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South Centre Analytical Note - November 2005 SYNOPSISThis note presents the commodity problems and their implications for Commodity Dependent Developing Countries (CDDCs); (ii) identifies the underlying causes of these problems and (iii) examines some of the major policy approaches used in the past to deal with them, their merits and limitations. The objective of the paper is to provide an overview of the problems and implications of heavy dependence on primary commodities. In doing so, the paper contextualizes the various issues that are envisaged to be discussed in the South Centre Seminar on Commodities and Development. South Centre Analytical Note - October 2005 SYNOPSISThis TRADE Analysis provides a brief overview of the “Coherence” agenda in the World Trade Organization (WTO) and tries to inject a new perspective on how such agenda can be made to serve the development goals and interests of developing countries. It emphasizes that the recognition of “policy space” and the placement of development goals as the central foci of coherence in global economic policymaking, can be used to form the core of a more positive “Coherence” agenda in favor of developing countries’ development interests in the WTO and the Bretton Woods institutions. South Centre Analytical Note - October 2005 SYNOPSISThis TRADE Analysis discusses selected aspects of the WTO dispute settlement system that developing countries should consider as they continue to engage in the DSU negotiations. South Centre Analytical Note - August 2005 EXECUTIVE SUMMARYMany developing countries are rich in natural resources and in particular mineral commodities. While the extraction and processing of mineral commodities through large scale mining can make a major contribution to the economies of developing countries by providing export and fiscal revenues, it can also raise economic, environmental and social issues that pose policy dilemmas from the Government’s perspective. This paper identifies the limitations derived from the external setting that are faced by developing countries to design, implement and enforce laws and policies intended to foster a developmental strategy based on mineral commodities. The purpose of this paper is to highlight challenges that do not seem to be fully recognized by the “good governance” discourse on decisions related to the extraction and production process of mineral commodities. This paper is structured in four sections. The first one describes the mining production process and the location of mineral resources and specialization patterns. The second section explains the general characteristics of the large-scale intensive mining industry and the operations of Transnational Corporations (TNCs). The final section identifies challenges faced by developing countries to engage in this sector in view of this context and presents policy recommendations. South Centre Analytical Note - August 2005 INTRODUCTIONMany developing countries are rich in natural resources and in particular mineral commodities. While the extraction and processing of mineral commodities through large scale mining can make a major contribution to the economies of developing countries by providing export and fiscal revenues, it can also raise economic, environmental and social issues that pose policy dilemmas from the Government’s perspective. In that context, the purpose of this paper is to identify the limitations developing countries face to design, implement and enforce laws and policies intended to foster a developmental strategy based on mineral commodities. This paper is structured in four sections. The first one describes the mining production process, the location of mineral resources and specialization patterns. The second section explains the general characteristics of the large-scale intensive mining industry and the operations of transnational corporations. The final section identifies challenges faced by developing countries to engage in view of this context and presents policy recommendations. South Centre Analytical Note - August 2005 EXECUTIVE SUMMARY (excerpt)A supply management programme can be defined as a policy tool that controls the production and supply of a commodity in order to achieve a desirable price objective in a relevant market. The relevant market could be domestic or international. Many governments in developing countries, NGOs, civil societies, producer organisations and academics have recently voiced their support for the reintroduction of supply management programmes for addressing some aspects of the commodities problem. The importance of supply management as a mechanism for addressing certain aspects of the problems of tropical cash crop commodities is justified by multiple cases of market failure, particularly structural oversupply of commodities, which market forces cannot fully correct. However, supply management schemes are neither applicable to all commodities nor panaceas to the commodities to which they can be applied. Supply management programmes can be broadly categorised into domestic (national) and international schemes based on the nature of commodities covered under them and on their objectives. By the nature of commodities covered by the scheme, it means whether the commodities are tradable domestically or internationally. By objective, it means whether the primary target of the scheme is the domestic or international market. South Centre Analytical Note - April 2005 INTRODUCTIONInformation on non-agricultural commodities is not as widely available as for agricultural commodities. The purpose of this paper is to identify, in contrast to agricultural commodities, what is the extent of dependency of developing countries on non-agricultural commodities, what are the main characteristics of this dependency, which developing countries are most dependent on this type of commodities and what are the challenges they face in the trade arena and from a wider developmental view. Many developing countries are highly dependent on non-agricultural commodities. Although declining prices, price fluctuations, commodity export dependence and lack of diversification are similar to agricultural commodities, there are other issues with pose specific challenges to their sustainable development. This paper is structured in the following manner: we will first define what nonagricultural commodities are, then we will identify which commodities developing countries are most dependent on, we will examine their trade patterns and price tendencies and then we will identify the challenges faced by developing countries dependent on non-agricultural commodities. South Centre Analytical Note - November 2004 INTRODUCTIONA large number of developing countries heavily rely on a narrow range of primary commodities for their export earnings. Similarly, millions of people in developing countries depend on the production of primary commodities as a sole means of income for daily life. Therefore, commodity price instabilities and deteriorations have detrimental welfare impacts for commodity dependent developing countries. Empirical evidences vastly documented that commodity prices in general exhibit excessive fluctuations and secular declines. As a result, stabilisation of commodity markets at remunerative price levels through international commodity agreements (ICAs) was envisaged as crucial for fostering macroeconomic stability and growth. For this reason, the establishment of the Integrated Programme for Commodities (IPC) at UNCTAD IV in Nairobi in 1976 under the auspices of the United Nations and the successful completion of negotiations to establish the Common Fund for Commodities (CFC) in 1980 to finance ICAs for the full extent of their requirements for buffer stock operations marked a new era of optimism. However, the decades that followed the establishment of the IPC programme and the CFC ushered an era of despair and pessimism for primary commodity producing countries. Starting from the collapse of the tin agreement in 1985, market stabilisations through ICAs have been obliterated. The periods followed the demise of the ICAs have been characterised by mistrusts and suspicions of market stabilisation policies; and advocacies for neoliberal commodity markets. Moreover, commodity price risk management instruments have been championed as viable and better alternatives for market stabilisation policies. The objective of this paper is to cautiously analyse whether leaving commodity markets to operate in unfettered fashion while hedging commodity price risks through the use of commodity risk management instruments is a viable and better alternative than market stabilisation policies. The rest of the paper is organised as follows: section II thoroughly analyses the objectives, instruments, designs, operations and the demises of the ICAs. Section III briefly looks into the characteristics of commodities under neoliberal markets with a particular emphasis to the welfare consequences of commodity market liberalisation. Following that, section IV outlines the benefits and limitations of the commodity risk hedging instruments in the context of their suitability and adaptability to the conditions that producers in developing countries encounter. South Centre Analytical Note - September 2004 INTRODUCTIONOn 31 July 2004, the WTO General Council decided to establish a framework for continued negotiations under the Doha Work Programme set out in the Doha Ministerial Declaration (DMD, WT/MIN(01)/DEC/1) of 2001. This note seeks to present a content analysis of the WTO General Council Decision of 31 July 2004 (WT/GC/W/535). The analysis of the main text of the July Decision in the first part of this Analytical Note is arranged according to the substantive issue areas identified in the DMD for either negotiations or discussions as linked to the relevant texts in the July 2004 General Council Decision. It also identifies the new negotiating timeframes established for each negotiating area and provides a brief analytical comment on the extent to which the July 2004 Decision impacts on the original Doha mandates. For ease of use, the Analytical Note has been divided into four main parts. Part I analyzes the main text of the July Decision, followed by Parts II, III, and IV, devoted to the analysis of Annex A (Agriculture), Annex B (Non-Agricultural Market Access), and Annex D (Trade Facilitation), respectively, of the July Decision. It is hoped that this note will be useful to readers as the implementation of the mandates in the July Decision proceed after the summer of 2004. Part I (Main text - A Content Analysis) Part II (Annex A, Agriculture Modalities) South Centre Analytical Note - June 2003 INTRODUCTIONParagraph 51 of the 2001 Doha Ministerial Declaration provides a unique but ambiguous mandate for the WTO’s Committees on Trade and Development (CTD) and on Trade and Environment (CTE). It requires that these two bodies “within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected.” This mandate attempts to implement WTO Members’ desire to ensure that the Doha Round trade negotiations promote the objective of sustainable development. This objective is deeply embedded in the WTO framework. Explicit references to it can be found in the WTO’s constitutional legal instrument – the Marrakesh Agreement to Establish the World Trade Organisation – and in subsequent WTO legal texts, such as the 1994 Ministerial Decisions on Trade and Environment and on Trade in Services and the Environment, and the 1996 and 2001 WTO Ministerial Declarations. The WTO Appellate Body in the US – Shrimps-Turtle dispute also stated that the objective of sustainable development recognised in the WTO Agreement’s preamble “informs” all of the covered agreements. The proper and effective implementation of the Paragraph 51 mandate could be the key to ensuring that the Doha trade negotiations result in a final outcome that promotes the sustainable development needs and priorities of developing countries and is consistent with the earth’s long-term ecological carrying capacity from the local to the global level. South Centre Analytical Note - September 2002 SUMMARYThe existence of a relationship between trade and debt is a contentious issue. In fact, a clear divide exists between developed and developing countries regarding the subject, a division which has necessitated the formation of the Working Group on Trade, Debt, and Finance (WGTDF) within the World Trade Organization (WTO). This paper is of the opinion that such a relationship does exist and that it has been and continues to be of a particularly negative nature. The problem of large debt overhangs in developing countries is unequivocally a result of the particular circumstances of their terms of trade within the international economic system. For this reason, the objective of this paper is to examine the impact of world trade conditions on the increasing debt burden, and the effect of external indebtedness on the trade performance of developing countries with a view to providing remedial measures and flexibilities within WTO provisions. South Centre Analytical Note - July 2002 SUMMARY (excerpt)This paper provides a general background to the issues of Trade, Debt, and Finance, and what role they may have in future World Trade Organisation (WTO) negotiations envisioned through the Working Group on Trade, Debt, and Finance (WGTDF). Its aim is to assist developing countries in effective participation in the work programme of the WGTDF, by underscoring the main issues and objectives, and offering suggestions for future work. It considers the context of the interrelationship of these three issues, noting the condition of the world economic system as run by the Bretton Woods institutions (IMF and World Bank) and the WTO. Since a Northern, neoliberal economic perspective permeates these institutions, developed country interests continue to take centre stage in the negotiating and decision-making processes. It is these interests which set the agenda on development and the relationship between trade, debt, and finance issues. Despite the inherent flaws in these bodies, efforts to reform policies and institutions recently have been unsuccessful. An example is the UN Conference on Financing for Development (FfD) held in Monterrey earlier this year. The paper then proceeds to examine how these institutional and systemic flaws are reflected in global trade and finance, as well as through the burden of debt faced by developing countries. Trade issues include the nearly acrossthe- board dependence on the export of primary commodities. This is largely responsible for the vulnerability of developing countries’ economies to price swings (albeit generally on a downward trend) and their continued existence at the bottom (if even included) of any chains of production, and subsequently, for their poor trade performance. Additional trade issues include the persistence in usage of tariffs and non-tariff barriers to trade by developed countries. South Centre Analytical Note - May 2002 BACKGROUND (excerpt)By placing Special and Differential Treatment (hereafter referred to as ‘S&DT’) at the heart of the WTO Agreements, the Doha Ministerial Declaration explicitly acknowledged that S&DT is a fully accepted core principle in the WTO legal regime. Special and Differential Treatment should not be understood as a set of concessions made in favour of developing countries -- and the objectives recalled in the preamble of the Doha Ministerial Declaration are clear about this-- but as a right that these countries acquired in order to have a chance of participating in the multilateral trading system. |
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