Geneva 26 May 2004

Contrary to the general perception that globalisation and rules-based multilateral trading system eroded trade amongst countries in the South, a new silent revolution is taking place in trade and economic cooperation among the developing countries.

“At present 43 percent of South’s trade is with other developing countries, which accounts for about 11 percent of global trade. And this number is growing at a rate of around 10 percent per year, which is double the growth rate of global trade” said Lakhmi Puri, Director of United Nations Conference on Trade and Development (UNCTAD), Geneva.

She was speaking at a Panel Discussion at the World Trade Organisation (WTO) Symposium organised by CUTS Centre for International Trade, Economics and Environment (CUTS-CITEE) on 26th May.

Mrs Puri emphasised that South-South trade, in particular, and technological and economic cooperation, in general, gets a role to play in development of Southern countries in a more globalised world. However, what needs to be done, and yet to be done is a daunting question.

South-South cooperation has received new thrust at the recent Cancun Summit of the WTO, where India, Brazil, South Africa along with 17 other countries formed the Group of 20 (G-20) which effectively lobbied for protecting the interests of developing countries in the global agricultural trade.

“Cancun in that sense was a turning point in the international trading system, where the Southern solidarity expressed itself quite authoritatively. As things stand today, the solidarity will sustain in spite of any contrarian efforts by the powers”, said CUTS Secretary General, Pradeep Mehta. “There is too much at stake”.

New initiatives to cement developing country cooperation will be launched at the 11th conference of UNCTAD, taking place in Sao Paulo in June. Most importantly, the Third Round of Generalised System of Trade Preferences (GSTP), which provides preferential tariffs for trade among the South will be launched in Sao Paulo.

Technical cooperation, technology transfer and capacity building are other growing areas, which complement the economic cooperation among the South. Dr Nagesh Kumar, Director General of Research and Information Systems (RIS), New Delhi highlighted the logic and feasibility of South-South technical assistance and capacity building for more meaningful cooperation between developing countries, which will benefit them all. Explaining his case, Dr. Kumar cited the experience of a diary firm in Africa which sought technical assistance from Europe for processing milk products. The answer that they got explains it all. “Sorry, but we cannot help you to deal with the situation where temperatures go up to 45oC, as we have experience of working only in temperatures below 20oC”. This was a striking example of how technical assistance needs to be obtained from others with similar situation.

“Cooperation in South Asia can be enhanced if Least Developed Countries such as Bangladesh, Nepal and Bhutan are given better market access opportunities by large developing countries such as India and Pakistan” said Ambassador Toufiq Ali of Bangladesh.

Though all the developing countries require special and differential treatment the poor amongst them should be granted special conditions, said Werner Corrales, former Ambassador of Venezuela to the WTO. This sentiment was echoed by Mr. Paulo Mesquita, Counsellor in the Brazilian Mission. The panel discussion was moderated by Razeen Sally of the London School of Economics.