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Deborah James

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Victory at UNCTAD XIII

Posted: 04/29/2012 12:17 pm

After a week of intense negotiations, civil society groups welcomed a rare victory on Thursday in the final Declaration of the UNCTAD XIII conference in Doha, Qatar.

The final Declaration provides support -- approved by the developing and developed countries alike -- for a strong mandate for UNCTAD's vital work on financial and related crises. Amazingly, this was the most contentious aspect of the text. Developed countries originally even opposed the inclusion of language recognizing the existence of the global financial and economic crisis. A red line for the U.S. was on language mandating UNCTAD to work on the "root causes" of the crisis -- probably because the implied culpability, since the U.S. was the epicenter of the financial crisis of 2008-2009.

The key contested paragraph calls for UNCTAD to "continue, as a contribution to the work of the UN, research and analysis on the prospects of, and impact on, developing countries in matters of trade and development, in light of the global economic and financial crisis." While this mandate could have been broader, negotiators in the G77 group of over 100 developing countries -- together with civil society support -- were able to push back and wouldn't back down.

Why would such seeming innocuous language be so controversial? This is because UNCTAD has been the source of some of the most accurate and comprehensive analyses of the causes and impacts of the global financial crisis and recession. And it has been proposing solutions that are anathema to those who wish to maintain "business as usual" in global economic and finance policies the aftermath of the crisis.

In fact, in a private meeting between U.S. civil society and Robert Gerber, the Deputy Head of the U.S. delegation, he told us that he thought that analyzing "the global economic crisis" itself was outside of UNCTAD's mandate, which was to focus on trade and development. I'm not sure how to make an argument that these things are not related, but I guess when you're the United States at the United Nations, you don't have to have a logical argument.

He also said the language in the text that was most important to the United States was on UNCTAD's efficiency, effectiveness, transparency and accountability; we're looking forward to seeing the U.S. push hard for similar issues regarding the International Monetary Fund (IMF) and U.S. aid in Haiti, among other places.

Why is this fight so important? Of the four institutions that set the rules of the global economy, the IMF, the World Bank, the G20, and the Organization for Economic Cooperation and Development (OECD), the first three are dominated by rich country governments and the fourth is exclusively their provenance. Only the G20 is now attempting to balance decision-making power with developing countries, but only with certain "emerging markets."

Even more importantly, all have been active in maintaining the dominant narrative in favor of deregulation of the private sector, and a weakened role for public oversight by the state, that helped bring about the global economic crisis. These institutions have mostly maintained this agenda, even in its aftermath.

On the other hand, UNCTAD is the only multilateral economic agency in which countries are associated in groups with supposedly similar power. And more importantly, it offered a narrative that is an alternative to the bailouts-for-banks and austerity-for-the-people policies. In the report prepared in advance of this latest quadrennial conference, it posited that "finance-led globalization" had been at the root cause of the crisis, and that given that its impacts have been, and continue to be, felt worldwide, a new model of "development-led globalization" must be implemented.

This perspective evidently didn't sit well many rich countries. According to one delegate, when an official of the JUSCANZ (comprising Japan, the U.S., Switzerland, Canada, Australia, Norway, and New Zealand -- the non-EU bloc of developed countries) was asked directly at one point during the negotiations why he did not want this language included, the representative responded gruffly, "we don't want any competition in intellectual thinking!"

Thus the developed countries organized to water down the text, fighting hard against any mention of the crisis in the policy language, and against any mandate for UNCTAD to work on macroeconomic policies. They also fought against the affirmation of the Accra Accord (Paragraph 16), the mandate from the last UNCTAD conference. This mandate includes work on macroeconomic policies and other key issues that developed countries want to keep within the exclusive provenance of the IMF, the WB, the G20, and the OECD.

How did we get to the point that such basic language was even on the table? It was rumored that the G77, a group of more than 100 developing countries, was in a bit of disarray in the earlier, Geneva-based phase of the negotiations. Since the BRICS (Brazil, Russia, India, China and South Africa) joined the G20, and have also developed their own fora, it seems that they were not as active in strengthening the negotiating position of the G77.

But things started to change as word leaked out about the weakness of the draft text, and groups started to mobilize. The former staff of UNCTAD were so concerned about the earlier drafts that they alerted the public through a letter, pointing out the spuriousness of the OECD countries' objections, and highlighting the importance of UNCTAD's role:

This is neither a cost-saving measure nor an attempt to "eliminate duplication" as some would claim. ... [W]e all fervently believe in the value of maintaining an independent research capability that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.

Then, just before the conference, the BRICS met on the sidelines of the G20 Trade Ministers' meeting. Realizing that a lot was at stake, they issued a statement strongly affirming UNCTAD's important role. Even more importantly, Brazil, India, China, and South Africa lent key negotiating skill and weight to the G77 in the heat of the negotiations. Thus, credit definitely is due to them for maintaining their strong alliance with the larger developing country grouping.

Civil society also raised the alarm through a letter to negotiators -- demanding that they strengthen UNCTAD's role in global governance -- that eventually gained the support of nearly 200 international and national organizations from 47 countries.

Civil society also played an important role during the conference. The International Trade Union Confederation, Public Citizen, the Tax Justice Network, ActionAid International, the Our World Is Not For Sale network and other groups convened side events on issues of investment, financial regulation, the WTO, debt, tax policy, food security, and the social protection floor -- offering incisive analysis on key issues under negotiation within to the conference theme of inclusive and sustainable development.

The Third World Network, the Center for Economic and Policy Research, Jubilee South, the Arab NGO Network on Development, and other groups together held several press conferences and issued almost daily press releases, as well as mobilizing constituencies to contact political officials at home, putting pressure on the negotiators throughout.

Lobbying was also a key strategy. Jubilee USA and other allies successfully lobbied the U.S. to improve language on debt sustainability, and several European groups were able to mitigate the EU's position through appealing to the Norwegian and Finnish governments. And the civil society groups carefully analyzed the text (after receiving leaked copies each day), and sent regular updates to negotiators of the exact paragraphs that were a priority for civil society, with suggestions of improved language. Many G77 negotiators commented that the support they received from civil society was key to the outcome.

The civil society organizations also put pressure directly on the JUSCANZ and EU. In a heated meeting, representatives from Ghana, the Philippines, Argentina, Malaysia, Australia, and the U.S. shared analysis and frustration with the Ambassador from the U.S., and key delegates from the EU and Canada, and the lead JUSCANZ negotiator, the Swiss Ambassador to the WTO and the UN, Luzius Wasescha. The latter chided us that he "felt like he was on trial." After the positions these negotiators had taken at UNCTAD, and the implications of their policies on developing countries, we did not feel sorry for making a negotiator feel uncomfortable for a few minutes.

Negotiators spent days in heated debate. But the pivotal moment came when what began as acrimonious negotiations suddenly came close to a consensus that the G77 and UNCTAD's Secretary-General, Dr. Supachai Panitchpakdi, are celebrating as an important success. This is even more amazing.

On the third day of negotiations "upstairs" where the tough issues were being handled, Ambassador Wasescha made a surprising announcement. He said the JUSCANZ and the EU were prepared to accept the main controversial Paragraphs 16 and 17, if the G77 would give up the paragraphs supporting Cuba and Palestine.

Delegates were outraged. It is common knowledge that countries utilize leverage in negotiations, and horse-trading is the norm. But rarely in diplomatic group negotiations is such tit-for-tat so explicitly expressed.

Fortunately, Mr. Wasescha evidently was missing some key information.

Next, the Palestinian negotiator took the floor. "I would like to inform you that a few minutes ago, the Israeli representative and I came to agreement on the text on Palestine. After futile meetings with the Europeans and the JUSCANZ in Geneva for months, we have come to agreement on language in fifteen minutes. So you cannot use this issue to obtain something else you want," he said. Shortly after, the Cuban negotiator made a similar announcement that an agreement had been reached between his delegation and the United States.

According to sources, the Swiss negotiator looked crushed. It seemed that key leverage had been taken away, and the plan so carefully built over the months of negotiations crumbled. It was a victory for the G77 and China.

More tough negotiations -- until 5 a.m. the last night -- was needed to ensure decent language on the main areas of trade and development, and the interrelated issues in the areas of finance, technology, investment and sustainable development, including intellectual property, commodities regulation, North-South and South-South cooperation, food security, and industrial policy.

Thus today we celebrate that the Accra Accord, and UNCTAD's mandate to work on the issues raised by global economic and financial crises were affirmed.

The language is still not what it should be. But that reflects the crisis of multilateralism in which we live, where the governments of rich countries feel little commitment to ensuring shared prosperity, and the neoliberal paradigm still dominates the most powerful international institutions.

The Civil Society Declaration, which was presented to the delegates during the first plenary meeting, provides a much more comprehensive and accurate representation of the current dynamics in the global economy.

Moving forward, it will be essential for civil society to continue to monitor the implementation of the mandate to prevent backsliding (about which we are already hearing rumors), and to take the struggle over these same issues to the G20 meeting this summer in Mexico.

 
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