A group of 44 developing countries, taking their cue from the new directions of the global economy and international trade, decided Friday to resuscitate an old agreement for promoting trade amongst nations of the South and to launch new trade talks.
This step will give an added push to the dynamism already existing in South-South trade, says Luiz Felipe de Seixas Correa, Brazil's ambassador to the international institutions based in Geneva.
One of the marked characteristics of the current moment in the global economy is the solid trade growth amongst developing countries, fellow Brazilian Rubens Ricupero, secretary-general of the United Nations Conference on Trade and Development (UNCTAD), said in a recent conversation with IPS.
The reactivated accord is the Global System of Trade Preferences Among Developing Countries (GSTP), aimed at promoting mutual trade benefits and at extending economic cooperation amongst nations of the South.
The agreement was established through intensive negotiations in the 1980s by the Group of 77, a bloc of developing countries.
The GSTP member countries are confident that they can improve this mechanism, which in theory is significant, but historically, in practice, was not as effective as hoped, said Argentine trade representative Alfredo Chiaradia, chairman of the committee of participants, the body that oversees the agreement.
The G77, now comprising 135 countries, is the largest coalition acting within the U.N. Its name comes from the original number of members it had when it was founded, in 1964, coinciding with the creation of UNCTAD in Geneva.
The 40th anniversary of the G77 will be celebrated in Sao Paulo, during the annual sessions of UNCTAD, to take place in the Brazilian city Jun. 13-18.
On that occasion, trade ministers from the GSTP countries will convene the agreement's third round of negotiations. The process is to begin in November and last two years.
The current GSTP members plan to invite the rest of the G77 countries to join the agreement, with a special invitation going to China, according to Chiaradia.
China's economic growth has been one of the factors that has driven the expansion of South-South trade, said UNCTAD chief Ricupero, adding that this dynamic is often revived without any specific accord or negotiations.
China's weight in trade within the developing world is essential, but India and other Asian countries wield a great deal of influence as well, producing an increase in trade, he said.
The economic vitality of the Asian giant is reflected in the development of other regions. For example, UNCTAD figures show that the Chinese market took in around 10 percent of Argentina's exports.
In Brazil's case, exports to China represented seven percent of foreign sales, and Brazil sold approximately that same proportion to South Africa, Ricupero said.
The first GSTP agreement, signed in Thailand in 1988, entered into force the following year after 40 countries ratified it. The trade preferences cover 1,826 products, with margins varying between 2.5 and 100 percent.
In contrast, the second round of talks did not produce the desired results, and the system lost its vigour apace with the advance of the globalisation process that favoured vertical trade integration, more along the North-South axis.
Chiaradia attributes the decline to "a series of failures -- functional defects." The GSTP member countries lacked confidence that the exchange of concessions would ultimately take place, so scepticism spread throughout the system, said the Argentine diplomat.
As a result, the offers of concessions -- the basis of the trade accords -- were few and far between, and of limited value. So the "understandings" reached between members did not win ratification from their parliaments, he said.
In the new process to begin in November, the rules will be different. Those who want to obtain trade concessions and preferences for their products will have to pay by offering other preferences, Chiaradia said.
Brazil's Seixas Correa is pleased with the decision to relaunch the GSTP because it opens the way for further and more profound trade negotiations amongst developing countries in the UNCTAD sphere.
Ricupero reckons that the UNCTAD meeting in Sao Paulo will be an opportunity for the reaffirmation of the developing South, but, he said, it will not be made in ideological terms, as it often was in the past.
Today, the system will be consolidated through concrete phenomena: an increase in South-South trade and renewal of negotiations, he said.IPS-Inter Press Service:
