Market access: developments since the Uruguay Round, implications, opportunities and challenges in particular for the developing countries and the least developed among them, in the context of globalization and liberalization

CHECK AGAINST DELIVERY

Economic and Social Council
High-level segment

Item 2: Market access: developments since the Uruguay Round, implications, opportunities and challenges in particular for the developing countries and the least developed among them, in the context of globalization and liberalization

Statement by Mr. Leiv Lunde, State secretary, Ministry of Foreign Affairs

New York,
7 July 1998

Mr. President,

Globalization may give the impression that the world is becoming smaller, since distances are being reduced in terms of technology, trade and economics. Globalization encourages the misconception that all nations are able to take part in the process automatically as equal partners, sharing common ground. We all know that this is not true. In fact, globalization does not make the world smaller. One might say it makes the world even larger and more complex, because the channels of information, communication and trade have increased in number, efficiency and speed. These channels allow many more questions and issues to be raised on the agendas of the world’s institutional fora. Moreover, globalization does not guarantee that all countries are given the opportunity to participate. Quite the contrary.

Accordingly, globalization poses important challenges. The least developed countries (LDCs) must not, yet again, be left on the sidelines when profound transformations are taking place in the world economy. DAC statistics published a few weeks ago show that the decline in Official Development Assistance (ODA) is continuing. Total financial flows to all aid recipients fell from 368 billion USD in 1996 to 272 billion USD in 1997. As a percentage of the DAC countries’ combined gross national product, ODA has fallen for five consecutive years, from 0.33 per cent in 1992 to 0.22 per cent in 1997, its lowest level ever. Other reports tell us that the share of the LDCs in world trade represents less than 0.5 per cent. Market barriers are highest for the main products exported by LDCs, particularly agricultural products, textiles, clothing, footwear and leather products. This continued marginalization of LDCs in world trade is of deep concern to my government; the impact of which is worsened by the reduced official financial flows to the developing world.

Mr. President,

These discouraging trends notwithstanding, globalization should have every chance of becoming an important instrument for the developing world, including the LDCs; not least in increasing exports, employment and income. The challenges posed by globalization in this regard are threefold. Firstly, the challenge is addressed to ourselves, the developed countries, as trading partners. We need to improve our management of the globalization process. In particular, we need to establish more open markets to facilitate enhanced LDC export earnings.

Secondly, we also invite all, and in particular the more advanced developing countries, to make their import regimes more liberal and allow more exports from the LDCs. Increased south-south trade and economic cooperation represent an important avenue of progress for the LDCs. However, the LDCs themselves also have a prime responsibility. There are still too many shortcomings in domestic political and institutional frameworks that prevent them from reaping the benefits of trade and globalization.

Thirdly, further progress should be achieved in the multilateral trading system. In the context of today's agenda, a main task is to improve the international economic and trading framework for the LDCs, in particular market access. Further LDC preferences should be considered, and it is a joint challenge to increase the rate of utilization of already available preferences. More flexibility with regard to rules of origin are among the reforms that may be called for in order to achieve this.

Mr. President,

Improving trade terms and other market conditions will undoubtedly assist the LDCs in breaking the vicious circle of underdevelopment, poverty and unrealized potential. This may not help, however, if we don't manage to solve the debt crisis. The fact that many LDCs suffer from almost paralyzing debt burdens, is depriving them the benefits of increased export earnings. The multilateral initiative to address the debt of highly indebted poor countries - the HIPC initiative - represents a major step in the right direction. However, it will only succeed if we, the creditor governments, meet our obligations under the initiative and facilitate its implementation. For this reason my goverment has recently launched a comprehensive debt relief plan. It contains a number of specific measures that Norway will take to facilitate debt relief within the frameworks of the HIPC and the Paris Club. We hope the plan will inspire other countries to take similar action. Unless we take strong, concerted action on debt, much of what we undertake in other areas will have limited effect.

A central feature of globalization is the growing prominence of the private sector. This has major implications for LDCs. Without the private sector as a dynamo in a competitive economy there will be little development. Authorities in LDCs and donor agencies must cooperate with the private sector to create a climate that attracts private investment. Innovative public-private partnerships are needed, where the main public responsibility is to create a framework for a thriving private sector. On our side, my government is currently finalizing a strategy for how to stimulate private sector development in developing countries.

Mr. President,

I would like to add a few more comments on the challenges we are facing and the spesific measures we are taking for further enhancement of market access for the LDCs’ exports. Norway has gone further than most countries in opening its markets for LDC products on a unilateral basis. With the exception of grain, flour and feeding stuffs - which are given a 30 per cent preferential margin within indicative tariff ceilings - all goods from LDCs may enter the Norwegian market without tariffs or quotas. Other developing countries are also granted a wide range of preferences.

In order to assist the LDCs in developing their human resources in the trade sector, and to take advantage of existing opportunities offered by the present trade regime, Norway is contributing technical cooperation both bilaterally and through multilateral channels. Over the years we have provided substantial funding for technical assistance activities carried out by UNCTAD, the WTO and the ITC. Other institutions such as the UNDP, the World Bank and the IMF also have important roles to play. The overall UN reform process should result in more coordination between institutions involved in trade-related technical cooperation. A positive step in this direction is the formal launching of the Integrated Africa Programme to enhance national trade capacity.

Within the WTO Norway will continue to give high priority to the concerns of the poorest countries. We were therefore encouraged by the Declaration from the last Ministerial Conference in the WTO, which recognised the urgent need to address the marginalization of the LDCs. We are paying considerable attention to the follow-up of the recommendations of the WTO High Level Meeting on LDCs last year. Finally, we must assist those who are not members of the WTO, in their endeavours to join the organization, which will put them in a better position to influence the future development of the multilateral trading regime.

Mr. President,

Globalization characterizes the world economy of today. It offers prospects of economic and social growth that will benefit all countries, but it also brings a potentially serious downside - particularly for the poorest countries and peoples. Thus, the challenge we all share is to ensure that all nations gain from globalization and that vigorous international efforts are made to integrate the LDCs more effectively into the world economy.

Thank you, Mr. President.