WORLD TRADE  
ORGANIZATION  WT/MIN(05)/ST/54 
15 December 2005 
 (05-6062) 
MINISTERIAL CONFERENCE 
Sixth Session Hong Kong, 13 - 18 December 2005 Original:   English 
 
  
UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP) 
 
Statement Circulated by the United Nations Development Programme
 
 
 (As an Observer) 
 
Context  
 
 The September UN Summit in New York raised hopes that 2005 would be a year during 
which significant progress would be made on the inte rrelated issues of aid, debt and trade.  While 
much still remains to be done, advances have been ob served on both aid and debt during the year.  It 
is now evident, however, that progress in the D oha Round has been sluggish.  As a result, the 
contribution of trade to MDG achievement, argua bly the most important leg of the development 
tripod, has lagged. 
 
 Yet trade is at the core of the interdepe ndence that binds countries together and global 
multilateral trade rules have the potential to bene fit both industrialized and developing countries.  
When properly harnessed, trade has contributed both to  economic growth and to some highly visible 
human development advances, enabling millions of  people to escape poverty.  However, current 
patterns of liberalization and globa lization, while creating new opportunities and prosperity for some, 
have simultaneously exacerbated inequalities between bot h rich and poor people and countries.  It is, 
therefore, imperative that the Doha Round should l ead to an expansion of trade and economic growth 
which particularly benefits de veloping countries and their mo re vulnerable population groups. 
  UNDP considers the MDGs as a global compact which seeks to achieve this, based on joint 
responsibility and mutual accountability.  But the sl ow progress in the Doha Round negotiations has 
raised serious doubts about whether the global partne rship for development agreed in Monterrey and 
embodied in MDG 8 will be deliverable by 2015.  Trade Capacity Development for the MDGs
 
 
 In view of the challenges posed by the MDGs, a substantial scaling up of "aid for trade" to 
LDCs and other low-income countries is necessary to strengthen their domestic productive capacities, 
overcome institutional and human resource constraint s, and deal with trade facilitation and other 
supply side issues.  In addition to a significantly enhanced Integrated Framework for Trade Related 
Technical Assistance for the LDCs (IF), support is also required for national and regional trade related 
infrastructure projects as well as fiscal adjustment to trade liberalization, preference erosion and other trade shocks.   UNDP places great importance on its role in tr ade capacity development at the country level 
and believes that strengthening both the domestic  productive capacities of developing countries and 
dealing with their other supply side constraints in the context of national development and poverty 
reduction strategies should be given high priority.  However, such support w ill not be effective or WT/MIN(05)/ST/54 
Page 2  
 
 meaningful without additional, predictable donor r esource commitments within  an agreed multi-year 
replenishment cycle.   While there is broad consensus on this, many de veloping countries are concerned that "aid for 
trade" might become part of the overall negotiatin g package for the Doha Ro und, instead of just a 
complement to it.  UNDP believes that "aid for tr ade" should be recognized as legitimate in its own 
right and should not become a substitute for an ambitious developm ent outcome from the 
negotiations.  It should be viewed as complementar y and will require substan tial additional resources 
if MDG achievement is not to be jeopardized.  
UNDP Engagement in trade and development
 
 
 UNDP has prioritized trade policy issues at national, regional and global levels from a human 
development perspective.  This  became necessary not only in light of the organization's human 
development and inclusive globalization mandates, but also  because of its lead role in the MDGs, and 
the centrality of trade issues for the  achievement of MDG 8 and many of the other millennium 
development goals.   UNDPs country-specific, regional and global trad e-related projects seek to address three core 
capacity development needs.  These are:  
(i) The capacity to compete internationally  by overcoming institutional, human, and 
other supply side bottlenecks; 
 (ii) the capacity  to negotiate, interpret and implemen t trade agreements (multilateral, 
regional, and bilateral) in a manner wh ich prioritize poverty reduction and human 
development concerns;  and 
 (iii)  the capacity to integrate pro-poor trad e policies in national development strategies. 
  UNDP remains committed to prioritizing these three capacity development needs in the 
future.  Its own capacity to implement such projects has considerably strengthened in recent years.  Its 
global team of trade policy advisers is located in New York, Geneva, and all the major regions of the 
developing world.   On the IF, UNDP works in close partners hip with the other five core agencies  (WTO, 
UNCTAD, World Bank, IMF and ITC) which are i nvolved in this initiative.  UNDP serves as trust 
fund manager and lead agency for the capacity development component.  With the expected 
enhancement of the IF, UNDP expects to leverage it s almost universal presence at the country level as 
well as its traditional in-country role in capacity development and aid coordination to scale up IF support.   At the regional level, the UNDP Asia Pacific Trade and Investment Initiative, now already in 
its second phase, is designed to strengthen the capacity  of developing countr y governments to make 
linkages between trade, poverty reduction and human development and translate these into both their 
domestic and international trade policy.  Particular  attention is also being placed on assessing both the 
fiscal implications of trade liberalization and the human development impact of the phase-out of textiles and clothing quotas in Asia n LDCs with a view to exploring policy options for the future.  A 
UNDP multi-year regional trade, poverty reduction and human development programme is currently 
under implementation in Africa with strong IF syne rgies.  A similar programme is about to be 
launched for the Arab States region.  UNDP also  has global programmes such as on Intellectual 
Property and Access to HIV/AIDS drugs whic h seeks to support implementation of the Doha 
Declaration on TRIPS and Public Health and its 30 August 2003 paragraph six decision which,  WT/MIN(05)/ST/54 
 Page 3 
 
 
 following the 6 December 2005 General Council decision is  to be incorporated as an amendment of the 
TRIPS agreement.  Hong K ong and beyond
 
 
 Despite important steps forward including con sensus on the importance of "aid for trade", 
much in the development agenda of the Doha Round  remains unfinished.  Given that so many poor 
countries are struggling to cope with balance of payments and other difficulties associated with rising global oil prices, it is particularly important that  the development dimension of the Round delivers 
market access in industrialized countries for products of  particular interest to low income developing 
countries.  As a result, UNDP believes that Memb ers should, at minimum, reach consensus on the 
following issues in Hong Kong, which if agreed, will en sure the achievement of an "early harvest".  
This will also signal that, despite the lowering of  ambitions, the Hong Kong Ministerial Conference 
succeeded in maintaining the momentum for a development outcome.  
• Duty-free, quota-free market access for LDCs to all OECD countries and to 
developing countries that can afford to provi de this, such as Brazil, India and China 
and including flexible rules of origin; 
 
• a substantial package of special and differential treatment measures which are of 
particular importance to LDCs; 
 
• in agriculture, an end date (2010) for the phase-out of all agricultural export subsidies 
and trade measures which adequately address the cotton subsidy concerns of West 
and Central African states;  and 
 
• a concrete commitment to an enhanced Integrated Framework for Trade Related 
Technical Assistance for the LDCs as well as a broader "aid for trade" package for 
developing countries. 
 
 UNDP also strongly advocates that the current consensus on prioritizing the development 
dimensions of the Doha Round is strengthened afte r Hong Kong.  If this is to happen, significant 
progress from a developmental perspective will be re quired in at least four more areas that are 
currently under negotiation and are of vital interest  to developing countries.  These are agriculture;  
industrial tariffs;  services;  and special and differential treatment. 
 
(i) Agriculture 
 
 The current impasse in agriculture needs to be overcome as this is the key to  unlocking 
progress in other areas of negotiation.  In addition to an 'early harvest' agreement on 2010 as the deadline for the phase-out of export subsidies from all OECD countries which should be agreed in 
Hong Kong, action will be required in (a) significantly improved  developing country market access to 
OECD country markets including reduction in their tariff peaks and tariff escalation which makes it difficult  for developing countries to add value to their unprocessed commodities and other pr oducts;  
and (b) specific reduction commitments  in OECD domestic farm support. 
 (ii)  Industrial tariffs 
 
 It is essential that any agreement in the area of non-agricultural market access (NAMA) 
reaffirms the potentially strategic role that trad e policy can play as an effective tool for an 
industrialization strategy.  Developing countries shou ld be allowed to maintain policy space for their 
industrial and employment objectives and in order to avoid acute economic and social adjustment 
costs.  Both industrialized countries and more i ndustrialized and rapidly i ndustrializing developing WT/MIN(05)/ST/54 
Page 4  
 
 countries such as China, Brazil and India should be willing to make greater concessions in industrial 
tariff negotiations than poorer or less industrialized developing countries.  
(iii)  Service 
  Strategic and selective liberalization in services trade has the  potential to benefit both 
developing and industrialized countries and can enhance human development outcomes. 
  Developing countries should be willing to incr ease both the quality and number of their offers 
after a comprehensive assessment of their needs, and consistent with MDG achievement.  A genuine 
development round will also require industrialized countries to make substantive offers in service 
areas of interest to developing countries such as GATS Mode 4.  
(iv)  Special and Differential Treatment 
  The principle of S&D treatment is of crucia l importance to developing countries and should 
protect their right to development.  There is an urgent need to prioritize those proposals of most 
interest to all developing countries and reach agreement on them early in 2006.  
  Finally, UNDP recognizes that the developmen t dimensions of the Doha Round are broader 
than the areas prioritized above.  Nevertheless, ta ngible and early progress in these areas, both at and 
after Hong Kong, will create the necessary confiden ce among Members and contribute to the 
perception that a timely and successful conclu sion of the Doha Round is still possible by 
December 2006.  Progress in these ar eas will also represent a significan t step forward in making, the 
global trade regime more "development friendly" a nd better oriented towards the achievement of both 
the MDGs and enhanced human development outcomes. 
 
__________