`UNCTAD X could be the healing process after Seattle’ Sheila Mathrani
UNCTAD X will be the first major international conference of the century and could help in the healing process after the failed WTO ministerial meeting at Seattle, according to its Director-General, Rubens Ricupero. Former Brazilian chief trade negotiator at GATT until 1991, who also held portfolios as minister of environment and, later, finance, Ricupero has been very vocal on the financial crisis in East Asia and Latin America. Rubens Ricupero speaks to Sheila Mathrani on the eve of the tenth UNCTAD conference starting at Bangkok on 12 February.
How would you assess the evolution of UNCTAD after Midrand in 1996, when developing countries saved it from being killed off by the industrialised countries who felt it superfluous after the foundation of the WTO? We said we would have to re-invent ourselves at Midrand, and now UNCTAD is consolidated as a knowledge-based institution, to help developing countries mostly in terms of multilateral negotiations on trade and investment, and concentrate on research and analysis and policy advice focused on a few areas absolutely vital for development. I believe that UNCTAD is back in strength in the trade area, an opinion that was surprisingly backed up by its previous critic, Fred Bergsten. At Seattle Bergsten called UNCTAD a highly respected organisation whose analytical reports were mandatory reading in trade circles. I have always put trade and investment together because I am convinced that success in export in trade is very closely related to countries’ investment policies. This does not necessarily have to be in terms of foreign investment, as the experience of some Asian countries show, for they are basically dependent on domestic intervention, not FDI, and have a strong link between profits and investment with an industrial basis. I hope this stand will be confirmed at Bangkok, and so enable us to continue on devoting our resources towards a positive trade agenda in commercial diplomacy, training for dispute settlement, and courses for preparing negotiators on investment agreements. We aim to strengthen institutions in developing countries in these areas to help them cope with negotiations, to avoid the mistakes of the past with the imbalances that have accumulated and have to be addressed. This can only done by countries but we can help them in their preparations. What do you expect from UNCTAD X, and what do you mean by referring to it as being a global parliament? I hope that at Bangkok UNCTAD can find the road map for development in the future. For instance, we can identify what the major obstacles are. I consider financial volatility as a prominent one; we must ensure that this nexus with investment helps in increasing the export capacity of developing countries. There is no doubt that the Seattle results would affect Bangkok, which no one now wants to see as failing. UNCTAD X will have three different dimensions. Firstly, the internal dimension concerning UNCTAD’s evolution, addressed in the previous question. Secondly, how can UNCTAD help in the process of trade negotiations in the post Seattle phase? That has to be basically addressed by governments. Thirdly, by engaging civil society in a dialogue on globalisation, where I visualise UNCTAD playing the role of global parliament. I believe UNCTAD can help the forward process in the Seattle stalemate, that of the problematique of developing countries, implementation problems and their concerns of liberalisation of interest to them such as the unfinished business of past Rounds. The meeting will convey a strong message that developing countries care for a rules-based system without giving up their concerns and priorities about the imbalances in the trading agreements. The trading system is not fulfilling its potential to be extremely useful because it is basically flawed. Now is the moment to address this question of imbalances once again. The conference could provide an informal opportunity for a healing process that is necessary after Seattle, after which there has been much bitterness between countries. It would be an opportunity for WTO Director-General Mike Moore to consult with and talk to ministers. I feel that Bangkok could also be the start of a world parliament for globalisation, where issues of a systemic global nature could be addressed. We have invited civil society to participate, and will be having meeting with them prior to the conference at Bangkok. Heads of important international organisations such as the IMF, World Bank and WTO will be there, which is unprecedented in the history of UNCTAD`s quadrennial meets. How would you visualise it? We have to try to develop a holistic vision of the how currency, finance, trade, investment, and technology all interact in development. UNCTAD has a stronger ethical commitment to developing countries and thus appeals to most NGOs who feel a greater affinity to us than other world organisations. In symbolic terms we are better poised than the WTO or the World Economic Forum. This view could be developed in a parliament for civil society in general which is a debating forum, and comprise not only NGOs, but corporations, academic institutions, trade unions, and other groups. Governments should not abandon them to the street level. They have to be invited in; otherwise their concerns will turn into frustrations, probably disaffection and violence. After the first anti-globalisation demonstrations in Geneva in 1998 followed by Seattle, people have been saying that something has to be done. However, nothing has been done so far; so UNCTAD is taking the first step. In future I plan to have a structured debate, with the engagement of all these groups, dealing with two or three difficult and complex topics, during the period when our Trade Development Body (TDB) takes place, to find whether we can evolve a minimum common denominator on the issues. UNCTAD has a definite advantage over other organisations because we have always been associated with poor and developing countries. What is your opinion on the call of some NGO groups that human rights have to be considered when trade decisions are being made? I totally agree. The implications of trade decisions on human rights and the environment have to be studied. We should not forget that socio-economic rights and the right to development are an integral part of human rights, but you have to see that these debates mean in concrete terms. Would you regard the Seattle meeting as a failure or was the outcome a necessity? It depends which way you look at it. There are many crises in many processes. Take the process of European integration; every time an important decision has to be made there is a crisis, but the crisis generally catalyses the solution. I feel that a crisis may be created when you have this catalytic power but it should not be permitted to become chronic and a stalemate. One should not become a victim of complacency. Seattle`s failure was a necessity because it made people aware of the problem for it would get worse if nothing is done. Do you think that LDCs and poorer countries have lost out on market openings, implementation at Seattle, by insisting on the WTO being a rules-based organisation? I think that countries who insist that they first need to have a rules-based organisation are right. There are two aspects to it. Agreed that they lost something in the sense that the Implementation problem was not settled. LDCs did not get the bound free market access, and we were not able to address the concerns of liberalisation of the multifibre agreement, etc. Sometimes it is better to lose something now, to get a better result later. Otherwise you have to accept more imbalances. But post-Seattle I think they should insist that they care for a rules-based multilateral system, but one which has to be more balanced than so far. The long list of imbalances have to be addressed — such as anti-dumping, countervailing duties, SPS which are generally used against exports of developing countries. Once again it is the old question of the unfinished business of the past round. We should aim at the resumption of negotiations in a positive atmosphere as soon as possible, provided that these negotiations are balanced. Have developing countries been too insistent on their implementation concerns being addressed first? Some countries did not realise what the implications of what they signed up to in the Uruguay Round would be, and in many cases there are rules whose effects only become perceptible when they have to be implemented. This is normal in international decisions. When you have difficulties in implementing decisions you have to address the questions. For example, there are many aspects in the TRIMS agreement which have reduced the flexibility of developing countries to adopt their policies in industrial competitiveness. In the long list of imbalances developing countries should insist particularly on those sectors that were kept out of the disciplines of the general agreements — such as textiles, clothing, agricultural products, sensitive products, tariff peaks, tariff escalations, etc. And you have to address the matter of rules. Issues should be dealt with issue-by-issue, and not case-by-case as proposed by some countries for you could possibly end up with something even worse, a pattern of decisions that will become incoherent because you will give to some countries what you deny to others. Do you feel a multilateral investment agreement is necessary for trade? I think that FDI is neither good or bad per se. It is acceptable if it brings you capacity to export, or improves your technological base or facilitates your market access. The problem is how can you be sure that in a negotiation you will not be pressurised to give away the instruments to make sure that those things happen. Countries should attract foreign direct investment and should give all their assurances that they will respect FDI. But countries should not give up their flexibility in policy-making because, otherwise, they would lose control over their own economy. This is the point. In case negotiations in this matter are sufficiently flexible — such as in the case of services — I am in favour. If however they intend to be a repetition of TRIMS, I am against.
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