AOSIS Workshop on trade, sustainable development and small island developing States2001-12-12 AOSIS
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. Proceedings Opening ceremony The workshop was blessed by The Reverend Edward Jennings, of Montego Bay. 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 3 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 addressed. 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 6 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 tourism. 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 8 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 others. 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 development 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. Document continues. Download the PDF to read the full version.
Sub Topic: Macroeconomics