EU Presidency Statement - Ambassador Trojan's intervention on the right to development

Summary: February 26, 2002: Intervention of Amb. Carlo TROJAN at the Working Group on the Right to Development - International Trade Aspects (Geneva)

Mr. Chairman (Ambassador Dembri), Professor Sengupta

I am most glad to participate at this meeting of the Working Group on the Right to Development - focussed today on International Trade Aspects - particularly after the Doha WTO Ministerial. The positive results of Doha and their implications for the realisation of the Right to Development cannot be overestimated.
Before addressing Doha, allow me to say a few words on the interrelationship of trade and development, and its implications on the discussion of the Working Group on the Right to Development (RtD).

Trade and Development policy

We live in a world of interdependence and globalisation. We try to harness globalisation, which is a big challenge. Trade and development are one of the priorities of the EU/EC development policy. Indeed, as a leading player in the area of trade - being the most important trading partner of developing countries and a major source of foreign direct investment (FDI) - and in the area of development assistance - the EU (EC and MS) being the largest ODA provider (55%) in the world , the EU has a role to perform in order to establish a link between trade and development. Our objective is to ensure that development policies, and trade and investment polices, are coherent, complementary and mutually beneficial and do contribute to the poorest countries.
The EC already integrates trade aspects (and Human Rights) in its Cooperation Programmes. Trade-related areas are an important part of the EU - ACP Partnership Cotonou Agreement. At last year's Working Group (recalled by the Spanish Presidency yesterday) we explained that the concept of the EU-ACP partnership agreement is very close to the concept which the Independent Expert - Professor Sengupta - calls a "development compact". Mainstreaming trade into development is also a priority for the EC in drafting coherent country strategy papers that are the basis for development programmes.

Trade liberalisation and market access

Increase trade is a key element in the strategy to eradicate poverty and to contribute to economic growth. Experience shows clearly that multilateral trade liberalisation has a significant impact on economic growth and export performance of countries. The EU considers that enhanced market access for developing countries is essential. It is also key in the new Round of Negotiations.
However, experience show that some countries have benefited more than others from trade liberalisation. Today, important imbalances persist, which has been recalled by delegates of this Working Group. Trade can stimulate crucial efficiency gains in developing countries, but in some cases this positive process has been hampered by different phenomena. Allow me to mention some of them to which delegates have been referring yesterday:
1. Protection- both in developed and in developing countries - can be an obstacle for trade liberalisation, particularly if related to sensitive sectors that are important for the concerned countries such as agriculture and labour intensive goods. Hence the importance of the EU decision to grant duty free and quota free access to all exports originating in the Least Developed Countries (LDCs) known as the Everything But Arms (EBA) initiative. But beyond LCD's, an extra effort has to be made.
2. Another factor (limiting the benefits from trade liberalisation) is still the absence of appropriate domestic policies. Particularly developing countries need to make equivalent efforts by providing adequate domestic policies.

It goes without saying that the international level can play a crucial role in helping developing countries to create an enabling domestic environment. But again, efforts must come from both sides.

The importance of regional integration

It will no surprise to you that the EU is a firm believer in regional integration. We have a successful experience ourselves and are promoting it in our external relations, also with our Eastern European neighbours. As the Chair mentioned this morning, Regional integration initiatives can be building blocks towards the developing countries' full integration into the international trade system, particularly through supporting to improvement of their domestic policy environment. In addition, integration at regional level can also have a stabilising effect politically.
We therefore welcome - as did the High Commissioner Mrs Robinson - the New Partnership for Africa's Development (NePAD) as an important initiative directed to achieve sustainable development in Africa. NePAD recognises the African responsibility and ownership, to create the conditions for development, by strengthening regional integration.

On Doha and its implications on Development

Let me recall that one of the overriding objectives of the European Union in the run up of Doha was to work for the better integration of developing countries into the world trading system. It is fair to say that we have achieved to include this objective in Doha Development Agenda (DDA). The integration of the development dimension in the international trade matters runs like a red thread trough the Doha declaration.
In practically every single area that the WTO will be working and negotiating on in the next three years, a clear development mandate is included. In practically all areas of negotiation, specific and operational provisions for special and differential treatment will be foreseen. Moreover the Committee on Trade and Development (CTD) will meet in a special session to address special and differential treatment issues.
We have clearly committed ourselves to give developing countries appropriate assistanceand support to ensure that they will have maximum benefit from whatever deal is negotiated in the Doha Development Agenda.
We are also committed to improving and enhancing existing activities on trade related Technical Assistance and Capacity Building. The EC and its Member States will be major donors to the Trust Fund ( a pledging conference will take place in 10 days time). But beyond funding we are looking for ways to increase co-operation and synergies between bilateral and multilateral donors and the international institutions active in this field, with a view of delivering assistance in the most effective way in line with priorities of recipients and the objectives set out in DDA.
In Doha we have made progress in all areas of concern for developing countries both on substance and process: from Market Access, Agriculture, Industrial Tariffs, over rules to the special provisions on development, and the strengthening of their overall capacity to participate in negotiations and to implement the outcome.
We can add to this the decisions taken on implementation which cover 40 subjects of interest to developing countries and the crucial decision on TRIPs and Access to Medicines. I think it is fair to say that never before within WTO/GATT the interests of developing countries have been covered so comprehensively. Now, in the next three years, we have to deliver.

The need of consistency

Doha also demonstrated the need to create a synergy between international trade aspect and other policies [in order to maximise the benefits of liberalisation and to make trade supportive of sustainable development]. It is therefore relevant that international trade aspects are raised in the context of the Right to Development. I particularly welcome that the Working Group has invited other UN agencies and relevant Organisations to get a better knowledge of their expertise in the different policies related to the Right to Development process. However, the Working Group cannot be the place to substitute itself for multilateral negotiations, in areas where other international Organisations are entrusted to do so. There should be no duplication.
In this regard, we wonder whether the Working Group as a whole has been fully taken into account other processes that are on the way in other Fora. Consistency in our approach is indeed very important. I mentioned already the issues that were included in the Doha development agenda. International resources for development are topics to be discussed in the International Conference on Financing for Development. The World Summit for Sustainable Development in Johannesburg will be another opportunity to further develop the international development strategy. Bridging the digital divide, will be one of the key issues of the World Summit on the Information Society, to be held in Geneva (2003) and Tunisia (2005). In other words, Doha, Monterrey and Johannesburg form a continuum in international efforts in a variety of fora to deal with the same issues of poverty, development, globalisation and trade liberalisation in a coherent manner.

Comments on the report of the independent expert

Allow me to make some comments on the report of the Independent Expert - Professor Sengupta - with relation to international trade matters:

On trade, the basic message of the report is that developed nations should open their markets for developing country exports and cut down subsidies. While we do not dispute this - we have indeed committed to doing so in the context of the New Round - it is an oversimplification and creates the impression that market access to developed markets in itself is sufficient to help countries grow. The report does miss a few points, in particular:

The need for trade liberalization in a broader sense, i.e. (i) liberalization of own markets is by the World Bank estimated to give higher growth than export market liberalizations, and also (ii) market access to neighboring developing country markets is often more important.
The need for Regulatory frameworks: i.e. domestic policies creating a framework conducive to trade and investment (good governance, rule of law etc) is a necessary factor. Multilateral rule-making such as that envisaged in the Doha Declaration on investment and competition can support this by providing greater transparency and predictability. Regional integration can be another useful supporting mechanism, hence the EU Cotonou Agreement.
Capacity building: Both of the above require capacity building domestically (in development programmes and PRSPs) and by international community. Particularly needed are: (i) building capacity to participate in negotiations in WTO (short term); (ii) regulatory and administrative capacity in view of rule-making and domestic regulatory reform; and (iii) supply side capacity (including productive and trade capacity) to help countries make use of increased opportunities.
Finally Mr. Chairman, I dealt mainly - as requested - with international trade aspects. However, development is not only about trade and economy, it is also about choices, freedom and self-realisation. I hope that this Working Group will add its value and be a constructive input to the human rights approach to development. We are looking forward to a lively debate.

Thank you.

Ref: PRES02-018EN
EU source: EU Presidency
UN forum: Second Committee (Economic and Financial Affairs, Environment)
Date: 26/2/2002

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