD,

Excellencies,

Distinguished delegates,

Ladies and gentlemen,

 1.        It is an honour and a privilege for me to address this important Committee, and I would like to begin my report by extending my sincere congratulations to you, Mr. Chairman, on being elected to chair the Second Committee of the 58th session of the General Assembly. I am particularly pleased to mention that you are very familiar not only with Geneva but also with the work of the United Nations Conference on Trade and Development (UNCTAD) and its Trade and Development Board (TDB) and that you have often contributed to the success of its deliberations.  On behalf of the Members of the TDB, I wish to extend to you our appreciation and best wishes. May I also take this opportunity to congratulate the other members of the Bureau of the Second Committee on their election. Today, I am here in my capacity as President of the Trade and Development Board to present to you the reports of the TDB, which are before the Second Committee.

Mr. Chairman,

 2.        Since its inception, UNCTAD's commitment to the cause of development has remained steadfast. I believe that UNCTAD has demonstrated and will continue to demonstrate its unique vitality and versatility in the United Nations system by being able to adapt to the changing international economic environment and by responding to the challenges of change and adjustment.

Mr. Chairman,

3.        While my report to the Second Committee will focus on the fiftieth regular session of the TDB, I shall touch very briefly on one other report of the Board, namely the report on the thirtieth executive session. Pursuant to a decision by the Board, this was the first executive session that the Board held to discuss the Least Developed Countries Report. The session focused on identifying key elements that need to be in place to improve the current approach to poverty reduction in LDCs, and it adopted agreed conclusions on national and international policies for more effective poverty reduction in those countries.  In particular, the Board recognized that the LDCs, with the support of their development partners, need to consider carefully the general policy orientations recommended in the 2002 LDC Report and underlined the importance of international support for national efforts aimed at improving supply capabilities and rationalizing supply through such approaches as minimum quality standards and horizontal and vertical diversification.

Mr. Chairman,

4.        The fiftieth session of the Board, which took place from 6 to 17 October 2003 began its deliberations by addressing agenda item 2 "Interdependence and global economic issues from a trade and development perspective: capital accumulation, economic growth and structural change". The Board had before it the Trade and Development Report (TDR) 2003 and the TDR Overview, which examined from a developing country perspective the trends that have shaped the world economy in recent years, as well as its future prospects, and analysed the causes of the persistently weak growth in the developed countries and of growth disparities among developing and transition economies. The TDR also provided an in-depth analysis of the links between the level and structure of fixed capital formation, productivity growth, structural change, industrialization and international competitiveness in different parts of the developing world.

5.        The TDB debate addressed the implications of the current situation in the world economy and the short-term outlook. The President's summary of the discussions noted the agreement among developed and developing countries that while weakening export demand and falling commodity prices had affected income growth in a large number of developing countries, the current situation showed that there were considerable variations with regard to the vulnerability of developing countries to different types of shocks and their capability to respond to such shocks.

6.        The Latin American and Caribbean region had been affected most by the recent global economic slowdown, while in Africa a number of domestic constraints and international factors, including the low level of commodity prices and capital inflows, had contributed to a real development crisis. It was recognized that Asia, as the fastest-growing region, was becoming increasingly important with respect to global growth dynamics, and that its development experiences might hold importantsome lessons for other developing countries. Short-term prospects for global growth are still troubled by a number of uncertainties and imbalances. Quite a number of delegations underlined the need for firm action in developed countries to stimulate growth and to ensure an orderly rebalancing of the world economy.

7.        Many delegations expressed serious concern regarding the uncertainties about whether the Millennium Development Goals would be met, and some believed that, even under the most optimistic scenario, it would be impossible to attain those goals, especially in Africa.

8.        The Board agreednoted that reforms undertaken in Latin America and Africa during the 1990s had not succeeded in creatingmet its objective to create a favourable environment for growth, and that policy recommendations and development strategies had to be reviewed. Many delegations also felt that developed countries should provide more technical and financial assistance, and meet the internationally agreed targets for official development assistance.

9.        All member countries wanted the multilateral trade negotiations to be resumed as soon as possible, but taking fully into account the needs and interests of the developing countries, particularly in the areas of agriculture and improved market access.

10.    Under agenda item 3, the Trade and Development Board conducted the annual review of progress in the implementation of the Programme of Action for the least developed countries for the decade 2001–2010. Currently, the central focus of UNCTAD's work with regard to these countries was on how best to contribute to the substantive and technical implementation of the Brussels Programme of Action for these countries for the decade 2001–2010, an issue that will receive due consideration, particularly in the context of the preparatory process for UNCTAD XI and during the conference itself in Brazil next year.

11.    The first issue addressed under this item was the UNCTAD-wide activities in favour of LDCs. This year's report provided member States with information on the scale and intensity of UNCTAD's activities in these countries. It also provided indicative and preliminary lessons drawn from activities undertaken, including, wherever possible, an assessment of the results achieved. The second issue concerned the expected impact of recent initiatives in favour of least developed countries in the area of preferential market access.

12.    In the agreed conclusions, the Board recognized the efforts of LDC Governments to promote political stability and create conducive macroeconomic conditions for investment so as to exploit market access opportunities, and urged them to continue these efforts. The Board also recognized the potential contribution of preferential market access to the sustained economic growth and development of LDCs, and the initiatives taken so far by developing countries, in the context of SouthSouth cooperation, to improve market access for LDCs.

13.    In this context, the Board expressed its appreciation for the efforts of the development partners of LDCs, and called on them to give high priority to enhancing LDCs' supply capacities and to address remaining bottlenecks hindering their market entry.  It also urged other countries that are in a position to do so, to take similar measures and implement market access commitments in favour of LDCs.

14.    The Board noted with concern the continued decline in many commodity prices, which resulted in a substantial loss of export earnings for the majority of the LDCs.  In this regard, it requested the UNCTAD secretariat, in cooperation with other relevant agencies, to explore ways of strengthening activities in the fields of commodity diversification, technical assistance and capacity building so as to generate greater value added in the commodity sector of LDCs.

15.    The Board also called on the UNCTAD secretariat, in cooperation with the World Trade Organization (WTO) and other relevant agencies, to continue to assist LDCs in their participation in the post-Doha work programme.

Mr. Chairman,

 

16.    Under agenda item 4, the Board addressed "Economic development in Africa: Issues in Africa's trade performance" on the basis of the analysis provided in the relevant report by the UNCTAD secretariat on this item. 

17.    TheIn the agreed conclusions, the Board noted with concern that despite an increasing share of trade in Africa's gross domestic product (GDP), Africa's share in international trade had fallen considerably in the past 20 years, representing only 2 per cent of world trade.  Considering that commodity dependence, inability to diversify the productive and export base, and decline in the prices of most commodities exported by Africa inter alia accounted for this poor performance, the Board recognized that terms-of-trade losses suffered by Africa had a direct impact on domestic savings, investment and the level of external debt of individual countries.

18.    In the light of this, the Board called for support for efforts, initiatives and activities aimed at developing and upgrading African countries' productive capacity, increasing their export earnings and adjusting to fluctuating commodity prices.

19.    It was acknowledged that African producers were at the bottom of the value chain of their exports, with a high proportion of value being captured by traders, processors and retailers. The Board agreed that there was a need for the provision of extension services and farm inputs, and improved transportation, market information and quality control, which would enhance the ability of African producers to retain and increase market share and move up the value chain.

20.    The Board agreednoted that the reduction of agricultural subsidies and tariff and non-tariff barriers were key elements for increasing African exports, and noted that the benefits of preferential market access schemes (e.g. EBA and AGOA)the Everything But Arm initiative (EBA) and the African Growth and Opportunity Act (AGOA)) could be enhanced by addressing issues such as rules of origin, sanitary and phytosanitary measures, technical barriers to trade and productive capacity.

21.    Innovation and better promotion of African commodity exports, including non-traditional ones, must be supported and enriched by exchanges of experiences in this area. 

22.    African countries were encouraged to continue to promote peace and stability, and strengthen their economic and legal framework, and the Board welcomed their efforts in consolidating regional and subregional initiatives, and noted that great benefits could be derived from these.  It requested the UNCTAD secretariat to identify the potential for the further expansion of intraregional trade.

Mr. Chairman,

23.    Finally, the Board considered that African countries' efforts in the context of the New Partnership for Africa's Development (NEPAD) needed to be complemented by improvements in the application of the HIPCHighly Indebted Poor Countries (HIPC) Initiative, and the supply of additional public and private resources to bridge the investment gap. The UNCTAD secretariat was requested to continue to support African countries in their endeavour to meet the aims and objectives of NEPAD, and to provide analysis and policy advice on African development.

24.    Under agenda item 5, the Board reviewed, from a constructive and forward-looking perspective, the developments and issues in the post-Doha work programme including the outcome of the Fifth WTO Ministerial Conference, on the basis of the UNCTAD secretariat's note entitled "Review of developments and issues in the post-Doha work programme of particular concern to developing countries: The outcome of the Fifth WTO Ministerial Conference" as contained in document (TD/B/50/8). Delegations expressed the view that the note provided a balanced analysis of the Cancún results from the perspective of developing countries, and constituted an excellent basis for the deliberations of the Board.

25.    There wasThe President's summary of the discussions noted the general agreement among countries that there is no better alternative than the multilateral trading system (MTS) for promoting the objective set out in the Millennium Declaration of an "open, equitable, rule-based, predictable and non-discriminatory multilateral trading system" in pursuit of development and poverty eradication. However, it was stressed that trade and trade negotiations must not divert attention from key development problems that must be addressed urgently.

26.    Emphasis was placed on concerted international political will and efforts to address the inherent limitations that developing countries face in the MTS and in accessing markets and addressing supply-side constraints and competitiveness. Coherence in policy formulation and coordination between the UN system, including UNCTAD, the Bretton Woods system and the WTO were considered important for promoting economic growth and development in all nations.

27.    The Doha Ministerial Conference was a milestone in the evolution of the MTS, particularly in placing "development" at the heart of the work programme. The development agenda needs to be made a reality, as the issues at stake are vital to developing countries in order to ensure that the MTS contributes to an inclusive global economic system.

28.    The outcome of the Fifth WTO Ministerial Conference in Cancún, Mexico, was of course at the heart of the discussion. While the Conference was not able to achieve a successful outcome, many countries emphasized that Cancún must be seen in perspective that it was meant to be a mid-term review of the Doha Work Programme (DWP), a stocktaking with the possibility of providing political direction on key issues of the Doha agenda. Many also stated that a manageable agenda based on what could be realistically achieved would have been more appropriate. Process-related issues deserve serious examination in order to enhance inclusiveness, transparency and democracy without diverting attention from core market access and development issues. 

29.    Cancún should serve as a wake-up call for the international community to build mutual trust and resolve the differences in order to restart the negotiations.  All countries agreed that efforts must be made to put the DWP back on track. Greater political will is required in order to address in particular the development issues raised by developing countries.

30.    Trade negotiations and implementation of their results will involve considerable adjustment and social costs for developing countries. In the interest of manageability and prioritization in the DWP, delegations felt that it might be better to concentrate for the present on substantive and core trade issues of market access in agriculture, goods and services, special and differential treatment, implementation issues, and unfinished business from the Uruguay Round. Some suggested that it would be timely to remove the Singapore issues from the WTO work programme. Meanwhile, other organizations, for example UNCTAD, could be asked to continue work to build confidence, clarify development implications and provide for substantive treatment of those issues. In this regard, it was indicated that the "development benchmarks" set out in the UNCTAD secretariat's note could be further elaborated with manageable baseline information.

31.    There was generally agreement that UNCTAD makes an important contribution to developing countries in terms of their effective participation in the DWP and international trade through its analytical work, intergovernmental consensus-building and technical assistance and capacitybuilding activities. UNCTAD can act as a facilitator for the fuller and beneficial integration of developing countries in the MTS and the wider international trading system. It also provides a forum for consensus building and maturing of negotiating areas for further treatment in WTO, and can thus contribute to putting the DWP back on track.

32.    Several countries made reference to General Assembly resolutions 57/270 B and 57/250 inviting UNCTAD and the Trade and Development Board to contribute to the implementation of the outcomes of major UN conferences and summits, and to the review of progress made in implementation. The resolutions designated UNCTAD and the Board as important institutional stakeholders in UN-wide work on the implementation of the Millennium Declaration, and the outcomes of the Monterrey, Johannesburg and Doha conferences. This mandate increases the direct relationship between the Board and the General Assembly and provides an important opportunity to raise the profile of international trade and trade negotiations in relation to development.

33.    UNCTAD XI should also provide the appropriate impetus to enhance this vision and the work of UNCTAD. The conference's sub-theme three on ensuring development gains from international trade and trade negotiations affords an opportunity to contribute positively to reinvigorating the multilateral trading system and providing the impetus for the beneficial integration of developing countries into the trading system.

Mr. Chairman,

34.    Under agenda item 11 "Other business" the Board considered the Report of the Eminent Persons on Commodities. You will recall that General Assembly resolution 57/236 requested the UNCTAD secretariat to designate independent eminent persons to examine and prepare a report on commodity issues for consideration by the Board and subsequently by the General Assembly at its 58th session. The Board took note of the report of the eminent persons and transmitted it to the General Assembly for its consideration. The Board also decided to include in its report a summary of statements made by member States on this item during its fiftieth session.

35.    Notwithstanding the heterogeneity of the group of eminent persons, Part I of their report contains a series of agreed recommendations that are remarkably substantive, well focused and operational.

36.    Many countries welcomed the report of the eminent persons.  The importance of  commodities for the development process in many developing countries, particularly LDCs, was highlighted. Countries noted that a number of the major recommendations of the report were given the highest priority, including enhanced, equitable and predictable market access for commodities of key importance to developing countries; the need to address the problems of oversupply of many commodities through a sustained programme of diversification and moving up the value chain, carried out at both the national and global levels; making compensatory financing schemes user-friendly and operational; strengthening capacity and institutions; and pursuing the possibilities for the creation of a new International Diversification Fund.

37.    It was stressed that commodities remained the economic backbone of many developing and least developed countries. The report proposes specific measures for the short, medium and long term,long-term, the implementation of which could enable recurrent negative effects in the commodity sector to be reversed.  While some countries agreed with the analysis and conclusions contained in the report and hoped that the recommendations would be fully implemented, others thought that the recommendations, although useful, focused disproportionately on what should be done at the international level and that significant efforts would also be required at the national level.

38.    Delegations greatly appreciated the initiative taken by the General Assembly in its resolution 57/236. They also repeatedly expressed their hope that the General Assembly would pursue the matter with diligence and provide a much-needed political backing to the search for, and action on, measures aimed at solving the commodity problem.

39.    Under agenda item 6(a), in reviewing technical cooperation activities of UNCTAD, the Board adopted a decision containing UNCTAD's new technical cooperation strategy, which emphasizes long-term goals and institution building in accordance with the UNDP's concept of "capacity development". It addresses the practical problems of formulating and implementing trade and development policies in an era of globalization and liberalization. It is designed to strengthen the effectiveness and impact of UNCTAD's technical cooperation as an essential complement to its policy analysis and intergovernmental machinery.  Expressing concern about the declining share of extrabudgetary financial resources going to LDCs and Africa, the Board welcomed their overall increase and requested the UNCTAD secretariat to promote its new technical cooperation strategy among donors and beneficiary countries and to regularly review progress in its implementation.

40.    Under agenda item 6(b) - "Consideration of other relevant reports: Report on UNCTAD's assistance to the Palestinian people" - the Board  considered a report by the UNCTAD secretariat which examined the impact of the last three years of deterioration on the war-torn Palestinian economy. It took note of the secretariat's report and included a summary of the deliberations under this item in its report to the General Assembly. The discussions on this item are reflected in the annex to the report that is circulated to you in accordance with decision 47/445 of the General Assembly.

41.    Under agenda item 7 – "Preparatory process for the eleventh session of the Conference on Trade and Development"- the Board established an open-ended Preparatory Committee under the chairmanship of the President of the Board.  It also approved the draft provisional agenda for UNCTAD XI.

Mr. Chairman,

42.    UNCTAD´s eleventh conference in June next year will be a historic event since it will mark the fortieth anniversary of the organization.  It will look at an increasingly critical issue in today´s interdependent world: the link between the national and international dimensions of trade and development. 

43.    The preparatory process for UNCTAD XI is well underway. The first meeting of the Preparatory Committee was held during the fiftieth session of the Board.  Delegations welcomed the submission by the Secretary-General of UNCTAD on the preparations for UNCTAD XI. Part I of the submission is a general reflection on key developments over the last period of development history. It focuses largely on the evolution of UNCTAD.  Part II, however, was designed as a  pre-Conference text to assist usmember States in ourtheir deliberations. It addresses the overall topic of the Conference - enhancing the coherence between national development strategies and global economic processes - and its four sub-themes: development strategies in a globalizing world economy; building productive capacity and international competitiveness; ensuring development gains from the international trading system and trade negotiations; and partnerships for development. 

44.    A series of consultations within regional groups is now taking place in preparation for the brainstorming session planned beginning from 7 November.  At these sessions the PrepCom will discuss  organizational matters, including the timetable for the PrepCom meetings, as well as the substantive outcome of the forthcoming UNCTAD XI. It is my hope that after these brainstorming sessions the PrepCom will hold its deliberations on the sub-themes in December.

45.    Moreover, during the preparatory process and the Conference itself, there will be a series of parallel events, including a Civil Society Forum, in order to allow civil society to express its views.  In this context, during the fiftieth session of the Board, a Civil Society Meeting was held. The meeting provided civil society representatives and the UNCTAD secretariat with an opportunity to hold discussions and exchange views regarding pertinent organizational and substantive preparations of the civil society dimension for UNCTAD XI. Also discussed were issues related to trade and gender, trade and poverty and trade and creative Industries.  Civil Society representatives will be invited to report back to the PrepCom on the outcome of their first meeting.

Mr. Chairman,

46.    It is my hope that the spirit of cooperation, consensus and confidence building that prevailed during the fiftieth session of the Board and the first meeting of the PrepCom will continue to prevail for the duration of the preparatory process, during the Conference itself and afterwards.

Let me conclude, Mr. Chairman, by expressing my deep appreciation to you and to all members of your Committee. We in UNCTAD value very much your cooperation and support so that our collective efforts in Geneva and in New York can contribute to the desired results, and in particular as we look ahead to the Eleventh United Nations Conference on Trade and Development in São Paolo, Brazil, in June 2004.

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