Market Access: The Persistence of Barriers.

For the International Chamber of Commerce (ICC) - the only organization that represents business throughout the world-unfettered access to markets has always been a fundamental goal. There is no way that our resolute support for the free flow of goods and services and for further liberalization of the multilateral trading system will ever slacken.

ICC consists of companies and associations of every size, representing every business sector and from every part of the world. It follows that we have no

special sectoral or regional interest to promote in preference to any other. In the context of the United Nations, it is worth stressing that we have always considered that the full integration of developing countries into the global economy and their ability to reap the benefits of trade and investment liberalization are important measures of the success of globalization.

Since the end of the Uruguay Round and the establishment of the World Trade Organization (WTO) in 1995, market access has been substantially improved by multilateral agreements on basic telecommunications services (February 1997), information technology products (February 1997) and financial services (December 1997).

Other useful steps have been the hunch of a trade-related inter-agency technical assistance programme for least developed countries (LDCs) and the announcement by several countries of tariff reductions or eliminations on exports from LDCs, alongside other preferential access measures.

ICC members in developing countries consistently point out that. hand in hand with the requirements of market access, structural challenges faced by their economies must also be resolved.

These structural challenges must be faced if developing countries are to benefit fully from opportunities created by trade and investment liberalization and globalization. For our members, the five key points are:

* A stable political system, supported by a professional and accountable public service;

* A comprehensive, transparent and non-discriminatory legal framework conducive to modern commercial operations;

* Sound macro-economic, fiscal and monetary policies;

* A dynamic market economy and the need to support an expanding domestic market, growing demand and purchasing power, a healthy local private sector and efficient and soundly regulated capital markets and financial services; and

* Rising standards of education, health care and social infrastructure.

An informal survey of ICC members in selected developing countries produced concrete examples of market access barriers to goods and services. The main conclusion was that, despite significant improvements resulting from the Uruguay Round, important barriers continue to affect exports of goods and services from developing countries. Responses showed four main categories:

Quantitative restrictions: A majority of ICC members in developing countries commented on export quotas and other quantitative restrictions, such as seasonal restrictions, on their exports to industrialized and other developing countries. Many of these measures applied to agricultural products, textiles and footwear. Some of the members surveyed explained that a number of these quantitative restrictions were due to regional preferential arrangements, whereby products from certain developing countries were treated less favourably than competing products from other developing countries on the basis of origin.

Sanitary and phyto-sanitary regulations: Several respondents mentioned sanitary and phyto-sanitary regulations as significant barriers to market access for their agricultural products (fruits and vegetables, in particular) into industrialized country markets. Some explained that their inability to meet sanitary and phyto-sanitary standards required by certain industrialized countries restricted their ability to take advantage of potential market opportunities.

Technical barriers to trade: According to respondents. inability to comply with national technical standards, particularly in developed country markets, and international technical standards and requirements prevented them from taking advantage of export opportunities. They gave several specific examples of technical barriers to trade, including packaging requirements, ecolabeling regulations and certification requirements for international standards developed by the International Organization for Standardization.

Anti-dumping measures: Some respondents reported that products from their countries were increasingly becoming the targets of anti-dumping actions. While most of these actions originate in industrialized countries, developing countries are increasingly resorting to them.

Respondents also listed market access barriers to services in sectors such as basic telecommunications and maritime and air transport, as well as lack of transparency in government procurement practices. A few mentioned cumbersome and unpredictable customs procedures and documentary requirements as causing significant difficulties.

A few key business priorities in the context of WTO work should be mentioned:

* Further tariff liberalization must pursued in the context of the WTO built-in agenda, such as work to expand participation in zero-for-zero and tariff harmonization agreements. In addition, WTO members should explore measures to further reduce or eliminate tariffs on a most-favoured-nation basis. Particular attention should be paid to substantially reducing tariff peaks, eliminating tariffs that are already very low and the extension of tariff bindings, especially for products for which tariffs remain very high.

* We must achieve greater reform of agricultural policies and further reduce agricultural support and protection in the context of "in-built" WTO negotiations on agriculture due to begin in the year 2000. Further liberalization of agricultural trade would greatly contribute to improved market access for exports of developing countries, particularly from the least developed among them.

* We must expand and improve the quality and scope commitments on market access and national treatment in the future "in-built" negotiations under the General Agreement on Trade in Services.

* WTO work on trade facilitation, launched in Singapore, must be carried forward by focusing on the simplification of customs procedures.

* We should also consider a common approach to establish a consistent and truly global framework for cross-border investment ICC is currently working with the United Nations Conference on Trade and Development on the preparation of investment guides for selected least developed countries.

* Finally, we need to pursue WTO work on the interaction between trade and competition policy, including anti-competitive practices that restrict market access.

These reflections are based on the practical business experience of ICC members in developing countries. They are intended as a constructive contribution to ensuring that the benefits and opportunities of trade and investment liberalization and globalization accrue to all and, in particular, to those who need it most in the developing world.

The UN and Business: A Global Partnership

In what ways are business and the United Nations working together? Consider these facts:

* The UN provides the "soft infrastructure" for the global economy. It sets technical standards and norms in such diverse areas as statistics, trade laws, customs procedures, intellectual property, aviation, shipping and telecommunications, thus facilitating economic activity and reducing transaction costs.

* The UN prepares the ground for investment in emerging economies, by promoting political stability and good governance, battling corruption and human rights abuses, urging sound economic policies and business-friendly legislation, and working to improve health, education and social well-being. It addresses the down side of globalization, by fighting transnational crime, the traffic in drugs, arms and people, and other "problems without passports". Much of its operational work in over 170 countries is aimed at combating poverty. These efforts reduce tensions, prevent backlash and help build future markets.

* The UN is working to solve global environmental problems, something which free markets, left to themselves, cannot do. As an international forum for building consensus and negotiating agreements, the United Nations is tackling transboundary problems like climate change, ozone depletion, toxic waste, loss of forests and species, and air and water pollution. Unless these problems are addressed, markets and economies will not be sustainable in the long term, for they are depleting the natural "capital" on which growth and human survival are based.

* The UN is looking to its business partners to be a key player in integrating the developing world into the global economy in order to raise living standards and reduce poverty. The United Nations Conference on Trade and Development (UNCTAD) will prepare a series of business investment guides to the 48 LDCs to make opportunities in those regions known and boost private capital flows. LDCs currently attract less than 1 per cent of total foreign investment.

A 1996 General Assembly resolution called on Governments to outlaw payment of bribes to public officials as part of international financial transactions and to disallow tax deductions for such payments. This paved the way for tough measures against corporate bribery of foreign officials approved by the Organisation for Economic Cooperation and Development in 1997.

* Insurance companies worried about the rising incidence and cost of disasters thought to be caused by climate change and other man-made problems, are helping the United Nations Environment Programme to create environmental awareness. Information technology companies are contributing technical assistance to an automated customs system developed by UNCTAD, which has already improved trade efficiency in developing countries by several hundred million dollars. Emergency aid to millions of people is being delivered faster and fresher by the World Food Programme, thanks to new bagging and handling technologies from the private sector. Banks with global reach are helping the United Nations Development Programme extend credit to poor people to start their own businesses. The MicroStart project so far is up and running in 15 countries. The United Nations Industrial Development Organization, acting as a broker between technology suppliers and developing countries, has brought over a billion dollars worth of investment and dean technologies to more than 80 countries in the last four years.

United States entrepreneur Ted Turner has pledged $1 billion over 10 years for UN programmes. Rotary Clubs worldwide, backed heavily by the business community, have given more than $400 million to the World Health Organization's efforts to eradicate polio. Working with the United Nations Children's Fund's "Change for Good" project, major airlines are collecting and donating extra foreign currency from passengers; since 1991, they have raised over $18 million for children.