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    What After Cancún?

     

     
     
    © International Trade Centre, International Trade Forum - Issue 3/2003

    For multilateral trade negotiations to be relevant to developing and transition economies, there must be a greater focus on supply-side issues. To help countries become more competitive in global markets, there is a greater need than ever for practical, trade-related technical assistance. We also need to encourage South-South trade, currently the most promising area for trade growth among developing countries.

    At the halfway point - timewise - of the Doha Development Agenda challenge, the recent WTO Ministerial Conference (Cancún, September 2003) revealed the full scope of differences that must be harmonized for multilateralism, the only way forward for trade, to prevail.

    Equally important, the recent trade talks brought in focus how important it is for developing and transition economies to overcome supply-side constraints, if they are to remain interested in WTO. Renewed efforts in trade negotiations to achieve a broader and fairer arena for trade are, of course, a must. But they alone will not generate any exports for the developing world. To benefit from the multilateral trading system, developing countries must have goods and services to export, and the ability to export them.

    Developing countries, which form a majority worldwide, hold only a 34.5% share of world trade. Worse, the world's 49 poorest countries account for a very marginal share - 0.6% of total world trade. Will these countries continue to be interested to invest their energy and limited resources in trade talks if they do not foresee the day when they will have competitive goods and services to export? Trade talks are about negotiations, which means give and take. The more advanced developing countries and economies in transition understand this, and are playing the game with increased vigour. Because they have competitive export goods and services, they see what they stand to gain or lose from trade talks. Is this true for all developing and transition economies and, if not, what needs to be done to keep them interested in trade talks? Seen from our perspective at ITC, two types of initiatives have to be put to work more aggressively: trade-related technical assistance and South-South trade.

    More trade-related technical assistance

    Small and medium-sized enterprises (SMEs) form the backbone of many economies. Despite the reality of today's globalized markets, SMEs are often inexperienced in foreign trade. They need the capacity to meet international standards, conduct market research, package their goods properly, use ICT to support their sales efforts, find out about trade rules and laws, handle export documentation, find access to finance… and many other trade support services which are readily available in the North, but not in the South. To help these countries develop the competitive export base they need, extending trade-related technical assistance to trade support institutions of the South can make a real difference.

    Developing countries and economies in transition often have weak private sectors with little inclination to work with their national public sectors. The two sides often operate in parallel, instead of coming together in bold, cohesive national teams for economic development through trade. Only the most enlightened countries do so.

    Although not easy, all countries need to marry the vision of the public sector with the drive, imagination and creativity of the private sector. More developing and transition economies need to tackle jointly the job of developing and implementing sectoral export strategies, as well as more ambitious national export strategies.

    Beyond reaching out to the public sector to help strategize for exports, the private sector also needs to become more aware of how important it is to team up with their trade negotiators to influence national trade negotiating positions. Business advocacy for trade talks is a "must" to ensure that governments do not agree to trade rules under which private firms cannot do business.

    This is true both for the North and the South, but in the South, business and government rarely work together on positions for trade talks. In this regard, ITC was encouraged to see that 49 of the private sector participants to its latest Executive Forum, held in Cancún just prior to the WTO Ministerial Conference, were invited to join their national negotiating teams. This was a first, according to several of those involved.

    Trade-related technical assistance can go a long way towards helping countries develop SME export skills, design competitive national and sectoral export strategies, and strengthen the private sector's contribution to trade talks. ITC has been working in these specific areas and has a full range of programmes to develop national capacities in them.

    Encourage South-South trade

    South-South trade presents unique opportunities for developing countries and economies in transition to enter the multilateral trading system. Markets of the South can be less difficult to enter than mature ones in the North. Besides, they offer more opportunities than most think. South-South trade, in merchandise alone, grew from 6.5% in 1990 to 10.6% in 2002. ITC, which has been very actively involved in South-South trade for over 15 years, believes that only a small portion of this market potential has been tapped to date. We facilitate matchmaking that has led to millions of dollars in new business deals in pharmaceuticals, textbooks publishing, automotive components, humanitarian supplies and many other sectors, and we are convinced that much more can be done.

    In summary, we believe firmly that trade negotiations have to be accompanied by stronger efforts on supply-side issues, for the multilateral trading system to continue to be of interest to developing and transition economies. Practical trade-related technical assistance and South-South trade can contribute significantly to the job at hand. ITC has been working in this field for nearly 40 years and continues to do all it can to be a better partner for export development.





    J. Denis Bélisle is ITC's Executive Director. For more information about ITC's relevant programmes, see "ITC and the Doha Development Agenda" on ITC's web site (http://www.intracen.org).