UNUnited Nations Economic Commission for Europe

Press Release

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Geneva, 22 May 2002

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