/* Written 7:01 pm Mar 1, 1994 by [EMAIL PROTECTED] in igc:intl.economics */
/* ---------- "Speech by Outgoing G77 Chair" ---------- */
From: Third World Network <twn>
G77 CHAIRMAN CRITICISES URUGUAY
ROUND OUTCOME AS AGAINST THE SOUTH
-------------------------------------------
In his speech as outgoing Chairman of the Group of 77 (a
negotiating grouping which today encompasses over a hundred
developing nations), Luis Fernando Jaramillo of Colombia presents
a sweeping critique of North-South relations. He traces the
decline of the Third World in global affairs and the rising power
of the Northern-controlled Bretton Woods institutions at the
expense of the United Nations and multilateral processes. He
concludes his review with a sharp analysis of the recently
concluded Uruguay Round which he says provides a clear example
of how the South has lost out in global relations.
The following is the text of the speech presented in New
York in January this year:
ALMOST 30 years ago, when the Group of 77 was founded along with
UNCTAD, multilateralism had a favourable climate and the
international agenda was more and more responsive to the
inclinations and needs of the developing countries. Today that
context is markedly different. We have to face a much more
complex and difficult environment.
In contrast to the euphoria created by the end of the Cold
War, the changes in Eastern Europe, the reforms of economic
liberalisation, the new concepts of sustainable development and
the conclusion of the Uruguay Round of GATT, the developing
nations continue to face, at the dawn of the 21st century, a
hostile international environment and a loss of economic and
political standing in the so-called New World Order. While it
is true that some progress has been observed in some developing
countries, the list of adversities remains and in many cases has
grown. The welfare of the majority of our peoples is either
non-existent or stagnant at best. The deterioration of our human
resources continues to be more pronounced.
Despite signs of sustained growth on the part of some Asian
countries and that several Latin American nations show certain
symptoms of recovery, the general outlook for the developing
countries continues to be uncertain and unstable. In the case
of the African countries, the situation is sorrowful. There
underdevelopment has its most alarming expression. There, human
suffering has reached dimensions unknown in other parts of the
world. It is there where the most chronic process of
pauperisation can be observed. Far from being overcome, it has
grown worse. It is expected that in 1994 once again the rate of
economic growth will be below the rate of growth of the
population. If these trends are not reversed, want, hunger, war
and all its painful consequences will continue to be observed.
We fail to understand why the international community does not
take the measures nor allocate the resources necessary to help
the African countries face the acute crisis they are
experiencing. The international community is responsible in great
part for this crisis.
The dramatic changes that continue to occur in shaping a new
world structure of power make our work much more complex.
Instead of the so-called New World Order, we are witnessing the
emergence of sources of profound economic, political and social
disorder. In several countries new and obscure anti-democratic
forces have emerged. At the same time, developing countries
continue to be subjected to constant pressures to weaken or
abandon our collective interest for constructing a truly free and
just world. In the new balance of power, the relative situation
of the developing world has worsened ostensibly. Any dissent of
our countries from the position of the countries of the North is
now labelled as confrontational, even by ourselves. In practice,
we have less political influence and less priority in the
international agenda.
For years the Group of 77 has been involved in intense and
complicated negotiations with the developed countries which have
varied from the most minute issues, many a times of little
consequence, to the definition of grand strategies and global
development programmes. In truth, many of these have ended up
as simple reference literature or have served to enlarge the
archives of the United Nations. Whether consciously or
unconsciously, the Group has accepted to be submerged in a scene
of linguistic negotiations, procedural discussions, grandiloquent
discourses and in the elaboration of an immense volume of
resolutions, many of them having little, if any practical effect.
Frequently we find ourselves lost in the trees without the
perspective of the forest. The limited real impact and the
scarce results in favour of the developing world bear no relation
to the magnitude of efforts and the attrition of negotiations.
No matter how excellent the conduct of the Chairmanship of the
Group is, the concrete effects of its work are practically
imperceptible.
Closed decision-making circles
In the meanwhile, the strategy of the developed countries
continues to be clearly directed at strengthening more and more
the economic institutions and agencies that operate outside the
United Nations system. Many subjects that are vital for the
international community and the Third World are kept out of the
purview of said system and taken to closed decision-making
circles. Such is the case of the Group of 7, a forum in which
the interests of the developing countries have either been taken
into account marginally or been completely ignored. The Group
of 7 has only been concerned with promoting a North-North
dialogue. It has not had the developing world as its
interlocutor.
The Bretton Woods institutions for their part continue to
be made the centre of gravity for the principal economic
decisions that affect the developing countries. We have all been
witnesses to the conditionalities of the World Bank and the
International Monetary Fund. We all know the nature of the
decision-making system in such institutions. Their undemocratic
character, their lack of transparency, their dogmatic principles,
their lack of pluralism in the debate of ideas and their
impotence to influence the policies of the industrialised
countries. We all know the way in which structural changes are
imposed and how projects are formulated. And how subsequently,
when many of those policies and projects fail, their authors
disappear from the facilities of Pennsylvania Avenue. Nobody is
then accountable for anything.
This also seems to be applicable to the new World Trade
Organisation. The terms of its creation suggest that this
organisation will be dominated by the industrialised countries
and that its fate will be to align itself with the World Bank and
the International Monetary Fund. We could announce in advance the
birth of a New Institutional Trinity which would have as its
specific function to control and dominate the economic relations
that commit the developing world. Even the designation of the new
institution as World Trade Organisation was rejected at the last
minute in the Uruguay Round. This seemingly nominal change
conceals a different intention. The institutional reform of GATT
is directed at bringing about, in the area of trade, a further
weakening of the United Nations, the only multilateral mechanism
in which the developing countries can have some say.
Therefore, there is an evident trend to systematically
limit the role of the United Nations as an economic forum. Its
capacity continues to be eclipsed and eroded by the
aforementioned institutions. But the problem is not only
expressed in the imbalance with the latter. The internal
functioning of the Organisation is also subjected to continuous
demands to devote greater efforts to peacekeeping operations and
security in detriment of its functions and responsibilities in
the area of economic and social development.
As a result of the above, there has been a progressive
reduction in the effective capacity of the Group of 77 to exert
influence on the international centres of economic
decision-making and to deal with the unilateral practices of the
developed countries. No institutional economic forum exists in
which decisions are adopted on the basis of discussions and
negotiations that incorporate the aspirations and interests of
the developing countries. Nor does a forum exist in which the
industrialised countries make effective commitments before the
international community in the area of coordination and
stabilisation of their macro-economic policies.
The lessons learned from the UNCTAD Conference in
Cartagena, the Rio Summit, the last meetings of the General
Assembly, the conclusion of the Uruguay Round and other recent
negotiations, show the critical importance for developing
countries of having a collective strategy available to them. We
must recognise that the Group of 77 lacks an elaborated and
comprehensive position which responds both to the specific issues
as well as to the more general problems of the international
agenda. On many occasions the position of our countries comes
about as a reaction to the initiatives and unilateral moves of
the industrialised countries and of the institutions that are at
their service.
We are fragile to pressures and weak to the appeal of
particular interests and aspirations. Many a time we fall in the
temptation of rhetorical discourse as a pretext for not harming
resource flows from the North or bilateral preferential
treatments. The industrialised countries and their institutions
know this vulnerability and this ambivalence very well. They are
used to establish new conditionalities, to interfere in the
domestic affairs and to transfer the international responsibility
over to the national policies of the developing countries. In
the meantime, the developed countries elude their own
responsibilities. Their policies, despite the profound impact
they have, remain outside the sphere of influence of the rest of
the countries which make up the international community.
The Group should articulate a global strategy that may
enable it to respond adequately to changes that take place in the
world scene and which may translate into true negotiating
capacity. Otherwise we will progressively continue to be
marginalised from the real world and our influence on the latter
will continue to be virtually non-existent. A key component of
this strategy should be the review of the functioning of the
Chapters of the Group of 77. Up to now the latter have acted in
a dislocated manner and without clear goals, which is reflected
in the weakness of their positions and in their lack of
continuity and dynamism. The disadvantage of the developing
countries ultimately resides in the lack of a firm political
platform. This is an issue which should be discussed in depth
urgently in a Ministerial Summit of the Group. This cannot be
put off.
International economic relations are most definitely power
relations. It is not easy that the countries which exert control
in the prevailing international system accept reforms aimed at
correcting the prevailing economic and institutional
inequalities. Only the determined joint action by the countries
of the South, based on clear development policies, a better
utilisation of their resources and capabilities and a solid
strategy of economic cooperation, may offer possibilities for
changing the current system of relations.
In its 30 years of existence, the Group of 77 has striven
to defend the interests of its member countries. Yet the voids
are noticeable. There is still a long way to go. Our main duty
is to build and preserve the unity of the developing countries
and to accommodate its different concerns and aspirations without
jeopardising the basic objectives of the Group. The strength of
the latter must rest on the clarity of its objectives, the
effectiveness of its mechanisms, its unity and its internal
cohesion. Only in that way will it be more real and less formal.
The Group of 77 has an enormous potential for making use of its
influence. Therefore, our duty is to persevere in the efforts
to achieve its effective consolidation. The celebration of the
30th anniversary of the creation of the Group of 77 represents
a particularly valuable opportunity for an in-depth review of its
role and the formulation of concrete institutional proposals to
give it new legitimacy and energy.
The remainder of the present decade will be decisive for
the Third World. The Agenda for Development and other related
issues dealing with cooperation, growth and the development of
our countries will define, in one way or another, the course of
relations with the developed countries and our participation or
non-participation in the benefits of the world economy. We must
be cognizant that if the Group of 77 does not respond adequately
to these challenges, the consequences will be a source of new
frustrations and despair. We should not spare any effort to make
the Group a united and strong front around basic principles and
a different strategy. It is the duty of all to strengthen it and
to work with the necessary creativity and commitment to move from
the abstract discussions to specific achievements. Otherwise we
would have failed history, and worse yet, we would have failed
those numerous peoples and billions of beings who place their
hopes in the construction of a more just, equitable, democratic
and free world.
The manner in which the negotiations of the Uruguay Round
of GATT were conducted is a clear example of the weakness of the
developing world. As we noted in our recent statement to the
Second Committee of the General Assembly on the issue of Trade
and Development, the scheme of negotiations that dominated the
Uruguay Round was fragmentary and lacking in transparency. The
industrialised countries concentrated on making their own deals
in negotiations that took place outside normal channels. Their
strategy was to arrive a few hours before the deadline for the
completion of negotiations with an agreement that was presented
as a fait accompli to which the developing countries had no
choice but to accept it without any change. To the disconcertment
of the developing countries was added their lack of organisation,
the clear inclination to resolve their own individual problems
first and even the emergence of contradictory positions among
them. In Geneva our countries negotiate individually on their
own, without a holistic vision. Of course, in such a scheme the
most adversely affected are the weakest countries.
Unquestionably, the developing countries are th e losers both
individually and collectively.
The Uruguay Round is proof again that the developing world
continues to be sidelined and rejected when it comes to defining
areas of vital importance for their survival. In said Round the
developing countries, which are the overwhelming majority in
GATT, a fact that seemed to have been of no good, limited
themselves to wait and observe.
Despite insisting that the negotiations were global in
character, the countries of the North refused in the end to
accept any discussions, even bilaterally, with the countries of
the Third World. Our negotiators were frustrated in their
attempts to find interlocutors among the partners of the North.
They found themselves alone in the corridors and rooms of GATT
with the only hope to have access to information on the
negotiations that were taking place. The lack of negotiating
leadership on the part of the countries of the South, their
disunity and their fear of generating antagonistic positions
against the industrialised countries were taken advantage of by
the latter which led the Third World to confine itself to a role
of passive spectator of the decisions adopted. It seems that the
developing countries have forgotten that in a negotiation process
only those who have negotiating leadership count, those who
defend with courage their principles and their positions. Let's
see how that got reflected in several of the areas of decision:
One of the principal issues for the developing countries,
that of bilateral negotiations on market access, was left
unresolved. The countries of the Third World have been put in a
situation in which they already paid the price of accepting the
new terms in different areas of interest for the industrialised
countries, without obtaining in exchange satisfactory conditions
of market access. It will be difficult to expect that the
developed countries will be ready to enter into a substantive
negotiation by the agreed deadline of 15 February 1994 to allow
for the introduction of necessary adjustments and correctives,
since there is no incentive nor interest for doing so.
The modalities and commitments in the area of reduction
of agricultural subsidies and the tariffifcation of the
instruments of market access in this sector show that the
reduction will take place in a proportion and at a rate well
below expectations. The impact on prices would be reflected in
the year 2000. The developing countries will continue to be
subjected to the effects of the huge agricultural subsidies
applied by the industrialised countries and to quantitative
restrictions that prevent them from capitalising on their
markets. In some cases, the only result achieved was a marginal
increase in the import quotas which was offered in exchange for
export countries giving up on their demands against those
restrictions which violated GATT.
With regard to the termination of the Multi-Fibres
Agreement, projected for the year 2005, it should be borne in
mind that it derived from the commitment made at Punta del Este,
which assumed a termination without reciprocity. A minimum
compensation to export countries was implicit following thirty
years of discriminatory measures in that sector. The developing
countries had to absorb, however, a high price in other areas of
negotiation. According to the agreed terms, it may be expected
that the industrialised countries will maintain restrictions on
textiles and apparel until at least the seventh year of the
decade foreseen for the termination of the Multi-Fibres Agreement
and that in the case of sensitive products, which happen to be
the ones of most interest to our countries, those restrictions
will be maintained until the last year. It is not unlikely that
new attempts will be made to perpetuate them.
Some developed countries exerted until the last minute
pressures to amend the provisions on antidumping measures. The
interest of the majority of importers is none other than
preserving the discretion of their national authorities and
maintaining control of their markets against competing
commodities, particularly those from developing countries. As
a result, and despite the improvements introduced, the objective
of achieving a multilateral trading system based on clear and
transparent rules which would give security to export countries,
faded for the most part. Once again, the market economy in which
the most efficient, the best quality and the best prices prevail,
was soundly defeated.
The special and differential treatment to developing
countries provided for by the Punta del Este Declaration was
object of permanent distortion during the Uruguay Round. The
results of the latter should be evaluated in order to verify the
application of such treatment and to introduce, if necessary, the
pertinent correctives. To that end, the Secretariat of GATT
circulated last December a document which was regarded by many
delegations as weak and anachronistic. The document in question
is based on the Draft Final Act of December 1991. It does not
take into account, for instance, two years of negotiations.
While it purports to be illustrative of econometric
projections on the effect of the Uruguay Round on the trade and
income of developing countries, it is dispersed and confusing in
the assessment proper of the commitments made at Punta del Este.
In the end, the developed countries have been the ones to benefit
from special and differential treatment. They have been allowed
to keep subsidies, such as in the agricultural sector, and
quantitative restrictions, such as in textile and apparel trade.
Developing countries have received little or nothing as far as
special and differential treatment is concerned.
It is clear, on the other hand, that in accordance with
existing exportable supply, the tariff reductions which
developing countries could take advantage of, apart from being
inferior to the ones initially foreseen, are proportionally less
deep than the tariff reductions that will benefit trade among
developed countries. According to some estimates, the
industrialised countries, which make up only 20% of the
membership of GATT, will appropriate 70% of the additional income
that will be generated by the implementation of the Uruguay
Round.
It would seem that this quick overview does not allow one
to conclude that the Uruguay Round will translate into a positive
balance to developing countries. While the results were
insufficient in several crucial areas of interest to our
countries, and in some cases those results remain to be
clarified, the concessions granted to the countries of the North
are notorious. To cite but one example, the concessions granted
in areas such as intellectual property, investment and services.
After the frenzy over the conclusion of the negotiations
passes, time will confirm which countries will really benefit.
For the time being, it can be affirmed that the conclusion of the
Uruguay Round will not lead by itself to the abolition of managed
trade, unilateral and bilateral restrictive measures and all
types of protectionist practices which were supposed to fade
away.
I paused to refer to the GATT negotiations not only
becasue of the current nature of the subject and because of the
lessons it teach us regarding the treatment received by the
countries of the Third World, but because of the transcendence
that trade exchange has for our countries. Neither official
development assistance, nor technical assistance, nor credit
resource flows, nor any other aspect of international cooperation
match the paramount importance and determinant nature that trade
has for the developing world.
Luis Fernando Jaramillo is Permanent Representative of Colombia
to the UN and was Chairman of the Group of 77, until January
1994. He was also formerly Foreign Minister of Colombia. -ends-
