The formal opening of the Rio Trade Week was marked by high-level addresses on one of the key sub-themes of the UNCTAD XI Conference, "Assuring development gains from trade". The speakers focused on elements of national development and business strategies that are required for developing countries to seize emerging opportunities in international trade.

The Minister of Agriculture of Brazil, Mr. Roberto Rodrigues, pointed to the fundamental development role that could be played by agriculture in improving the distribution of wealth by granting developing countries better access to international markets under conditions of fairer competition from developed countries&apo; producers. While rich countries could afford to pay not to produce, poorer countries had to produce to pay their way. He insisted that closing the income gap between rich and poor countries by deepening the opening of world trade in agriculture would contribute to preserving democracy and peace.

The Secretary-General of UNCTAD, Mr. Rubens Ricupero, said that the Rio Trade Week would provide valuable inputs to UNCTAD XI. He stressed the role that UNCTAD had played since its creation 40 years earlier in emphasizing the fundamental role of the competitive supply capacity in determining the performance of an economy and promoting the importance of international markets. He stressed the need to invest in technology and promote economy-wide innovation to ensure sustained growth. This demonstrated the need for policy makers to avoid thinking that access to international markets was the only component of export performance. While access to markets was obviously important and could be tackled through negotiations, it did not require the same investment and strategic vision as the development of supply capacity.

The President of the Fundação Getulio Vargas, Mr. Carlos Ivan Simonsen Leal, underlined the difficulties that Brazil had been facing in its integration into the process of globalization. These difficulties had arisen mainly from capital shortages, technological shortcomings and a long reaction time to a constantly evolving world economic climate, with a consequent increase in the costs linked to adjustment.

The keynote address of the opening colloquium was given by Mr. Mauricio Botelho, President and Executive Director of EMBRAER, who focused on the factors for the success of Embraer, and how these could be used in other countries and sectors. Embraer was world&apo;s fourth largest aircraft manufacturer behind Boeing, Airbus and Bombardier. It was Brazil&apo;s largest exporter from 1999 to 2001 and the second largest in 2002. It was present in 58 countries and had production facilities in the United States, France, Australia, China and Singapore, as well as in Brazil.

Mr. Botelho noted that the aeronautics industry was highly capital-intensive, required a highly skilled labour force, used advanced technology and had a very long period of maturation. Aircraft production had a high aggregate value added, and contributed to regional development and employment through a multiplier and instigator effect on technology-based industries. Mr. Botelho underlined the importance of the sector&apo;s privatization in explaining its success in Brazil. This had made an important difference in establishing a business strategy that was more sensitive to international market requirements. In that respect, the definition of products to serve the market over time had been and remained a fundamental element of success.

Flexibility and adaptation to customers&apo; needs and requirements were among key factors contributing to the success of the industry. However, the Brazilian Government, by adopting a strategic vision based on a solid foundation in research and development, had created the necessary basis for that success. Moreover, an essential role had been the financing of exports by the Brazilian Bank of Development (BNDES). The aeronautics industry in Brazil had generated US$ 5.5 billion of net export income (taking account of imported inputs). The fight for new and larger market shares tended to be based on higher technical barriers and more systematic disputes within the WTO trade system.

Referring to the trading system, Mr. Botelho insisted that Embraer was calling for a free trade environment with rules that ensured a level playing field. Embraer was also pleading for competition in international markets to be based more on prices, quality of products and after-sale services than on conditions of export financing support and/or tariffs. He insisted that the best trade prospects for Embraer, and Brazil in general, could only be obtained through the completion of the WTO negotiations, which would guarantee fair access to international markets rather than trade rules and exceptions that would generate structural disadvantages for developing countries.

In closing the colloquium, the Secretary-General of UNCTAD stressed the need to create the conditions that would guarantee the development of the supply capacity of an economy. Particular attention should be paid to containing the cost of investment, implementing a tax system that generates the right incentives to invest in new activities and deepen existing ones, removing inefficiencies linked to bureaucratic costs, and investing in public infrastructures. UNCTAD could play a role in helping developing countries strengthen their supply capacity. This could be achieved in the context of specific projects on the identification and assessment of the determinants of sectoral success stories in developing countries.