The UNCTAD's Trade and Development Report for 2006 urges Least Developing Countries (LDCs) to implement more autonomous policies, and also to further strengthen the global partnership for development to achieve the Millennium Development Goals (MDGs) adopted by the United Nations for 2015. The report questions global trade practices and accuses them of being too narrow and inadequate to address developmental issues: “International trade rules and conditions attached to aid and loans provided to developing countries should not reach the point of restricting the governments of those countries from doing what is best for their economies.”
The Trade and Development Report (TDR) , which is the first major report UN report following the collapse of the Doha Round in July, addresses the theme of "Global partnership and national policies for development", argues that globalization
makes the impact of external influences over national policy targets more acute: Bilateral and regional trade agreements often involve tighter constraints, and there are many non-trade channels that constrain policy space, particularly International Monetary Fund (IMF) conditionalities.” "The TDR underlines that the international trade rules and regulations which are emerging from multilateral negotiations and a rising number of
regional and bilateral trade accords could rule out the use of the very policy measures that were instrumental in the development of today's mature economies."
The report argues that a fully inclusive multilateral trading regime must have a
sufficient degree of flexibility to reflect the interests and needs of all its members. This point has also been raised by developing countries about the unfair negotiating practices at the World Trade Organisation (WTO). WTO negotiation procedures have often given the impression of less than full transparency and participation, so that some countries appear to have stronger influence than others. Decisions taken in so-called "green room" meetings or in other gatherings of a limited number of members are often presented to the entire membership as fait accompli. These procedures prompt concerns about unequal influence and unequal representation in the decision-making processes. The reports therefore states that while trading rules extend to extend to all signatories in the same way in terms of legal obligation, “they are much more burdensome for developing countries in economic terms. This implies that it is crucially important to look at the "level playing field" metaphor not in terms of legal constraints, but in terms of economic constraints, considering countries' different structural features and levels of development."
In suggesting greater independence in policy-making, the report reflects the long-cherished aspiration of the developing countries to regain their "policy space" for decision-making, curtailed in the last few decades by global free-market economics and by the conditions imposed by multilateral financial organisations such as the IMF. The report recognises and guarantees governments’ domestic policy space and flexibilities, preserving their right to use policy tools including trade measures, that develop fair and sustainable economies, protect and promote employment, social welfare, health and the environment and guarantee public participation: Self-centred national economic policies including mercantilist trade policies or beggar-thy-neighbour macroeconomic and exchange-rate policies through which influential countries can harm the economic performance of others, need to be checked by multilateral rules and disciplines. But such restrictions on national policy autonomy should not require developing-country officials to relinquish policies that support economic development.”
The report argues that for development policies to be successful, they need to be linked more closely to national policies to develop productive capacities and reduce aid dependence. It goes on to mention more importantly that, any conditions attached to aid must not hamper a government’s efforts to discover the best ways to develop productive capacities and its ability to experiment to find the best approach in its local context. The report advocates for a production and employment oriented approach to poverty reduction that would encompass, rather than be narrowly focused on, increasing social sector spending and achieving human development targets. It would also entail a development driven approach to trade rather than a trade driven approach to development. An approach to developing productive capacities which is simply trade-centric will not be sufficient for sustained and inclusive growth in developing countries
The report further notes that developing countries can impose stringent rules on patent
disclosure and subsequently grant narrow patents, or they can have flexible discretionary use of compulsory licensing. However, in many cases regional and
bilateral trade agreements foreclose part of the autonomy left open to developing countries by the Trade-Related Aspects of Intellectual Property Rights (TRIPS). Many observers consider the TRIPS agreement to be the most controversial of the Uruguay Round Agreements because of its potential to restrict access of developing countries to technology, knowledge and medicines. The limitations introduced by TRIPS imply an asymmetry that favours the owners of protected intellectual property - mainly in developed countries - at the expense of those trying to gain access to such
intellectual content, mainly in developing countries. Also, provisions regarding technology transfer and technical cooperation, which are of importance mainly for developing countries, are of a "best endeavour" nature and difficult to enforce, and non-compliance is not subject to a penalty.
The need for policy space in Africa has been echoed by African leaders and is still a topical issue when calls were made to African leaders to urgently attend to Africa's declining influence in world institutions. African ministers of finance and economy who met in Mozambique on August 3-5 and made a recommendation to their heads of state and government to endorse the issue of protecting Africa's voice and participation in the world arena
The Sao Paulo Consensus reached at UNCTAD XI in 2004 made the point that:
The process of liberalisation shall take place with due respect for national policy objectives and the development level of individual members, both overall and in individual sectors. There shall be appropriate flexibility for individual developing country member for opening fewer sectors, liberalizing fewer types of transactions, progressively extending market access in line with their development situation…
The above words make the case for the need for appropriate balance between national policy space and international disciplines and commitments. Therefore, States must ensure that they retain the right to regulate and to ensure that services are accessible to children, women and the most vulnerable groups, and that the quality of health care is sufficient. Leaders of governments in African LDCs should be aggressive and guard jealously their policy space to ensure that people’s livelihoods are not mortgaged through wholesale liberalization.
*Aulline H. Mabika is a Research Intern with SEATINI. |
