Representatives of civil society organizations, member States, the Inter-Parliamentary Union, and L´Organisation Internationale de la Francophonie discussed "the new regionalism" and "capturing the benefits of globalization" during their annual hearing before the Trade and Development Board. The hearing was held the afternoon of 2 October.
The "new regionalism"
Several participants said the "new regionalism" and multilateralism were not incompatible, as the World Trade Organization (WTO) provided for derogations with respect to free trade agreements. Bilateral free trade agreements and regional integration schemes involving such agreements provided a basis for further trade liberalization at the WTO and for the integration of developing countries into the global economy. However, some participants considered the growing number of free trade agreements to be a consequence of developing countries´ dissatisfaction with the lack of progress in WTO negotiations. Free trade agreements between developed and developing countries were thought by some to undermine the development potential of less developed countries, even though such agreements were also seen to have some benefits. Since there was asymmetry in supply capacity, the developing countries could not benefit as much as developed countries from reciprocal market access to trade or from other measures related to free trade agreements such as investment or public procurement, as stressed in the Trade and Development Report 2007.
It was thought to be in the best interests of developed countries to allow developing partners some room for manoeuvre in their development strategies, although it was pointed out that the concept of "policy space" needed to be defined more clearly. Each country was sovereign in its decisions on free trade agreements, some of which provided for adequate transitional periods for developing countries. Participants called on UNCTAD to elaborate further at UNCTAD XII on developing countries´ policy space and to continue research in that area. At the national level, they said, appropriate social measures would be needed to cushion the negative impacts of free trade agreements. Another way to mitigate those impacts would be to link aid disbursements to trade reform, particularly through Aid for Trade. The importance of building up national institutions to enable them to evaluate the impact of free trade agreements was also stressed.
Capturing the benefits of globalization
A number of speakers focused on the need to address the social costs of globalization. Delegates noted increasing disparities between and within countries as a result of increased economic liberalization and globalization, even if, overall, poverty was being reduced. Populations in developing countries, especially women, were subject to increased social and economic insecurity, which was exacerbated by a multilateral trading system that was poorly reconciled with people´s needs and was unable to fulfil the development aspirations of the Doha round of WTO trade negotiations. The South-to-North brain drain was said to undermine the ability of developing countries to develop through knowledge accumulation.
A number of delegates said action was needed at the international level. They called on UNCTAD to place greater emphasis on the promotion of inclusive globalization through exploring social protection and social dialogue; through studying the gender perspective of globalization; through attention to environmental damage; through greater accountability and transparency in the multilateral trading system; through reforms to the international financial architecture; and through ways to increase official development assistance flows and ensure a better distribution of benefits in the supply chain.
Several delegates said Governments of developing countries needed to do more to ensure social protection, promote pro-poor and gender-neutral growth, and regulate transnational corporations. Civil society had a role to play in helping Governments to create investment- and business-friendly environments and promote social investment. In addition, it was felt that promoting small and medium-sized enterprises could help create a bridge between the activities of transnational corporations and the social and economic needs of populations in developing countries.
