Commission on Trade in Goods and Services, and Commodities

GROUP OF 77
GENEVA

Statement by Mr. Mohamed Tawfik, Chargé d'affaires of the Arab Republic of Egypt, on behalf of the Group of 77 and China, at the Commission on Trade in Goods and Services, and Commodities

Geneva, 4 February 2002

Mr. Chairman,

Let me congratulate you Mr. Chairman for your election and wish you all the success in your work.
UNCTAD has provided crucial support to developing countries during the Uruguay Round and in subsequent negotiations. The same level of support is expected from UNCTAD in the post-Doha negotiations. The work which has been conducted pursuant to the mandate set out in the Bangkok Plan of Action should be built upon. It should focus directly on the specific issues of Doha. The work of the expert meetings over the past two years has been very useful for developing countries in preparing for the negotiations, particularly in the areas of services, agriculture, and anti-dumping. Expert meetings to be held over the next year should be carefully selected to address issues under negotiations where expert views could be of comparable value.

Negotiations are to commence shortly on trade and environment, earlier than expected.. It is essential that developing countries be prepared to address the variety of issues on the trade and environment interface, including the links with negotiations on other areas such as agriculture. There is also a need to examine the potential impact on developing countries' interests and to develop the various elements for possible future negotiations on the subjects proposed by the developed countries, notably environment, and with a different mandate, competition and investment. However, resources are mostly needed in areas where the developing countries have placed their proposals on the table. One advantage of the Doha programme is that these issues must be satisfactorily resolved before negotiations can proceed in other areas. In that context, we would like to commend the efforts of the Secretary-General and his staff in preparing a detailed Plan for assistance to developing countries in the Doha Work Programme. Such efforts are welcome especialy for being demand driven and not donor or secretariat driven.

In the Doha Declaration, Ministers made important commitments to provide technical assistance to developing countries. The G77 urges that donor governments and organizations give priority to UNCTAD in executing these commitments. UNCTAD’s assistance is unique in that it is not guided by any particular ideology, nor subject to conditions.
The Doha work programme can have a great impact on development. This will depend upon the extent of the additional resources to be made available, in particular, to the UNCTAD technical assistance. We urge all countries and donor organizations to respond positively and quickly to this very timely initiative of the SG of UNCTAD. In that context we welcome UNCTAD's activities in supporting developing countries, taking into account the special needs of LDCs, in participating effectively in post-Doha negotiations and discussions, including in the area of agriculture and environment.

Mr. Chairman,

Agricultural production in developing countries has grown faster than in developed countries since the early seventies. Much of the increased production in the former was however domestically consumed, while that in the latter was mostly directed to export markets. Total agricultural trade value increased 7.5 times. However, the share of developing countries in their traditional commodity markets has declined by about a fifth since the seventies, and only a few developing countries have benefited from the growth in high value added products, such as vegetable oils, fish, vegetables, cut flowers and poultry.

There has also been an increasing import-penetration of developing countries, in particular by developed country agricultural producers, and this has led to a significant deterioration of the trade balance of developing countries as regards agricultural products, in particular in LDCs. Recent changes in market structures for agricultural products, including food products, have led to a number of new production and export constraints for developing countries and have worsened the impact of other constraints. These include limited technical managerial skills, expensive and inadequate supplied inputs, new requirements as regard product quality, insufficient Research and Development and transfer of technology (in particular better seeds) slow development of new products, lack of finance and organization, and infrastructure deficiencies.

Experts have recommended that UNCTAD, in cooperation with other organizations, should provide and disseminate, including through electronic means, market analyses and strategies, and carry out research and promote policy dialogue on agricultural trade.

As we know, Mr. Chairman since the beginning of 2000, UNCTAD has been implementing a project entitled « Capacity building for diversification and commodity based developed », aimed at assisting developing countries’ efforts directed towards horizontal, vertical and geographical diversification of production and trade structures and to specific needs expressed by individual countries or small groups of countries. These needs, in most cases, are closely related to the recommendations of the experts. It is crucial that country-level implementation can be carried out and that resources are made available for this purpose.

The Group of 77 and China welcomes the recommendations by the expert group. As already mentioned by Ambassador Amina C. Mohamed who chaired the expert meeting in a very able manner, these recommendations provide an excellent basis for the work of this Commission. The Group of 77 and China is confident that we will be able to turn them into agreed conclusions for policy actions at the national and international level, including for UNCTAD’s work.

With regard to niche markets for environmentally preferable products, including organic agricultural products, our Group is interested in exploring such opportunities and is convinced that the deliberations and recommendations by the excellent group of experts are of great value to the developing countries. To seize the potential benefits of organic agriculture, many constraints have to be overcome. In that context, the recommendations of the experts are very useful indeed. They provide useful inputs for our authorities, farmers and business community at home. We strongly endorse their recommendations to the international community, for example in areas such as reducing certification costs, in particular for smallholders, equivalence of standards and transparent and simple import procedures. We encourage UNCTAD to play an important role in promoting- in cooperation with other intergovernmental organizations and the private sector -, the effective implementation of these recommendations. In particular, we hope that UNCTAD will be in a position to ensure the effective implementation of the recommendations on technical cooperation and capacity building, including in designing policies resulting in increased productivity and export capacities for the developing countries.

Mr. Chairman,

The energy sector has the potential to greatly contribute to the economic growth of all countries and to international trade. Energy is one of the most important drivers of economic development and is a key determinant for the quality of our daily lives.

Important segments of people in developing countries have very limited access to commercial energy. This situation jeopardises the prospects for development of such countries and is a major cause of environmental and health hazards.

The energy sector is becoming increasingly dynamic and innovative. Competition is increasing and, as a result, efficiency is growing. However, the continuing capacity of countries to satisfy the rising demand for energy will depend on appropriate investments in research and development.

Free trade in energy, goods and services can offer significant economic benefits both in terms of security, flexibility and quality of energy supply and greater competition, and hence enhance national welfare.

Energy services play a crucial role in providing efficient access to energy in support of development. They constitute the value added in the energy chain.

Barriers for developing countries to play a more active role in the energy services sector include the absence of clear national/regional strategies for the sector; the need for a large amount of capital to start a business; the concentration of expertise and technology in the hands of a few large firms; the absence of adequate regulatory frameworks; lack of financial resources to build efficient generation and transmission infrastructure; and political instability.

The negotiations on services are ongoing. Seven negotiating proposals have been put forward on this specific field by developed and developing countries. Countries, according to the Doha Ministerial Declaration, would have to submit initial requests for specific commitments by 30 June 2002, and offers by 31 March 2003.

Considering the relevance of the energy sector and its close link with development, the negotiations are of key importance for all countries. For energy-rich developing countries, they are an opportunity to try to ensure that local capacities in energy services are created and/or enhanced and that in the future, local energy-services firms may be in a position to provide services abroad. For those developing countries which are not energy-endowed and suffer from energy shortage, the ongoing WTO negotiations may help in achieving conditions which contribute to a better way on managing and distributing energy.

In view of the novelty and complexity of the issues related to the energy services sector and its trade and development implications, and considering the ongoing WTO negotiations on services, the Commission on Trade will hopefully give the UNCTAD secretariat the mandate to continue working on this theme by carrying out activities aimed at (i) a better understanding of the issues at stake; (ii) offering a forum for the exchange of experiences among policymakers, trade negotiators and researchers; and (iii) providing capacity-building opportunities. At present, no other intergovernmental organizations are specifically doing so. The Outcome of the Expert Meeting includes a list of interesting topics for further analysis and activities that the Commission may wish to analyze in detail.

In the area of competition, Mr. Chairman, the Group of 77 and China expresses its concerns about the implications of globalization and liberalization for the competitiveness of developing countries and their enterprises, particularly in the post-Doha context.

We welcome the outcome of the Expert Meeting on Consumer Interests, Competitiveness, Competition and Development which clarified the links among consumer protection, competition policy and competitiveness.

UNCTAD should pursue the reflection on this question and, as recommended by Expert Meeting, sharpen the focus upon specific areas such as the regulation of public services, and cross-border transactions, cross-border fraud and e-commerce.

Thank you Mr. Chairman.