Trade liberalization must be tailor-made
at national level
"Trade liberalization must be fully integrated into a comprehensive
and forward looking development strategy. Therefore, it must be planned and
tailor-made at the national level" said Paolo Garonna, Deputy Executive
Secretary of the United Nations Economic Commission for Europe (UNECE) in
his statement to the World Trade Organization (WTO) Ministerial Trade Conference
for Central Asian and Caucasus countries, held in Tbilisi, Georgia on 21-22
May 2002.
It is at national level that the government, the parliament, the business
community and civil society can identify the best ways and means to open up
to external trade, the most appropriate regulatory environment, the practices
of good governance, the required economic reforms to support competitiveness
and the transition to an effective market mechanism. Economists have spoken
in that context of an "endogenous growth model". This means that
the critical national policy options cannot be transplanted, imposed from
the outside or copied from an abstract blueprint. The diverse "success
stories" of Ireland, Denmark, Spain or Portugal, and the more recent
ones of the Czech Republic, Hungary or Slovenia show that there is not a "single
optimal way".
The definition of national trade strategies is not an area that can be delegated
to top down technical assistance, nor is it an area for negotiated binding
rules of a uniform and rigid nature. Trade and development policies are an
area of policy dialogue, where countries exchange experience, identify best
practice and learn from their peers. The UN Regional Commissions are best
placed to support dialogue on trade policies: they have universal membership,
nations can exchange experience on an equal footing and in a framework that
is relatively more homogeneous than at the global level. They provide a forum
therefore that is optimal for peer pressure, ownership and innovation. "Trade
policy reviews, monitoring and implementation are areas where the ECE can
support the development of the multilateral trade system, in cooperation with
the other main policy analysis organizations in the region, like the European
Commission and the Organisation for Economic Co-operation and Development
(OECD)."
"Policy dialogue is not an alternative to establishing a rules-based
WTO mechanism on trade and investment," added Mr. Garonna. "On the
contrary, policy dialogue can be the necessary precondition for developing
the kind of consensus required for agreeing on a minimum set of multilateral
principles and rules governing investment". On the basis of their complementary
mandates, the cooperation between WTO and the UN Regional Commissions can
be strengthened and extended.
Developing countries demand more participation in decision making in the
WTO context. "But let us be careful not to re-invent the wheel. Rather
than making the WTO like the UN, we need to give the UN a stronger role and
a higher profile in trade liberalization". The Georgian President, Mr.
Eduard Shevardnadze, in his introductory address said that an entirely new
organization was born at Doha. Mr. Garonna concurred and stated that "a
new spirit of collaboration among international organizations was born at
Doha and Monterrey. ... But now we must go further, and seek inspiration from
Adam Smith and Montesquieu: we should establish a clear division of labour
and division of powers among international organizations". This need
was particularly felt at the meeting in discussing programmes of technical
assistance and capacity building in trade. "Rather than looking at what
each organization should do, we should focus on what they should not do!"
said Mr. Garonna. "The Enron experience has shown that providing business
auditing services and business advice do not go well together. Similar "conflicts
of interest" might arise in the case of the provision of technical assistance
by international organizations". Defining trade strategies and setting
priorities is the prerogative of national governments and intergovernmental
organizations; the same should be said of monitoring and evaluation of performance
and results. But the actual activation, financing and direct delivery of operational
activities should be left to more flexible mechanisms, where the private sector
can also play an important role, not only in the execution, but also in the
provision of funds.
The WTO has embarked in an ambitious project for the establishment of a comprehensive
and structured database on technical assistance and capacity building, in
cooperation with the OECD and other organizations. "The ECE is ready
to supply all the information and support possible to this initiative, aiming
at creating transparency and effectiveness. This can be a formidable tool
for planning targeting and coordinating activities in this domain".
The best form of technical assistance that the ECE can provide is to support
access and participation of the weaker member countries in the institutional
networks that it operates. These networks in fact have a built-in component
of capacity building and "learning by doing" for the countries participating
in them. The weaker economies in transition however cannot fully utilize these
networks because of existing barriers of costs, skills and knowledge. Technical
assistance could target these barriers in order to enable those countries
to fully benefit from the policy networks in trade facilitation or industrial
restructuring for instance.
For further information please contact:
Paolo Garonna
Deputy Executive Secretary
United Nations Economic Commission for Europe (UNECE)
Palais des Nations
CH - 1211 GENEVA 10
Tel: + 41(0)22 917 41 44
Fax: + 41(0)22 917 06 59
E-mail: [email protected]
Ref: ECE/GEN/02/17