INDUSTRIALIZED WORLD WILL BE URGED TO COMPLY WITH THE DOHA COMMERCIAL COMMITMENTS

6 March 2002



MONTERREY SUMMIT


The still-high barriers to the exports of many developing countries are estimated to cost them 130 billion a year, and the Monterrey (Mexico) Summit, 18-22 March, might be an opportunity to urge the Industrialized World to comply with its commitments for a "fairer and more open world trading system."

The International Conference on Financing for Development will be attended by several Heads of State and Government, including US President George W. Bush, and the United Nations Secretary General Kofi Annan believes that "the Monterrey meeting should build on the momentum achieved in Doha (Qatar), with its promise of a new agenda of trade negotiations with a development focus."

Last November, the 142 members of the World Trade Organization (WTO) agreed on negotiating a range of key issue of special interest to developing countries, such as the reduction of subsidies for agricultural products, improving access for non-agricultural products by reducing or eliminating tariffs and the abuse of anti-dumping laws.

Agricultural subsidies in the developed and relatively economically advanced member countries of the Organization for Economic Cooperation and Development (OECD) amounted to 361 billion dollars in 1999 – more than the entire gross domestic product of Sub-Saharan Africa.

Moreover, developing countries are confronted with other types of difficulties in market access. Many of their non-agricultural exports are limited by high tariffs or by tariffs that escalate
with the degree of processing. This discourages some of them from trying to supply these higher-value products ;

Even if they succeed in penetrating the market of developed countries, they sometimes
find themselves unjustly accused of "dumping" and become the target of "anti-dumping" penalties.

A recent study estimated that removing all trade barriers could bring a potential gain to developing countries of about 130 billion dollars a year – at current prices and covering only the gains on merchandise trade- dwarfing the estimated 50 billion extra in Official Development Assistance (ODA) needed annually to reach the Millennium goal of cutting by half the poverty around the World by 2015.

For their own part, developing countries clearly have to reduce their dependence, excessive in some cases, on primary commodities, making them "highly vulnerable to short-term price fluctuations". Over the long term, they face the problem of their export prices that are declining in relation with the prices of the mainly manufactured goods that they import. More than 50 developing –including two-thirds of the 22 heavily indebted poor countries- still depend on three or fewer commodities for more than half of their export earnings.

Developing countries need to diversify their exports, especially by shifting to exports of manufactured goods and services. The example was given by some Asian States. According to a World Bank study, some 24 developing countries, with a population of 3 billion, have doubled their ratio of trade to income in the past two decades.

The Monterrey Conference is not a trade negotiation forum, but the WTO has joined as one of the United Nations main partners, together with the International Monetary Fund and the World Bank. The meeting will therefore serve as a forum in which trade measures may be discussed in the context of their relation to other financial aspects of development and as "a way station in building political support for a fairer and more open world trading system."




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