UNCTAD after Cancún

Mr. Secretary-General, on behalf of the Editorial Board of UN Special, thank you very much for agreeing to this interview. As you have just returned from the WTO Ministerial Conference in Cancún, Mexico, we appreciate this opportunity to discuss with you what happened there.

What is your reaction to Cancún?
I don’t think the negotiations should be termed a failure. They were of course dissatisfactory, in that they did not succeed in producing a consensus. But I would say that if we can draw the right lessons, from now on we will be able to negotiate on a more realistic basis. Nonetheless, those responsible for the content of negotiations should now take seriously a newly emerging reality – a common stance in the developing world. There certainly are differences in the concerns and interests of developing countries, but at Cancún they were able to come together and present common positions, not in the form of a declaration, but on very specific matters like agriculture.

Why a turning point at this time, after so many years?
There are many possible explanations, but I would highlight two. The first is that the GATT gave way to the WTO, which is an organization with a vocation for universal membership. The nature of the organization changed. In the old GATT you had about 40 member countries; now, with the accession of Cambodia and Nepal, you have 148 to 150. China is already a member; it will be followed one day by Russia, Saudi Arabia, Iran and Algeria. So the organization is no longer the same. And the second explanation is that agriculture has been marginalized for too long from the system, remaining largely out- side the multilateral disciplines for almost 50 years, and the rich countries have been slow in accepting its inclusion in the negotiating agenda. Developing countries’ expectations of some concrete progress on this were frustrated by the stance of developed countries, particularly the Europeans and the Americans, in this field.

Were you not disappointed as well?
I am frustrated, and I am not among those who rejoice at the lack of success of the negotiations. The fact that we are likely to miss the deadline, and that the level of expectations has had to be lowered, is no cause for rejoicing.

Don’t you think that some industrialized countries might feel that the WTO is becoming a sort of UN, where you have a group of developing countries that can impose things – which was not the case with the GATT – and that might be tempted to create a super-WTO somewhere else?
If you create an organization with a universal vocation, its structure must be similar to that of the UN – not because the UN model should necessarily predominate, but because all universal organizations are based on the notion of a democratic decision- making process. The only exceptions I know of are the international financial organizations, the IMF and the World Bank, where voting weight is determined by capital quota. That could theoretically be acceptable in a bank, but not in an organization where you have to establish rules of universal applicability. It could be argued that the weight of countries in international trade should make a difference, which would be correct if such an organization dealt only with trade matters. But the WTO has begun looking into areas that had hitherto been left to the domestic sphere, such as intellectual property, investment rules, environmental questions and labour rights. Under the circumstances, how can you deny the principle of «one country, one vote» when your decisions affect peoples’ lives?

What is the impact on UNCTAD?
There is a widespread misperception that UNCTAD was formerly a trade negotiating body that lost its role when the WTO came into existence. But this is very much a misperception. At the time of the GATT, what UNCTAD did was to tackle commodities – which were never covered by the GATT. They should have been part of the international trade organization called for by the Havana Conference of 1947-1948 but which never came into being. Commodities were thus outside the scope of the GATT, which is why UNCTAD took them up. But UNCTAD never negotiated trade rules. What UNCTAD tried to do was to promote the need for a more balanced, more just trade system. It was in UNCTAD that the General System of Preferences for developing countries was agreed upon by the international community. Once the WTO was established, UNCTAD’s role became even clearer, that of trying to bring some ethical element into the trade system; and this ethical element was the idea of justice or fairness. Moreover, WTO members have agreed that we should try to bring a development element into the system, an objective which is at the heart of UNCTAD’s philosophy.

What do you want to achieve at the next UNCTAD conference?
The answer to this question is linked to the foregoing. My vision for the future is to focus on the productive side. Why? Because I feel that the role of the trade negotiations has been overemphasized. Although these negotiations are extremely valuable, the most they can achieve when they are successful is to create export opportunities. What usually happens is that a few countries are the real beneficiaries of such opportunities because they are competitive and have a good supply capacity. Others, particularly in Africa, do not gain very much from the negotiations, because they have only a few products in which they are competitive. So we should help them diversify away from excessive reliance on those products; and we must also look at the supply-side constraints, because if you don’t have enough goods and services with the quality and the price necessary to compete in the marketplace, then trade negotiations will not do much for you. And this is the centrepiece of our conference in Brazil next year.

You have been heading UNCTAD for eight years. How do you assess the results achieved by the organization during this period?
Many of the points that had previously been advocated solely by UNCTAD are now also advocated by the World Bank. Criticizing rich countries’ protectionism in agriculture and textiles was not something the World Bank did eight years ago; but UNCTAD has been asserting this for 30 years. Today every- one is talking about the dangers of pre- mature financial liberalization, but UNCTAD has been saying that far longer, and was alone in saying it, ever since the fall of the Berlin Wall. Simi- larly, for a long time we were the only ones to highlight the trade asymmetries affecting African countries and the least developed countries (LDCs).

Mr. Secretary-General, you have in the past, even before Cancún, com- mented on agriculture subsidies in advanced countries. Do you believe this is a crucial issue for future trade negotiations and for UNCTAD?
Although we see the point of the developing countries that want to liberalize agricultural trade, we also see the difficulties of some developed countries that fear outright liberalization in this field. In the case of the poor, net food- importing countries, the only concrete proposal to have been put on the table was technically prepared by UNCTAD, and it contained concrete ideas on how to give those countries compensations and instruments to deal with this problem. So our role in agriculture is not one-sided. It is intended to balance the interests of all parties, not only of those who want to liberalize agricultural exports.

Does this mean that UNCTAD will not include agriculture in its agenda for negotiations?
It is the WTO that is the negotiating forum. We can provide ideas, inputs and suggestions as to how this can be tackled, but they have to be agreed to in the WTO.

One of the most important messages of the anti-globalization protesters in Cancún was to “take agriculture out of the WTO talks”. Is this because it could aggravate poverty in developing countries? What do you think of this proposal?
It would make no sense to exclude agriculture. What should be done is to implement trade liberalization in agriculture in a way that will not crush the small farmers. More than 80 per cent of the rich countries’ subsidies go to large corporations, rich farmers, and not to small farmers. The problem thus lies with the large agricultural companies that are flooding the world market as a result of those subsidies.

Do you believe that globalization works for everyone?
In my opinion, «globalization» should mean more than the unification of markets and of the economic basis for investments and financial flows. It should also involve facilitating human contacts and understanding based on progress in telecommunications, which helps different cultures to understand one another’s values. But this is not what is happening: globalization in its current form works only for those who can take advantage of their superiority in finance or technology.

The Doha Development Agenda – is it really a development agenda?
I understand why people use the phrase «development agenda». I have always refused to do so, however, because I withhold judgement. I felt that the expression «development round» was a public relations idea cooked up after Seattle, but I have always disagreed with it and expressed that disagreement in public. I disagree because I think it can create unrealistic expectations, and indeed this is just what is happening.

The WTO now also appears to be involved in technical cooperation, and this is an area on which you and they have just signed an agreement. How does this help developing countries?
There is a good division of labour on technical cooperation among the three Geneva-based trade organizations: WTO, ITC and UNCTAD, each of us dealing with a particular aspect. Even under its previous incarnation as the GATT, the WTO has traditionally dealt with divulging and explaining the rules and agreements, and with how to implement them from a legal standpoint. The ITC explains to businesses how entrepreneurs can benefit from the trade rules. And we at UNCTAD try to help governments, particularly of developing countries, develop local capacity to formulate trade negotiating positions. This is something that the WTO does not and cannot do, for one simple reason: as the organization that services the negotiations, it cannot be seen as taking sides or advising countries on tactical moves. Whereas UNCTAD can, because we are not servicing the negotiations.

I read on the WTO website that WTO Ministers approved Cambodia’s and Nepal’s membership. They are the first LDCs to join the organization. Why are there not more LDCs in the WTO? What is the problem with the accession process?
NCTAD has long been alone in asserting how scandalous it is that, almost 10 years after the WTO’s establishment, no LDC has been able to join, as a result of a difficult accession process and because too many demands are being made on weak countries. The Cambodian trade minister in Cancún told the audience about the torture his country had undergone to achieve accession. We have been saying for years and years that new rules would be needed. And finally, after we pointed out that the WTO would soon observe its tenth anniversary without one LDC having joined, they decided to speed up the process for Cambodia and Nepal. I am proud to say that both these countries were supported from start to finish by UNCTAD and the UN system. In their statements at Cancún, the ministers of both countries acknowledged this, naming UNCTAD as the organization that had provided the most support.

Do you think this has opened the door for more LDCs to join the WTO?
I hope so. But as I said, this was not an easy process; it took each of the countries five to six years. I have been in this system too long to be very optimistic.

Interview by Jean Michel Jakobowicz and Seble Demeke, UNOG.