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OPENING STATEMENT BY
MR. KIM HAK-SU
UNDER-SECRETARY-GENERAL OF THE UNITED NATIONS
AND THE EXECUTIVE SECRETARY OF THE ECONOMIC AND SOCIAL
COMMISSION FOR ASIA AND THE PACIFIC

Excellencies,
Distinguished delegates,
Ladies and gentlemen,

It is a pleasure for me to welcome you all to this Seminar on UNCTAD XI, UNESCAP and Thailand: Trade as an Engine of Development. The Seminar has been organized to brief you on the outcome of the UNCTAD XI Conference and its implications for development of trade and trade policy in Thailand and the region as a whole and the role of ESCAP in this regard.

The United Nations Conference on Trade and Development concluded its eleventh session on 18 June 2004 in Sao Paulo, Brazil. The conference, which is held every four years, focused on the following theme: Enhancing the coherence between national development strategies and global economic processes towards economic growth and development, particularly of developing countries. Delegates from most countries in the world attending the conference deliberated on ways and means to optimize the positive impact of globalization and minimize the negative social impact, while ensuring that all groups of the population, and in particular the poorest, benefit from it. Central to this debate was the integration of developing countries into the world economy and multilateral trading system as well as the maximization of gains that developing countries could expect to derive from this system. As it is observed that trade liberalization and market based policies by themselves have failed to trigger economic growth and development in many developing countries, the conference deliberated on various issues including the links between trade and development, with focus on the link between trade and poverty reduction and between trade and gender; the need for strengthening supply-side capacities and competitiveness of developing countries to fully and effectively participate in the international economy and the role of ICT in this regard; the potential to develop "creative industries" in developing countries, and the need for partnerships, involving the private sector, NGOs and civil society, in effectively addressing development needs and achieving the internationally agreed development goals, including those contained in the Millennium Declaration. The deliberations resulted in the adoption of the Sao Paulo Consensus on 18 June 2004.

The Sao Paulo Consensus strengthens the commitments made in the Bangkok Plan of Action adopted by countries at the UNCTAD X Conference which was hosted by  Thailand in Bangkok in 2000. It noted that there was a need to strike a balance between the objectives of efficiency and equity in addressing globalization, and that both governments and the market have an important role to play in this regard. It called on countries to strengthen efforts to respond effectively to challenges and opportunities through the implementation of appropriate trade and macroeconomic policies and adoption of principles of good governance. In this context, countries need to strive for an appropriate balance between national policy space and international disciplines and commitments. At the international level, there was consensus that development strategies should be tailored to countries' specific development needs and circumstances while enabling international economic environment would need to be established through forging greater coherence and consistency of the international monetary, financial and trading systems and global economic governance.

Excellencies,
Distinguished delegates,
Ladies and gentlemen,

There is widespread consensus that trade can be an engine of growth and development provided its potential is carefully harnessed and appropriate policies and strategies are adopted at national and international levels. Experiences have demonstrated that the link between trade and development is not automatic but that without trade as the means to generate wealth, it is difficult to achieve the development objectives in an ever-increasing interdependent world. Without sustainable flows of trade and investment, many countries are condemned to perpetual poverty and dependence on international aid. However, significant trade barriers remain in the international trading system, in particular in such areas as agriculture, labour-intensive manufacturing and low and semi-skilled services, where developing countries have a comparative advantage. While the problems are addressed within the context of the Doha Development Agenda at the WTO, progress is slow although recent initiatives have raised hopes that a successful conclusion of the Doha Round may still be reached.  Furthermore, along side the blame targeted at the protectionism of developed countries, UNCTAD XI revealed that developing countries also maintain significant barriers on trade among themselves. In this context, the Conference has led to fresh initiatives to stimulate South-South trade and initiate a third round of trade preferences under the Global System of Trade Preferences among Developing Countries and expand membership of the System. Currently, mutual trade of the 44 GSTP members, including 14 ESCAP member countries, was estimated to be close to US$2 trillion in 2000 - or about 55 per cent of the trade of all developing countries. The proliferation of bilateral trade agreements among developing countries, not only in the region but across regions, is also a welcome development as long as such agreements are consistent with the principles and rules of the multilateral trading system. In this regard, we are pleased to see that Thailand has taken a lead in negotiating and concluding bilateral trade agreements with many of its trading partners and has also assumed a role as donor of official development assistance, particularly in the Greater Mekong Subregion, but also in the Asia Pacific region at large and beyond. As such, Thailand serves as a model for cooperation among developing countries which should be actively encouraged.

It is important to note that while increased market access is indeed an essential requirement for a successful development process, it is never sufficient by itself. As long as countries are unable to build productive capacities and strengthen international competitiveness, increases in market access alone will fail to trigger the required growth response. In this context, the Sao Paulo Consensus identifies the need to harness domestic production capabilities and stimulate domestic and long-term external capital flows, in particular foreign direct investment, for investment in productive capacity and technological upgrading, and emphasizes the role of information and communication technology, trade and transport facilitation, and the importance of small and medium enterprises in this regard.

The Sao Paulo Consensus underscores the need for partnerships for development including increased cooperation among the United Nations agencies both at the global and regional levels. Through such partnerships, ESCAP as the regional development arm of the United Nations in Asia and the Pacific, has an important role to play in assisting its member developing countries in gaining market access and their effective integration into the multilateral trading system, including accession to WTO, and in building and strengthening capacities to implement WTO agreements and commitments, adopt consistent and coherent national trade and investment policies, and strengthen supply-side capacities and develop an internationally competitive export sector. For that purpose, ESCAP will continue its policy dialogues, training workshops and research activities to ensure that coherence and consistency of national policies and international agreements and disciplines are effectively realized and that all its members can and will effectively and gainfully participate in the international economy and multilateral trading system.

The importance of the role of the regional commissions, including ESCAP, was also emphasized at the Round Table of Executive Secretaries of the United Nations regional commissions on the theme of "Bilateralism and Multilateralism in the Aftermath of Cancun: Re-Establishing the Primacy of Multilateralism". My colleague, Mr. Ravi Ratnayake, Director of the Trade and Investment Division, will elaborate on this issue in his statement later on.

Excellencies,
Distinguished delegates,
Ladies and gentlemen,

It is evident that we live in a different world compared to, say ten years ago. The unbridled continuation of globalization and current international security concerns have further underscored the need for countries to strengthen their collaboration in many areas, not in the least in trade and investment. Such collaboration may sometimes seem to conflict with the need for national policy space but is essential as it would yield major benefits for all countries. Countries of the region have now embarked on a path that may lead to far-reaching regional economic integration, possibly following the footsteps of the European Union although we may not witness this in the short span of time. However, while the benefits of such cooperation are well understood, firm political commitment and appropriate allocation of resources are required for cooperation to be effective and successful. We at ESCAP stand ready to continue our assistance to all our developing member states in this regard, and in particular to the more vulnerable countries such as LDCs, island developing states, economies in transition, land-locked and small economies, with the purpose to enable them to reap the benefits of globalization and regional integration and cooperation and achieve the internationally agreed development goals, including those contained in the Millennium Declaration.

Thank you.