Mr. Chairman,

On behalf of the Group of 77 and China, I congratulate you on the assumption of chairmanship of this Commission. We congratulate other Members of the bureau on their election. We assure you of our full support for a successful conclusion of the substantive work of this Commission.

This session of the Trade Commission must be seen as an opportunity to give impetus to the trade and development agenda, beyond what has been recently achieved in other forums. The agenda of the Commission in the next 5 days is an important part of UNCTAD’s core mandate. Many of the issues that will be discussed relate to the current WTO trade negotiations, from which we hope to reap tangible development gains. Others relate to various objectives set in other development oriented summits and conferences. Unfortunately, it is clear that we are not on track to achieve these objectives within the timeframe originally planned. We need to ensure that our work in the Commission makes a meaningful contribution to this complex process.

Background documents and reports prepared by UNCTAD give us policy options that need to be assessed and distilled into policy recommendations that could guide us. We need precision and clear policy guidance to advance the development objectives and goals, including the MDGs and the development goals of the Doha Round.

We urge Members States to seize the opportunity offered by this consensus-building forum and to come up with operational policy recommendations that could enhance the development impact of our intergovernmental work. The G-77 and China believe that such a constructive role is within the reach of our deliberations this week.

Mr. Chairman,

We would have wished to see more substantive, development-focused outcome from thesixth WTO Ministerial Conference held in Hong Kong. However, the Conference has put the multilateral trade negotiations back on track and provided a launching pad for its successful conclusion in 2006.

Developing countries played a very constructive role before and during the Conference by showing the willingness to act and find common ground in order to sustain the rule based multilateral trading system. Ministerial meetings were held to form platform positions of country groupings such as the African Union, the ACP Group, Arab States, LDCs, and land-locked developing countries. The Group of 77 and China contributed to the preparatory process by giving its input to the Hong Kong Ministerial Declaration. Various groupings of members of the Group of 77 and China played particularly important roles by forming issue-specific coalitions such as G-20, G-33 and G-90.

The Hong Kong Ministerial Meeting also brought into focus the daunting challenges facing us this year for the successful conclusion of the Doha negotiations by December and realizing its development dimension. These negotiations will be critical to finalize the work on Modalities by April and other issues at the Ministerial Meeting expected in spring 2006 as well as to bring the negotiations forward towards balanced and development-focused completion by the end of 2006. Responding to the call of the world leaders made at the 2005 World Summit, we need to “work expeditiously towards implementing the development dimensions of the Doha work programme”, for a timely implementation of MDGs. The Hong Kong outcome should enable a “rebalancing in favour of developing countries” in the negotiating dynamics and in promoting development dimension of the Doha negotiations.

Mr. Chairman,

The G-77 and China welcome the adoption of amendment to the TRIPS Agreement to reflect the August 2003 Decision on paragraph 6 of the Doha Declaration on TRIPS and Public Health as well as the extension of the transition period for LDCs regarding the implementation of TRIPS Agreement until 1 July 2013.

Among the LDC specific proposals on Special and Differential Treatment (SDT), particularly significant is the agreement reached on duty-free and quota-free market access for LDCs. This marks an important step forward in the long-standing international effort to work towards the objective of duty-free and quota-free market access for LDCs.

The endorsement given to “aid for trade” is a welcome development, as developing countries, the LDCs in particular, face challenges in benefiting from trading opportunities arising from Doha negotiations, overcoming adjustment problems, diversifying economies and building productive capabilities and infrastructures. The commitment should be fully and effectively followed up. It seems to carry a trade liberalization focus and must be designed and implemented in a manner that ensures a development orientation. This will largely depend on the discussions in the proposed Task Force. We wish to stress the importance of equipping “aid for trade” with substantial resources that include a large grant component to support supply and productive capacity building, adjustment and technological and physical infrastructure development. A High Level Dialogue would be essential in this regard.

Let me now turn to the agenda items of this session.

On agenda item 3 – commodities, we want to ensure that our deliberations and policy conclusions enhance the contribution of the commodity sector to the eradication of extreme poverty and hunger. To that end, we need to take stock of UNCTAD’s work and national experiences and agree on how the international community could best support the efforts made by developing countries at national levels in areas such as (i) the integration of local producers into international supply chains; (ii) innovative financing and risk management tools for agricultural commodity producers; (iii) the use of extractive industries’ wealth for broad-based development; and (iv) economic diversification in regions that depend on extractive industries. The background documents by the UNCTAD secretariat point to a number of useful directions. The G77 encourages the secretariat to continue these efforts. We also urge member States to see what policy options identified therein could be further promoted.

The need for an enabling policy environment is crucial for the Commodity Dependent Developing Countries (CDDCs). During this Commission, we could identify and agree on the best ways to strengthen the nexus between trade, food security and industrialization, based on the lessons from experiences of countries that have succeeded in achieving growth from a commodity base.

Mr. Chairman,

The G77 and China welcome the work UNCTAD is willing to undertake to strengthen developing countries farmers with a view to integrating them into global commodity chains. It is important to stress that this objective should be taken one step further to explore and exploit opportunities for South-South trade and new trade creation. GSTP negotiations could also make a significant contribution to increased potential for South-South commodity trade.

We would also like to stress the importance of ensuring that the paragraph on commodities included in the WTO Ministerial Declaration adopted at Hong Kong last December is implemented fully. Based on its long experience in commodities, we expect UNCTAD to play an important role in this regard. UNCTAD’s unique position in the UN system on matters related to commodity issues puts it at the forefront of all initiatives in this domain.

The recommendations of the Group of Eminent Persons on Commodity Issues could also serve as a basis for our deliberations. Coordination with the Common Fund for Commodities in FAO as well as other initiatives such as the Integrated Framework (IF) should be strengthened in order to test innovative pilot strategies for countries most in need of technical assistance in commodity-based development programming. The commodity diversification policy and analytical toolkits being developed in the context of the JITAP programme on a country specific basis, the UNCTAD Virtual Institute, the Latin American Network for Mining and the African Mining Forum should be strengthened and broadened as comprehensive packages to be implemented not only in the African context but also in other developing and emerging countries elsewhere.

Another important initiative that we fully endorse is the International Task Force on Commodities launched at UNCTAD XI. The Task Force has a potential to provide new and innovative partnership-based approaches for dealing with the issue. This will advance the good work already being done by UNCTAD and other organizations as well as by the NGOs and the private sector. More importantly, it will bring a new vision and impetus to such work and generate synergies between the actions of different actors. This Commission provides a good opportunity to discuss with development partners the possibility of finding adequate resources and setting expeditious targets for implementing these programmes.

Mr. Chairman,

On agenda item 4 – market access, market entry and competitiveness. The G-77 and China wish to stress that the WTO Doha negotiations on agriculture and manufacturing sectors present a good opportunity for developing countries to benefit from further tariff reductions, particularly in industrialized country-markets. We hope that progress will be made in addressing market access concerns on the part of developing countries particularly in agriculture.

As tariffs continue their downward trend, particularly in manufacturing, another rising market access concern is the continuous surge of non-tariff barriers (NTBs), particularly those of technical nature. These include anti-dumping measures, new technical standards, new safety regulations, changed sanitary requirements, or more exacting procedures for import licensing and customs clearance. NTBs are damaging exports from developing countries. In this context, we welcome the initiative of the Secretary-General of UNCTAD to set up a Group of Eminent Persons on NTBs. These barriers amount to a new form of protectionism, and one that is harder to detect and define. Surveying NTBs around the world is a challenge. They vary from country to country, change frequently, and are hard to classify and quantify.

UNCTAD has a clear role to play in this complex field. It can assist developing countries, including LDCs, in building their analytical and statistical capacity to assess NTBs affecting their exports; it can provide an international forum for researchers and policy makers involved in NTBs to clarify several key methodological, classification and technical issues, including ways of quantifying NTBs to better understand their impact on international trade; it can contribute to the Doha round´s Negotiating Group on NAMA, particularly by concentrating on NTBs of concern to developing countries and by aiming at consensus building for a better understanding of options available in pursuing further trade liberalization after the anticipated decline in importance of classical tariffs and related policy instruments. We hope that UNCTAD will carry out these important tasks in cooperation with other international organizations, the donor community, academia and NGOs.

Mr. Chairman,

On agenda item 5 – trade in services -policies on services in developing countries are being shaped by dynamic factors-both internal and external. Governments are facing the challenge of realigning multidimensional objectives, when seeking to maximize development dividends accruing to them from progressive liberalization of services economy. Limited experience of developing countries makes it extremely difficult for policy makers to assess options available to them for creating coherent policy environment for trade in services supportive of development. Hence the significance of this agenda item in assessing development implications of trade in services. We attach utmost importance to the Commission’s work in this area.

Document TD/COM.1/77 is extremely useful in our discussion of development implications of trade in services. It provides a comprehensive analysis of possible gains from services liberalization and policy challenges facing developing countries towards utilizing services trade as an effective instrument of development and poverty alleviation. It lends new and interesting insight into the challenges and policy options that developing countries have in reforming their services sectors. The sectoral case studies highlight the weak supply capacity of developing countries and specific policies needed to overcome these weaknesses.

We are of the view that the assessment of trade in services is particularly important, as it helps developing countries’ governments and regulatory authorities in designing, pace and sequencing of services. As pointed out in the document, the lack of adequate, reliable and internationally harmonized data at the sectoral level has made it very difficult to undertake sound assessment in the area of services. The assessment of trade in services should help identify conditions for increasing beneficial participation of developing countries in international trade in services and services negotiations.

On services, the Hong Kong Ministerial Declaration set out new sectoral and modal objectives, approaches and timeframes of negotiations. Developing countries actively participated in the preparatory process and contributed to this collective achievement. We wish to express our sincere appreciation to UNCTAD for its continued valuable support extended during the course of the negotiations in the area of services. It helped understand development implications of services negotiations, build trade policy and regulatory capacities and identify policy options.

We subscribe to the view that services negotiations need to adhere to development-friendly provisions and the principle of progressive liberalization encapsulated in GATTS. It is required to achieve, by the specified timeframe, stated objectives of substantially improving offers in a commercially meaningful manner on sectors and modes of export interest to developing countries. We also emphasize the importance of effective and commercially meaningful liberalization of temporary movement of natural persons in Mode 4 to be pursued in accordance with the modal objectives as defined in the Ministerial Text. Priority should be given to sectors of interest to developing countries. We also attach importance to negotiations on GATTS rules, particularly Emergency Safeguards Measures (ESM).

Mr. Chairman,

On agenda item 6 – trade, environment and development, the G-77 and China are concerned at more stringent, complex and multidimensional environmental and related health requirements. We need to find a balanced approach that leads to shared trade and environmental gains between developed and developing countries. WTO rules and disciplines for limiting the trade-restrictiveness of environmental requirements are important. But the WTO cannot directly address specific problems arising in the preparation, setting and implementation of such requirements.

UNCTAD can play a key role in providing technical assistance and capacity building to developing countries that need to strengthen their institutional capacity to deal with environmental requirements. Some best practices have been identified in the background document and expert group meetings have suggested specific actions that could be further analyzed at this Commission to come up with a concrete action plan.

The UNCTAD’s Consultative Task Force on Environmental Requirements and Market Access for Developing Countries (CTF) is a positive step in the direction of finding pragmatic solutions.

We also welcome UNCTAD’s support to many developing countries for actively participating in the WTO negotiations on the liberalization of international trade in environmental goods and services. It, however, is important to ensure tangible gains beyond mere trade liberalization, notably in terms of access to and effective use of environmentally sound technologies and related know how that lead to material and resource savings and reduced environmental impact, without compromising developmental priorities. The G-77 welcomes UNCTAD’s pivotal role in supporting developing countries in seizing trade and investment opportunities arising from the implementation of economically-relevant multilateral environmental agreements such as the UN Framework Convention on Climate Change, its Kyoto Protocol and the Convention on Biological Diversity.

G-77 and China appreciate the Bio Trade Initiative for the positive implementation results and continued efforts in assisting developing countries in producing and marketing biodiversity-based products and services for both the domestic and international markets. We are also interested in broadening assistance from the recently launched Bio Fuels Initiative. It is hoped that the experiences and activities of these initiatives could be replicated. We suggest that in this Commission, ways and means be explored to realize this objective.

Finally, On agenda item 7 – implementation and post-Doha follow up, we note the outcome of the Sixth WTO Ministerial Conference last December. An agreement on a set of limited but important issues has put the negotiations back on track. Much, however, remains to be accomplished in advancing developmental issues in the Doha negotiations with a view to reviving and achieving a genuine development agenda. Substantive negotiations on market access in agriculture, NAMA and services and on rule-making in the coming months are crucial. On all the development aspects of the Doha negotiations, we expect UNCTAD to play an instrumental role through the three pillars of its mandate. In this regard, ensuring policy space for developing countries to promote a development-oriented growth of agricultural, industrial and services sectors carries utmost importance. Deliberations at this Commission should focus on how and to what extent the intent of Doha has been accomplished in the content of Hong Kong and the role UNCTAD can play to help realize the full ambition of the Doha Development Agenda.

Mr. Chairman,

The imperative of striking a deal in Hong Kong provided the rationale for lack of specificity. While the Geneva based process will now fill in the blanks with technical details, it is for UNCTAD to lend, through its research and analysis, a constructive development orientation to this ambiguity. UNCTAD must play a catalytic role by elaborating options that could maximize development gains from the efforts to wrap up the Doha round by the end of this year. It must continue to provide development impact assessments for countries, at varying levels of development, with regard to the different options for modalities and schedules that may be tabled. Most importantly, UNCTAD must engage in development-oriented consensus building towards a rules-based, non-discriminatory and predictable multilateral trading system, as envisaged in the Millennium Declaration. Mid-term Review of UNCTAD XI must also be viewed as an important exercise to that end.

The G-77 and China, Mr. Chairman, is willing to discuss all the issues on the substantive agenda of this Commission with a positive and open mind.

I thank you.