UNCTAD´s Secretary General addresses the first UK World Trade Week

UNCTAD Secretary-General Supachai Panitchpakdi addressed participants at the International Conference on Trade, in London, United Kingdom, on 8 June, which was the opening event for the first World Trade Week UK, being held from 8 to 12 June 2009.

The Secretary-General pointed out that developing countries are among the most open in the world today. Openness - as measured by the ratio of developing countries' goods exports to gross domestic product (GDP) - increased from 26 per cent in 1995 to 51 per cent in 2007. The same ratio for the least developed countries (LDCs) showed an even larger increase - from 17 per cent to 45 per cent. Owing to such openness, developing countries have suffered greatly from the global economic crisis, through depressed international trade and investment. This raises the question not just of further openness, but of how to make effective and operational use of openness.

Firstly, the Doha Round should be revived. Countries must be decisive about delivering on the development agenda and even harvest some of these elements, such as duty-free quota-free treatment for LDCs' exports, Aid for Trade, the cotton issue, the banana issue and trade facilitation. Non-tariff barriers, especially unjustified product standards that disrupt trade, should be avoided.

Secondly, trade among developing countries is still growing. Such growth performance is due to the fact that they are trading in relatively cheaper products that are affordable for the income levels of developing countries, which average around $2,700, as compared to about $38,000 in developed countries. Thus, strengthening South-South trade, especially through regional economic integration processes, is important. In this connection, the economic partnership agreements that are being negotiated between the European Union and African, Caribbean and Pacific (ACP) States should help to promote - and not undermine - regional integration among ACP States.

Thirdly, trade financing is critically important to making trade flow smoothly. The G20 meeting in April agreed to provide $250 billion of trade finance. A key question that arises is how this financing will be allocated among developing countries in Africa, Asia, Latin America and the Caribbean. One avenue that could be considered is the Basel II exercise, with some relaxation of the conditions it attaches for release of trade-financing funds.

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Source:UNCTAD