Bridges Trade BioRes • Volume 3 • Number 19 • 31st October 2003
UN Assembly and WTO Discuss Primary Commodities
UN Assembly and WTO Discuss Primary Commodities
On 27 October a group of economic experts presented their results from a study on commodities trends and issues to the UN General Assembly, stressing that increased market access for key commodities from developing countries is essential to development efforts. Commodities were also debated at the WTO Committee on Trade and Development on 16 and 23 October to discuss a proposal from a group of East African countries on the declining prices of primary commodities.
Urgent need for enhanced market access - UN willing to move forward
The expert group reported on the latest developments in the commodities market, in particular as they relate to developing countries. In conclusion, the fifteen experts highlighted the urgent need to give equitable and enhanced market access for primary commodities of key importance to developing countries. The experts also stressed the need to deal with the current crisis in the primary commodities market and emphasised the linkages between prices, poverty alleviation and the improvement of crop management systems. The report lays out a set of recommendations pointing out, amongst others, the important role of the United Nations Conference on Trade and Development (UNCTAD) to move this issue forward, for example by creating a new international diversification fund and by developing a partnership involving business, governments, producers, traders and civil society. The Secretary General of UNCTAD pointed out that the UNCTAD 11 meeting, scheduled to take place in Brazil in June 2004, would be a good opportunity to move commodities issues forward. In conclusion, the panel of experts noted the need to restart trade negotiations at the WTO, arguing that trade liberalisation and trade negotiations are important mechanisms for developing countries to reach the Millennium Development Goals. During the debate, speakers also stressed the importance of having a multilateral process sensitive to the vulnerable situation of developing countries dependent on a few commodities and noted the painfully slow process in achieving progress on this issue in various international fora.
Commodities discussion at the WTO - The way ahead?
At the last meeting of the WTO Committee on Trade and Development on 16 and 23 October, WTO Members also discussed commodities of particular importance to developing countries. In particular, they debated a proposal from Kenya, Uganda and Tanzania (WT/COMTD/W/113, searchable online), tabled in May 2003 focusing on the problems posed by the long-term trend of declining primary commodities prices, and the need for action in the WTO to deal with the resulting crisis (see BRIDGES Weekly, 18 June 2003). Kenya suggested that the CTD should, inter alia, start examining in-depth the problems encountered by exporters of primary commodities, and that the matter should be dealt with expressly in a special session of the CTD involving other relevant WTO bodies, such as the Committee on Agriculture, the Negotiating Group on Non-Agricultural Market Access, the Working Group on Trade, Debt, and Finance, as well as the Working Group on Trade and Transfer of Technology.
The response from the major trading powers was “cool, at best”, one observer noted. The US, Canada and the EU argued, amongst others, that primary commodity prices were dependent on market forces, which are difficult to interfere with, and improving the market situation for primary commodities was primarily a question of competitiveness, diversification and encouraging investment. This argument, however, was countered by one African delegate who pointed out that developed countries used supply management tools to ensure stable and profitable prices. Concluding the meeting WTO Members instructed the Secretariat to prepare an inventory of studies on the issue. Chair Habib Mansour (Tunisia) indicated he would undertake consultations on how to proceed. The next meeting of the CTD is scheduled to take place on 27 November. The proposal from developing countries on primary commodities as well as a specific proposal on cotton was also discussed at the Cancun Ministerial meeting of the WTO, but — as was the case with many other issues — little progress was achieved (see BRIDGES Daily Update, 15 September 2003).
Additional Resources
For a more in-depth account of the CTD meeting see: BRIDGES Weekly, 23 October 2003.
ICTSD reporting; “U.N. Urged to take action on commodities markets,” U.N. WIRE, 28 October 2003; “General Assembly Panel Hears Call For Enhanced, Equitable, Predictable Market Access For Key Commodities From Developing Countries,” U.N., 27 October 2003.