AOSIS Workshop on trade, sustainable development and small island developing States

2001-12-12 AOSIS Download PDF

Topic: Sustainable Development

The workshop was held at the Wyndham Rose Hall Resort and Country
Club in Montego Bay, Jamaica from 12 to 15 December, 2001. Informal
consultations, registration and preparation was held on 11 December.

Opening ceremony
The workshop was blessed by The Reverend Edward Jennings, of Montego
Mrs. Norma Taylor Roberts (Ministry of Foreign Affairs, Jamaica)
delivered the opening statement of the Minister of Foreign Affairs. The
challenges facing small island developing States (SIDS) was highlighted as
being quite particular, that they have added dimensions that other developing
countries do not face. The interface of trade and development determined the
responses that SIDS must provide. The underlying issue was vulnerability,
as well as the limitations of the situations and circumstances of SIDS. New
demands were made on natural resources, placing new strains on the
environment. The acute stresses on SIDS were best exemplified by climate
change. It was timely that the workshop was held in the post-Doha
timeframe, and in relation to the preparations for World Summit on
Sustainable Development (WSSD). It was hoped that the common cause of
SIDS will prevail.
H.E. Ambassador Tuiloma Neroni Slade, Permanent Representative of
Samoa to the United Nations and Chairman of AOSIS gave the introductory
remarks on behalf of the group. He noted that Jamaica had some time ago
expressed concern that there was limited cooperation and knowledge of
many of the issues relating to trade. AOSIS cooperation on many issues of
sustainable development had, in fact, stretched back for a decade, though
perhaps less prominently about trade. In part, as of the Barbados Conference
in 1994, because the Uruguay Round was still then incomplete and ongoing.
It was important to note the unique and special concerns of SIDS, for they
are different from other developing countries. SIDS do need to give
emphasis to their few special advantages. He said that it was expected that
developing countries must get a better deal out the new international trading
negotiation round. Doha may seek to reach out to the developing world, but
it remains to be seen if it truly comprised the best deal for small island
countries. Many larger developing countries were not enthusiastic about a
new round of negotiations, but most SIDS considered that a new round
promised benefits and therefore to be welcomed. In was in this new and
challenging environment that the AOSIS countries gathered in Montego
Bay. From his perspective, he expected the workshop would result in greater
cooperation and collaboration. Relevant environmental agreements and
inter-linkages must be explored for their linkages to trade. It was a timely
occasion overall as AOSIS prepared for the WSSD.
On behalf of AOSIS, Ambassador Slade expressed gratitude to the
Government of Jamaica for its generosity in hosting the workshop and for
the excellent arrangements for it. He acknowledged with deep appreciation
the support and generous funding contributions from the United Nations
Environment Program (UNEP) and the Government of Norway for the
workshop. He expressed particular appreciation for the excellent cooperation
and continuing support of the SIDS Unit of UN DESA; and his thanks to the
Mission of Antigua and Barbuda and the Mission of Samoa for their hard
work and assistance in making the arrangements for the workshop.

Session 1
Sustainable development and the trade and environment agenda.
Mr Charles Arden Clarke, Senior Program Officer, UNEP, stated that in
seeking a post-Doha strategy, impressions of Doha are being analyzed by a
multitude of international organizations, including UNEP. The implication
could be construed that many countries and agencies were looking for or
interpreting the Doha text to suit their concerns.
Increasingly, trade liberalization determined domestic policy choices. It had been said that the
world had entered the third age of trade policy. The first removed tariffs, the
second reduced other barriers, and now the international community was
turning to look at agriculture and other trade issues for the purpose of
sustainable development. Much depended on which actors engaged the trade
issues at the country level – co-opting the forces of trade ministries with
environment agencies therefore had obvious benefits for securing trade and
sustainable development. SIDS must engage with the international
community, otherwise their priorities would not be met. As a group SIDS
would need common strategies, and thus draw the maximum for technical
assistance, while enhancing their negotiating skills. Building on their climate
change experience, and using their regional organizations, SIDS had a
platform to start this cooperation. He noted that ten areas of the Barbados
Programme of Action for the sustainable development of SIDS (BPOA) had
direct links to trade and finance. Integrating natural resource considerations
into trade promotion and expansion would be difficult, but could maximize
net development gains of trade by minimizing associated resource damage.
Mainstreaming of trade into national socio-economic development plans
would be required. SIDS must cooperate, coordinate and enhance their
regional cooperation, and secure IGO and aid support. The defense of trade
preferences and special treatment at the level of WTO was a further task that
SIDS must tackle, and they must take charge of the capacity building offers
that were there. The paper commitments in the Doha declaration on special
considerations must be developed, and there was a need to look at
coordinating across the trade related institutions such as MEAs and UN. The
sharing of experiences, and gaining benefits from human and technical
resources of civil society had produced a strong trend to bring on board
NGOs in the negotiations and implementation. UNEP considered it
important, and AOSIS could consider inviting NGOs to the next meetings.
The needs of developing countries would be at the heart of the WTO work
after Doha. Doha gave commitment to sustainable development and
mutually supportive trade and environment policies. It stressed the
involvement and enhanced cooperation between trade and sustainable
development for the WSSD. The Doha declaration also recognised the
importance of technical cooperation especially for LDCs. It encouraged
environmental review of trade policies and clarification of the relationship of
WTO to MEAs. Clarifying rules on fisheries subsidies would be important
for SIDS, and the CTE would continue to work on the effect of
environmental measures, eliminating distortions, examining TRIPs and
labeling requirements. Sustainable development and MEA issues were being
raised in various fora of the WTO, including preparations for an
international framework for investment and work program on issues for
small economies. UNEP had a work program in support of these issues and
focusing on enhancing environmental concerns in MEAs and in WTO. There
was also joint work on capacity building with UNCTAD. SIDS should
utilize the experiences gained and use the organizations that were there, as
well as the UN system.
Questions and comments were raised by Fiji, Mauritius, Cyprus, Solomon
Islands, Cuba, Barbados, Samoa, Bahamas, Jamaica, Comoros and the
Commonwealth Secretariat.
In the discussions it was suggested that trade and finance issues and their
links to environment were looked at simply in terms of unintended economic
effects. Environmental degradation must be viewed not as a simple outcome
of the economic development, and the absorption of costs must be

Coordination must be improved, at international as well as at
national level. Trade negotiators had been focusing on broader trade issues,
without taking the environment into account. SIDS also faced special
constraints. Special treatment was therefore going to be crucial, especially
for capacity building. While this was recognized in Doha, it required
elaboration as to what SIDS specifically needed. Concerns were expressed
that Doha only concentrated on how environmental protections affected
trade, and not how trade affected the environment. Fisheries subsidies was
an especially important issue. SIDS must engage in the negotiations on those
fisheries issues. Issues relating to localization of fleets must also be taken
into account. There was an increasing understanding that there are numerous
impacts on sectors other than trade. There are advantages and economic
savings to engage in regional cooperation. But this could not substitute for
national coordination, and there was a need to find innovative ways to
support cooperation. Streamlining environmental governance would have to
be addressed at the WSSD. One issue that was left out of Doha – the
interface between trade measures and MEAs – was a very controversial issue
that will eventually occur when a WTO and MEA member took measures
against a non-WTO member.
It was also commented that Doha gave special and differential treatment
only partial consideration. There were serious legal and practical
considerations that would determine whether SIDS would retain their special
status. Capacity building constraints were familiar to smaller delegations.
The private sector must also be engaged as they had insights and expertise
not available to the public sector. But capacity building resources were often
lacking. In adjusting to new rules and regulations from WTO, SIDS would
require special consideration. Concern was expressed that the private sector
would loose out due to lack of information, and may required specialized
advice. There was clearly a need for bringing more SIDS to the WTO
negotiating table. The trade and development committee was mandated to
make the rules by 2002. So on preferential treatment the discussions had
already commenced. The flexibility that SIDS sought must be defended at
the meetings in Geneva. As a group they had not made the case for
sustainable development in trade. The Doha text was the final provision
agreed to at the last session, with no SIDS present. This must be rectified,
and SIDS must have greater clarity of their positions and greater unity.
A question was raised as to whether UNEP could assist with regional
cooperative arrangements, or to set these up. It was indicated that UNEP
does have a mandate to assist the developing countries, and would seek to
continue its participation fund for major meetings. There would need to be a
realistic view of what could be done for regional cooperation, and SIDS
should submit proposals for capacity building so that UNEP could judge
what was required, and what could be done.
Mr Espen Ronneberg, Inter-regional Advisor for Small Island Developing
States, United Nations, introduced the manner in which trade and
agriculture had been covered in the BPOA. As a conceptual matter it was
very difficult to generalize for all SIDS. There were many similarities, such
as the influence of vulnerability and external factors, but overall the
agricultural situation and endowment of SIDS varied greatly. The trends for
each country were also determined by the most dominant sector of the
economy, and the impact of trade and agriculture on that sector. The
example of the SIDS where tourism played a significant role was briefly
discussed. In the Barbados Program of Action trade was largely seen as a
means of implementation, while agriculture was considered from the
perspective of maximizing the natural resource endowment of SIDS.
In the current trade situation it was unlikely that the trade preferences of old would
be maintained. Yet the special situation of SIDS demanded that
consideration be given to leveling the playing field. The possibilities for
cooperation using SIDSNet were mentioned, and the need for better
cooperation and coordination raised.
Questions and comments were raised by Cyprus, Mauritius, Barbados,
Malta, Fiji, Trinidad and Tobago and the Pacific Islands Forum Secretariat.
In the discussions it was noted that the food crop sector would most likely
suffer from declining prices. The need to have an agenda to mitigate the
declining wages in the agricultural sector would not necessarily be able to
ensure the survival with high production costs in SIDS, for any sector. What
was needed was to take a stand against the industrialization of agriculture
and the environmental impacts thereof. SIDS must strategize with respect to
the definition of SIDS as a concept for the post-Doha period, as it seemed
that the WTO would only accept the concept of small economies. Trade
liberalization for SIDS involved agricultural competition, but many SIDS
were net importers of food and, with the total food import bill rising, are not
able to compete with the outside world. Agriculture had a multi-faceted role
and was close to the core of many SIDS societies. It was an uphill battle to
gain recognition for this concept. It was now clear that capacity building was
crucial for SIDS. To conform to all the agreements will cause great burdens
on SIDS economies. The issue of sustainable development as a whole
needed to be looked at, and how agriculture affected industrial production
and in turn was affect by it. A falloff from agricultural sector was to be
expected but must be managed.
Ms Paola Deda, Program Officer for Sustainable Use and Tourism,
Convention on Biological Diversity Secretariat, spoke on tourism in SIDS
and its relation to sustainable development. It had been recognized that this
sector had great potential for raising earnings, but could also cause a lot of
degradation. The BPOA had identified the importance of the sector, and the
Convention on Biological Diversity (CBD) had studied the opportunity for
economic development and the growth of related activities due to tourism.
The direct use of natural resources in the provision of tourist facilities may
have a significant impact on the environment. The BPOA highlighted the
importance of preserving biodiversity and culture. Tourism could limit
access of locals. There was a shared recognition of the need to carefully plan
tourism within the carrying capacity of SIDS, and should be prevented from
using environmentally fragile areas. The need for guidelines on tourism
development led the CBD to work on guidelines for activities related to
sustainable tourism development. The guidelines are targeted at policy
makers as well as tourism managers; and addressed certain main aspects and
steps to be taken in management. It must involve all stakeholders, have a
vision and goals for national sustainable development of tourism, and ensure
a transparent decision making process. Public education and awareness
raising were required for better understanding of the impacts of tourism on
biodiversity. Equipping local communities with the tools for analysis of
impacts of tourism development was important. The CBD work will be
submitted to WSSD and to the World Ecotourism Summit in May 2002.

Question and comments were raised by Mauritius, Fiji, Cyprus, Malta and
the Chairman.
In the discussions, the importance of tourism was underlined, keeping in
mind the impacts on SIDS. Trade officials often viewed the tourism sector as
a trap. Diversification from mono-culture in agriculture often resulted in
mono-manufacture, which had now diversified to the mono-service of

To what extent this single important sector could be sustained was
an issue that prevented many SIDS from moving up to other knowledge
based service sectors. The consistency of the CBD guidelines with the
World Tourism Organization was raised. The need to balance tourism with
ecological commitments such as the Global Code of Ethics was highlighted.
The priority must be to sell these ideas to the tourism officials, who often
had more clout than environment officials, while the same goes for the large
tour operators. Tourism growth was a reality and there was a need for
practical solutions right now. Economic concerns in general also had
regulatory impacts.
Session 2
Financing for development
Mr Amena Yauvoli, Permanent Mission of Fiji to the United Nations,
presented some of the main issues being discussed at the International
Conference on Financing for Development (FfD). The entire developing
world was interested in the broader sense of FfD. The growing disparities in
wealth and between countries was a great concern. It had been estimated that
a billion people lived in poverty, 850 million of them being illiterate. The
changing economic landscape had brought new attention to the underlying
issues for financing for development. The Millenium Declaration initiative
to reduce poverty by 50% will take a lot of effort. There are basically 6
thematic issues – domestic resource mobilization, FDI, trade, ODA, external
debt and structural issues affecting the system. These challenges, or
problems, should be broadly debated by AOSIS. SIDS were in a phase of
rapid globalization, but are still vulnerable and weak economies. There must
be effective and active participation, as SIDS can only gain from the process
in such a manner. Mobilization of domestic resources was more difficult for
SIDS than other developing countries, since they had small private sectors
and have greater dependence on external resources. The World Bank had
recognized the vulnerabilities over which SIDS had no control and against
which they had little resilience. Trade was a most important factor for SIDS,
but their ability SIDS to expand trade was limited. There was a need for
some recognition of preferential treatment and accordingly appropriate
market access. Capacity building and technical assistance were significant
challenges. Standards and technical issues in the WTO framework, such as
the phyto-sanitary agreement, would have impacts on SIDS and must be
addressed. Volume and quality of ODA were declining, but remained major
factor for SIDS economies. Smallness was often equated with risk. External
debt and debt relief were different in nature for SIDS in that SIDS are not all
in the same situation of the HPIC. SIDS in New York had tried to make
these points to the facilitator during the FfD process. Financial markets were
too focussed on short-term profit instead of longer term sustainability. ODA
was multi-dimensional and of great importance to SIDS. The difficult issue
now would be how to articulate SIDS concerns with the systemic issues
relating to how the international community addressed the concerns of the
most vulnerable communities.
Dr. Roman Grynberg, Deputy Director, Commonwealth Secretariat, spoke
of the initiative to developing a supportive financing for development, to
try and find an alternative to trade preferences. The underlying causes were
both inherent risks and perceptions. It was important to determine what
could be done to stimulate investment in small and vulnerable economies
(SIDS and LDCs). There was erosion of trade preferences and there was a
need to replace these with investment preferences in a market friendly way.
The question was how to give incentives to the market to locate and invest in
small economies. The FDI climate was essential, as was the need for
stability of political and legal systems.
The example of Samoa was mentioned, as Samoa was well governed but is an LDC at the end of the
Pacific. The problem, shared by all SIDS, was how to attract investors to
invest in a small economy like Samoa. Financiers had specific targets for
returns on their investments. Investment funds concentrated on larger scale
projects. International financial institutions emphasized removal of market
distortions. There were some inherent impediments to investments, but some
were only perceived, such as wages in remote areas. Structural adjustment
would only do so much, and also reform of land laws. Organizations do
intervene to reduce the risks, for example World Bank or EU, but are
becoming non-concessional and are now mostly contributing straight loans.
This may drive out the private investor. The proposal to establish regional
funds with ODA and loans had been discussed as an option. There must be a
way to provide the investment as a form of subsidy to development. If there
was no private investment, then you either subsidize or you walk away from
SIDS. Which would mean an admission that globalization would not work
for SIDS. We must therefore help the private sector overcome the inherent
difficulties without supporting continued inefficiencies. Commercial banks
were gaining interest and should be brought in as partners. It was working
through market mechanism even though it did create some distortion. A
possible solution would therefore be to set up the Investment Preference
Fund as a partnership between World Bank, commercial banks, donors and
Questions and comments were raised by Bahamas, Cyprus, Papua New
Guinea, Trinidad and Tobago, Jamaica, Barbados, and Samoa.
The discussions centered on concerns that the FfD was not that targeted or
accurate on systemic issues as this relates to SIDS. SIDS must be involved
in the decision making process, so that any additional resources towards
development goals as may be needed, had been asked for and should be
considered. There was the impression that SIDS may not be realistic in
getting commitments from the development partners. Concerns over trade
and earnings from trade were discussed, and where that sat in the FfD
document. There was still a need to look at where SIDS needed targeted
technical assistance. ODA must be raised to 0.7% by the time of WSSD. But
it remained to be seen whether this would be achieved. There was a
convergence of opinion that the quality and quantity of ODA must both be
increased, but it may not be reached because of the economic effects of the
11 September terrorism attacks in the US. Many were concerned that the
proposal must be looked at in the context of general resistance to
preferences. The developed partners had anticipated this investment
preference system and were looking at avoiding investment competition. It
will likely run against same roadblocks as trade preferences did. In terms of
the timing of the FfD process, the upcoming AOSIS Singapore meeting may
be a good opportunity for developing links to the WSSD. Sound economic
advice from those experts between now and the Monterrey meeting would
be required. It was also understood that the Commonwealth proposal
followed the basic principle of what private investments were given to SME
within the OECD. Similar treatment should be considered for SIDS.
Disadvantaged countries should be treated as OECD treated its
disadvantaged regions.

Session 3
Regional co-operation on trade, environment and sustainable
Ms. Anya Thomas, Project Officer, Caribbean Community, highlighted
some of their work on regional cooperation. She described the various
actors and membership of the regional mechanisms.
Private sector cooperation was involved in trade but not with environment. The
international support for the multilateral environment agencies was causing
changes to occur in the region.

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Sub Topic: Macroeconomics