. /.WORLD TRADE
ORGANIZATIONWT/WGTDF/W/20
2 April 2003
(03-1849)
Working Group on Trade, Debt and Finance Original:  Spanish
COMMUNICATION FROM ARGENTINA
The following is a statement made by the representative of Argentina at the meeting held on
28 March 2003.
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1. The various empirical presentations and papers submitted by different experts in the Working
Group have made it quite plain that trade policy plays a fundamental role in the development and
economic growth strategies of countries.  They ha ve also stressed the growing importance of export
dynamism for the financially stricken indebted co untries.  Hence the emphasis on the need to find
comprehensive and innovative trade solutions to alleviate and overcome the debt problem by
facilitating market access for developing country and LDC exports.  My delegation would like to
present Argentina's views on certain essential elemen ts that call for special treatment by the Working
Group.
2. Generally speaking, and particularly in the current international economic and financial
circumstances, export dynamism is practically the only remedy available to the highly indebted
countries to alleviate the debt adjustment burden.  A case in point is the situation of the Latin
American and Caribbean countries.  The reduced economic growth in the region over the past years,
coupled with the decrease in net capital flows towards the region, has substantially reduced the
resources available to service the external debt.  1998 was the last year in which there was a positive
net transfer of resources.  After that, there was a decrease in outlays, while amortization and interest
payments increased.  Over the three-year period from 1999 to 2001, net debt transfers in the region(net debt flows minus interest payments, in accordance with the World Bank methodology) was
- 132.5 million dollars.
3. The problem of indebtedness in the developing and least-developed countries significantly
impairs their capacity to share in the benefits of the multilateral trading system.  The capacity of a
country to service the external debt clearly depends on its trade balance.  Thus, a deterioration in theterms of trade, the stagnation of export markets, and market access restrictions make it difficult for a
country to honour its external debt commitments, causing financial instability and monetary
disruptions which, in their turn, have a negative impact on growth and economic development.
4. The Working Group examined the relationship betw een the external debt and trade, and was
able to confirm that in spite of the considerable ef forts and adjustments made with a view to resolving
their debt problems, the highly indebted developing and least-developed countries had not yet been
able to improve their situation.  An increase in  export revenue, however, could significantly reduce
the foreign exchange restrictions and thereby contribute to the "sustainability of the debt".  During the
discussions in the Working Group, Members insisted on the fact that the main contribution that the
WTO could make was to increase market access in the areas of interest to the indebted countries.  As
already stated on other occasions, this is a central issue in the Work Programme agreed upon by theMinisters in Doha.WT/WGTDF/W/20
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5. The provisions of the Marrakesh Agreement rela ting to the external financial situation of a
country are contained in Articles XII, XVIII:b a nd XXXVIII of the GATT 1994;  Article XII of the
General Agreement on Trade in Services;  and the Understanding on the balance-of-payment
provisions of Article XVIII of the GATT 1994.
6. The above provisions have been invoked to implement temporary restrictions for balance-of-
payments reasons or in order to safeguard the external financial situation by controlling the general
level of imports.
7. In each case, these are trade restrictive measures aimed at controlling imports, whose
objective is not to generate foreign exchange that could be used to service the external debt.  They do
not suffice to overcome the problem of high indebtedness.
8. Bearing in mind that exports constitute the principal means of generating foreign exchange
and building up reserves for the highly indebted developing countries, there is a pressing need forthose countries to enjoy greater access to export markets for those products in which they have a
comparative advantage, and in particular, for those products that are intended for the markets of the
developed countries which, in most cases, are their main creditors, public or private.  The need for
substantial increase in exports is more urgent still in countries where indebtedness has reached critical
levels.
9. Since exports from the developing and least-developed countries consist mainly of primary or
agroindustrial goods which are subject to non-tariff barriers and higher tariffs – on average – than
industrial goods, it is essential to develop measures that would improve market access for those
products.
10. The above considerations show that the multilateral trading system currently lacks an
appropriate mechanism for expanding market access for the highly indebted developing and least-
developed countries.  The Working Group could make a significant contribution towards solving
these problems by conducting a more thorough analysis of the means or instruments that the
multilateral trading system would require to enable the highly indebted developing countries to
increase their exports in proportion to their level of indebtedness.
11. In short, Argentina considers that the examination of how the multilateral trading system
could contribute to a lasting solution to the problem of the high level of external indebtedness of the
developing and least-developed countries constitutes a key element of the mandate provided by the
Ministers in Doha.  Accordingly, Argentina proposes that the Working Group recommend to the
5
th Ministerial Conference possible actions and measures relating to market access that could be
adopted in the framework of the WTO in order to enable the highly indebted developing and least-
developed countries to overcome this critical situation.
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