Chan slams inequities in world trade system - at ECOSOC meeting Stabroek News July 9, 1998 Trade Minister, Michael Shree Chan has appealed for the World Trade Organisation (WTO) to urgently address the obstacles to the economic development of developing countries. And he stressed that if they are to protect their interests, developing countries must be more involved in the decision making process of the WTO, the organisation which has the primary responsibility for overseeing free and fair trade. Addressing the high level meeting of the United Nations Economic and Social Council (ECOSOC) in New York on Tuesday, Shree Chan stressed that ECOSOC and the United Nations General Assembly "must be vigilant to ensure that the global trading system is equitable and fair." Shree Chan observed that it was necessary that "developing countries should not be denied the rational economic use of their natural resources." "It must be realised that because of their inherent disadvantages, developing countries should not be forced into premature adoption of the rules of the globalised system. Using the problems being faced by Guyana's timber exports, Shree Chan explained that its access to markets in North America was "threatened by declared environmental concerns for the preservation of tropical forests." "Such prohibitive measures are difficult to understand, since our forests are in a pristine state and are carefully managed with an eye to conservation," the Minister asserted. "Moreover, exceptions for exports of listed hardwoods are allowed only on the basis of certification, which, though acceptable in principle by my Government, becomes in practice not only costly and impractical, but also subject to abuse by some certifiers," he said. Another problem facing the developing countries, he explained, was "the frightening likelihood of the loss of preferential access to important markets such as the European Union, because of drastic WTO (World Trade Organisation) free trade rules." He explained that the constant widening of the GSP (Generalised System of Preferences) had considerably eroded such preferential treatment enjoyed by the developing countries and "signalled the end of trade incentives for small economies." "We are obliged to enter and compete in the marketplace as best we can," Shree Chan observed. "Yet as we rise to the challenges, we are often confronted by the spectre of protectionism," the Minister noted, giving as an example the requirement by some markets that bananas be a certain size and shape to be allowed to enter. "Not surprisingly, it is difficult for these small countries to satisfy these rigid requirements. As a result, Caribbean trade has suffered and so too have those who depend on it for their livelihood." Commenting on the increasing trend of globalisation which he said was "deemed to hold both opportunities and challenges for the participants," Shree Chan expressed doubts about the benefits that could be derived from the proclaimed opportunities and challenges of globalisation. He said that his delegation was concerned "to know whether the proclaimed `opportunities' are real and open to all and whether the so-called `challenges' are not a euphemism for the effective marginalisation of small states such as ours." Shree Chan noted that it was being claimed that world trade has increased sixteen fold since the launch of the General Agreement on Tariffs and Trade and worldwide growth and living standards had risen more in the last thirty years than any time previously. Also, he added that according to the Organisation for Economic Cooperation and Development, poverty had been reduced more in the last fifty years than in the last five hundred years and it is projected that the per capita income in the developing world would rise by some 270 per cent by the year 2020, whereas in the developed world it would rise by only 80 per cent. But he noted that, according to the United Nations Development Programme's Human Development Report for 1997, a quarter of the developing world's people still live in poverty; an estimated 1.3 billion still survive on less than US$1 per day. Shree Chan observed, that it was clear that small countries like Guyana were "yet to reap any dividends from rapid globalisation" but that "at the same time we see that, unless precautionary measures are taken, there is a clear and present danger of marginalisation from the mainstream of the world economy." He noted that the productive sectors of developing countries were starved of foreign investment as "the multi-national corporations preferred to direct their flows to larger countries with prospects of greater profitability." But he noted that at the same time, Overseas Development Assistance (ODA) on which the developing countries had traditionally relied to serve as a catalyst for their export capability, had been greatly reduced. This, he said, was due to the lack of the requisite political will of the developed countries to implement the programme of providing 0.7 per cent of the Gross National Product in ODA. Additionally, he added, "we continue to be denied the rapid technological progress now evident in the wider world. As a consequence we run the risk of a slow-down in growth and rise in poverty."