"There is a need to strengthen coherence between national development strategies and global economic processes, so as to ensure gains from trade," says Secretary General Rubens Ricupero. "The fact is that in many developing countries, conventional market based policies have not lived up to expectations in terms of promoting sustainable development and poverty reduction," he points out.

Those words go to the heart of the Conference. "A key thematic event at UNCTAD XI will focus on assuring development gains from the international trading system and trade negotiations," says Lakshmi Puri, the Division´s Director. "The fundamental challenge is to obtain meaningful and measurable development gains for developing countries," she adds.

The Interactive Thematic Session entitled, "Assuring Development Gains from the International Trading System and Trade Negotiations", will take place on 16 June 2004 in Sao Paulo. The meeting will be opened by UNCTAD Secretary-General Rubens Ricupero and chaired by Brazilian Foreign Minister Celso Amorin. Keynote addresses by Ugandan President Yoweri Kaguta Museveni and Dr. Lleonel Fernández, President Elect of the Dominican Republic, will be followed by interventions by Ministers and other Heads of Delegation. Over 35 Ministers and Deputy Ministers have indicated their intention to address the meeting.

The challenges are both real and urgent. For example, at the end of the Uruguay Round of multilateral trade negotiations, annual income gains of US$116 billion by 2005 were projected for developing and transition economies as a group, out of a total US$510 billion increase in annual world income. Those gains have not fully materialized.

While moving forward to real and new gains for developing countries, the current multilateral trade negotiations on the Doha Work Programme should help to make good on the promises not realized from previous rounds. Developing countries need enhanced, effective and stable market access in their major markets. It is also important to allow those countries, particularly the poorest among them, enough policy space within the international trading system to build the necessary supply capacity and competitiveness to enable them to actually realize potential gains.

Why assuring development gains from trade is important

UNCTAD estimates that international trade may grow by 7% in 2004, up from 4.7% in 2003 and 3% in 2002. Within this context, developing countries have made significant contributions with a 9% trade growth rate. But their gains are unevenly distributed across countries.

China leads Asia&apo;s impressive trade growth with a 30% increase while Least Development Countries (LDCs) and those dependent on commodity exports remain marginalized and vulnerable to external shocks. Income inequality has grown between and within countries and poverty remains endemic in developing countries, with about 1.2 billion people living on less than US$1 a day.

Assuring development gains from trade depends on national policies of developing countries themselves. But supportive international and developed country policies are critical determinants. Efforts to assure development gains must be based on objective and realistic evaluation of the actual experience of developing countries and the influence of developed country policies. It must also factor in the costs of trade liberalization and trade-related rules implementation.

Complementary policies (e.g. social, financial, monetary, environmental, competition and technology policies) are also needed to assure sustainable, wide spread development gains in a coherent manner.

Agriculture is particularly important in most development countries for rural livelihoods and food security, and often provides over 50% of exports. Since the poorest countries are the most vulnerable, international trade negotiations on agriculture are strongly related to poverty. Yet, total support to agriculture in OECD countries was estimated at US$ 318 billion or 1.2% of GDP in 2002 and import tariffs on agricultural products were much higher than for other goods. This distorts the international agricultural market and reduces the competitiveness of developing country exports.

Liberalization of textile and clothing trade in 2005 could bring 27 million jobs for developing countries and income gains of US$24 billion and export revenue gains of US$40 billion. Efficiency and welfare gains for the importing developed countries are estimated at US$18 billion in the US and euros 25 billion in the EU. But less competitive developing countries risk being marginalized and need help to take advantage of new opportunities.

Some studies suggest that allowing additional temporary workers equal to 3% of their quota of foreign workers into developed countries would cause annual welfare gains for all countries of about US$ 150 billion. Their formal remittances to developing countries are already US$ 90 billion, which is two to eight times annual official development assistance and foreign direct investment. Informal remittances are estimated to be two to three times higher than formal remittances.

Services negotiations in the WTO could enable opportunities for developing countries to truly benefit from globalization and liberalized movement of labour. Developing countries could also capture up to 25% of global outsourcing/ off shoring market for information technology enabled services, which is estimated to reach over US$ 850 billion by 2008.

There is considerable evidence of the potential for development gains. UNCTAD is working on identification of common indicators or benchmarks to measure development gains to help evaluate trade outcomes from the development viewpoint. (Please see UNCTAD XI DITC background note # 6)

UNCTAD XI&apo;s agenda on development gains is inspired by the priorities set in the UN´s Millennium Declaration and its emphasis on trade and development solidarity at the international, multilateral, regional and national levels. The goal is to promote coherence between national development strategies and policies, and what is required at the international level in terms of trade, finance, monetary, technology and environment-related policies for the success of those strategies.

As the focal point in the UN system for the integrated treatment of trade and development, UNCTAD is committed to a new vision on trade policy and development. At the heart of that vision is assuring development gains for developing countries from the international trading system and trade negotiations.