Bridges Weekly Trade News Digest • Volume 6 • Number 3 • 29th January 2002
Trade Commitments Thin For Developing Countries In Financing For Development Text
Following lengthy informal consultations over the weekend, government delegates on 27 January agreed on a draft text of the "Monterrey Consensus" for the Financing for Development (FfD) conference scheduled for 21-22 March, in Monterrey, Mexico. The document recognises the need for greater financial assistance to raise the living standards of the poorest countries, but does not set any firm goals for increasing aid, relieving most debt burdens or removing trade barriers. The FfD event is a summit-level meeting to address key financial issues related to global development.
Except for more help for the poorest of the poor — the officially recognised Heavily Indebted Poor Countries — there is little in the Monterrey Consensus of what developing states requested on debt or trade, said co-chair of the consultations Ambassador Shamshad Ahmad of Pakistan. Regarding the developing states’ hope that "there has to be equitable trade," Ahmad said, "There was not sufficient commitment on that."
Instead, in the section entitled "International trade as an engine for development", the Monterrey Consensus focuses primarily on supporting decisions reached by WTO Members at the Fourth Ministerial Conference in Doha, Qatar, last November. The document gives its support to a "universal, rule-based, open, non-discriminatory and equitable multilateral trading system," and reaffirms countries’ commitments to trade liberalisation. There is little in the way of commitments to issues of concern to developing countries in trade; instead, the text notes that the signatories "acknowledge" the issues of particular concern to developing countries — such as technical barriers and sanitary and phytosanitary measures, tariff escalation, and non-tariff barriers — "to enhance their capacity to finance their development."
Developed countries that have not already granted duty and quota-free access for LDC exports are "called on…to work towards" this objective, but there is no commitment to do so. The EU on last year agreed to allow qualified duty and quota-free access to its market for LDCs, with phase-in periods for bananas, sugar and rice (see BRIDGES Weekly, 30 January 2001).
Although the Monterrey Consensus recognises that "a substantial increase in ODA [official development assistance] and other resources will be required if developing countries are to achieve the internationally agreed development goals and objectives," it does not endorse UN Secretary-General Kofi Annan’s call for doubling ODA from $US50 billion to $US100 billion per year.
Near the end of the negotiations, nongovernmental organisations warned that the delegates were heading for "a lacklustre outcome." In a statement, 18 European NGOs protested that governments were "introducing precise language whenever developing countries are concerned, while insisting on vague niceties when it concerns Northern governments or international financial institutions." African NGOs said they were "deeply concerned by the developments…which are undermining the values and principles of equality, solidarity and shared responsibility of the Millennium Declaration." The Millennium Declaration was issued at the General Assembly’s 55th session in September 2000.
Other topics covered by the document include: confronting the challenges of Financing for Development: a global response; mobilising international resources for development: FDI and other private flows; increasing international financial and technical cooperation; and external debt.
The concluding session of the final Preparatory Committee session will be held in the coming days to allow formal adoption of the document and its transmittal to the March Conference.
According to the FfD website, the heads of the World Bank, IMF, and WTO have agreed to co-chair the summit roundtables.
A final unedited version of the Monterey Consensus is available on the FFD website at: http://www.un.org/ffd.
"DEVELOPMENT: Financing Conference Committee Issues Document," UN WIRE, 28 January 2002; ICTSD Internal Files.