The Ministers of Latin America and the Caribbean, at the Latin American Coordination Meeting for the ninth session of the United Nations Conference on Trade and Development (UNCTAD IX), held in Caracas from 16 to 18 January 1996:

1. Reaffirm the continuing validity of UNCTAD as the principal forum of the United Nations General Assembly with a clear mandate for the integrated treatment of economic issues and the promotion of international economic relations conducive to development.

2. Reaffirm the mandate approved by the VIII Conference whereby UNCTAD is to promote a new associationfor cooperation and development, on the basis of shared solutions which take account of all the elements and complexities of economic and social development, recognizing the role of the market and private enterprise as dynamic agents of change and the existence of good government and efficient management, without excluding other approaches to development.

3. Reaffirm the urgent need to revitalize and adapt UNCTAD at both the institutional and operative levels.

4. Consider that UNCTAD IX provides an exceptional opportunity to enhance the dialogue on development and international economic cooperation, as a response to the demands of the new realities of the world economy.

5. Consider that the structural adjustment policies currently prevailing in Latin America and the Caribbean have been able to promote growth, decrease inflation and alleviate the external debt burden in many countries, with the corresponding positive effect on economic perspectives and investor confidence. These changes have been based mainly on better management of fiscal policies, privatization processes, deregulation of the economies and the increase of intraregional trade. However, in some cases this has been accompanied by important social costs.

In this respect and, in connection with the draft agenda for the Ninth Conference, they state the following:

7. The growing interdependence and increasingly greater integration of all economies require renewed and sustained efforts as regards international cooperation. In order to promote and consolidate the more active participation of developing countries in the world economy, these countries need a stable international economic climate, open markets, and greater support in terms of financial resources. Equally, they need the necessary technological dynamism to create and increase their competitiveness and strengthen their capacity for integration in the world economy.

8. The globalization of investment has become a dynamic factor in production strategies, and in world trade and the privatization programmes which have been implemented in some countries of the region represent an important support tool for institutional development and the modernization of the State. Likewise, developing countries have taken steps to stimulate increases in foreign direct investment flows and to maximize the contribution of such flows to economic development. However, the opening of national financial systems could require, in accordance with the policies of each country, a better management of capital flows at the international level.

10. Globalization brings with it a new dimension in the role played by regional and interregional cooperation as an instrument and strategy for development and participation in the world economy. Economic cooperation between developing countries is an indispensable instrument for their greater participation in the world economy and for enhancing the conditions required to face competition.

11. The situation of some low-income countries of the region and of the least developed countries is a cause of concern as it restricts their participation in and benefit from the process of globalization and liberalization and has led, in some cases, to their marginalization.

13. The process of globalization has increased the interdependence of national economies and highlighted the close interlinkages between economic activities and policies related to trade, industrial and technological development, investment, money and finance. Dealing with the challenges posed by globalization requires that there be greater coherence and uniformity of policies in these areas at the national and international levels.

14. For their part, the industrialized countries are responsible for ensuring a stable and predictable international economic environment. It is important, in this context, and in terms of co-responsibility, that they adopt sound and transparent structural and macroeconomic national policies in order to promote growth and help to avoid foreign exchange fluctuations and instability in financial markets. Moreover, it is necessary that, when coordinating their macroeconomic policies, they take account of the interests and concerns of the developing countries.

15. It is necessary to reaffirm the functions of the International Monetary Fund (IMF) and other international financial institutions in ensuring that macroeconomic and financial management is sustainable and global. It is also necessary to strengthen the IMF's role in evaluating the consequences for developing countries of the macroeconomic policies of the major industrialized countries.

16. In considering policies and strategies for the future, it is important to reaffirm the need to respect the letter and spirit of the Uruguay Round commitments. To support the liberalization efforts made by the Latin American and Caribbean countries, the opening of international markets should be consolidated and deepened. In this respect, it is necessary to avoid the emergence of risks in the multilateral trade system: such as that policy harmonization be defined by criteria that ignore asymmetries; that some of the "new trade issues" be transformed into protection mechanisms; that the instruments of multilateral trade be expanded in a virtually unlimited way.

17. Urgent international action is required to secure reasonable stability in exchange and interest rates and to put an end to the uncertainty and volatility of capital flows, which mainly affect developing countries.

18. UNCTAD should continue to analyze the issue of external debt which affects many of the developing countries, with a view to formulating integrated proposals for durable solutions to the debt and debt service problems, in order to allow these countries to resume their economic growth.

19. At the same time, the modernization, reform and development processes of the countries in the region require the financial support of the international community. Within this context, it is very important that the developed countries reverse the current trend and comply with their commitments on official development aid (ODA).

22. Developed countries should avoid protectionism and unilateralism. The competitive advantages of the developing countries and the benefits resulting from the Uruguay Round should not be undermined by new measures of disguised protectionism, such as labour or environmental standards, among others, imposed unilaterally. In this context, it is unacceptable to request developing countries to modify their policies, including their process and production methods, in order to comply with criteria that are not suited to their state of development. An in-depth analysis should be made of these measures to determine their costs for developing countries, their impact on international trade, and the effectiveness of the objectives they pursue. Consensus on these issues should be sought in the appropriate forums.

23. Developed countries need to comply fully with the commitments assumed at the Uruguay Round in respect of trade liberalization. Implementation should be accelerated, particularly relating to textiles, apparel, and agricultural products. This is necessary in order for the developing countries to reap benefits from the increase in trade opportunities. Moreover, trade policies and practices of developed countries should not hamper the exports of developing countries through measures adopted outside the framework of the World Trade Organization (WTO) agreements. In this respect, the particular vulnerability of developing countries with small economies needs to be taken into account.

24. Considering the margin of flexibility allowed by the Agreement on Agriculture in applying the commitments made concerning market access, export subsidies and domestic support for agriculture, there is concern that the mechanisms which the major developed countries use to meet their commitments may limit the advantage that can be taken of new and genuine market opportunities. In this context, special attention should be given to the situation of the developing countries that are net food importers, in accordance with the Ministerial Decision of Marrakesh. If any kind of protection is maintained, this will not only generate distortions in international trade in agricultural products, thus reducing the trading opportunities of several countries, but will also not be justifiable from the standpoint of sustainable development. It is important to continue the reform process of international trade in agricultural products on the basis of the negotiations to be initiated before 1999 in the WTO.

25. UNCTAD should continue its valuable work on services, and should focus on three priorities: promotion of transparency, undertaking of additional studies, and technical assistance. This work should be aimed, inter alia, at strengthening the negotiating capacity of developing countries and increasing their participation in international trade in services. At the same time, it is necessary to ensure full compliance with the General Agreement on Trade in Services (GATS) of the WTO, particularly with respect to issues of interest to developing countries, and to achieve a balanced outcome on the issues pending negotiation.

26. The trade liberalization process should continue in the framework of the World Trade Organization, bearing in mind the light of the interests of the developing countries. It is essential for all countries to respect and fulfil the totality of the undertakings and decisions of the Uruguay Round. Countries should refrain from engaging in unilateral and extraterritorial measures and should withdraw them if they are in place. The WTO dispute settlement mechanism is a key element for the credibility of the multilateral trade system. Consensus must be the constant basis for any trade policy initiatives. In this respect, UNCTAD's role should be strengthened to support the negotiating capacity of the developing countries, so that they can participate in an active and effective way in trade negotiations at the multilateral, regional and subregional levels, in coordination with the institutions that serve as a forum for these negotiations.

27. The developed countries should adopt structural adjustment policies to facilitate trade liberalization and avoid protectionism. To this end, the policies they adopt should promote reconversion of production, take account of the new supply capacity that is being created in the developing countries, and refrain from protecting their production in agriculture, industry and the services sector against foreign competition caused by the changes produced in the pattern of comparative advantage.

28. UNCTAD should continue its work in identifying and evaluating new trade opportunities that will arise from the implementation of agreements on trade in goods and services, so as to help developing countries take full advantage of those opportunities. To this end, the Latin American and Caribbean Group (GRULAC) countries favour the continuation of the LATINTRADE project, as the region's instrument for identifying and disseminating new opportunities deriving from current and future negotiations.

29. It is necessary to reaffirm the central objectives of international commodity policy in order to achieve stable conditions in international trade at price levels that are remunerative to producers and equitable for consumers; to improve productivity, market access and increase commodity export earnings, in particular halting and reversing protectionism and removing distortions to trade; and enhance the ability of developing countries to reduce the negative effects of commodity dependency through, for example, the use of modern instruments of marketing and risk management, and to diversify their production and export capacity.

30. UNCTAD IX should agree on concrete measures to further the achievement of the abovementioned objectives, including the promotion of horizontal and vertical diversification of commodities. In this connection, due account should be taken of the needs of those countries which are making efforts to eradicate illicit narcotics crops.

31. UNCTAD should pursue its useful work in the area of trade efficiency because it is of great interest to the developing countries. In future, it will be necessary for UNCTAD to establish a work programme to follow up the Columbus Symposium, especially in the areas of telecommunications and transport, as well as the training of human resources, and it should continue the work of extending and strengthening the network of trade points.

32. In light of the emergence of new issues linked to international trade following the conclusion of the Uruguay Round, UNCTAD should further develop its analytical work, for example, in the areas of Trade and Investment; Trade, Competition Policies and Legislation; Trade, Environment and Development, for the purpose of strengthening the negotiating capacity of developing countries and expanding the technical cooperation provided to them.

34. In connection with sustainable development, the treatment of environmental issues needs to be approached in the framework of multilateral environmental agreements and based on the principles of need, effectiveness, non-discrimination, transparency, the least possible restriction on trade, and shared but differentiated responsibility. In this context, the main concerns of the developing countries as regards the environment relate to, inter alia, poverty alleviation, employment generated by micro, small and medium-sized enterprises, the transfer of clean technologies, the conservation of natural resources, and maintaining the competitiveness of export supply.

35. Unilateral actions that restrict trade, imposed by the developed countries to address environmental problems outside their borders, should be eliminated. In this connection, measures aimed at solving cross-border or global environmental problems should be based on multilateral environmental agreements with broad geographical representation. It should be taken into consideration that the developing countries need technical and financial assistance to improve their environmental standards.

36. UNCTAD should continue its work with respect to trade and environment at the highest level, attempting to generate an international consensus on the principles and modalities of the interaction between trade, environment and development. To this end, it should provide assistance to developing countries to negotiate more balanced agreements in this area, taking into account the work of other multilateral fora, particularly the WTO.

37. The challenges of globalization and liberalization require the developing countries to undertake major domestic reforms to achieve progress in terms of technology and productivity, that will enable them to compete in markets and integrate their productive sectors into a mutually sustainable whole with a broad social base.

38. Governments of developing countries have the responsibility to provide an enabling environment for their enterprise development, and to strengthen the competiveness of the enterprise sector. In this regard, they should pursue pro-active sectoral policies that will help to improve enterprise competitiveness through cross-sectoral actions, especially in the fields of transfer and modernization of technology, training of human resources, company management and financing.

39. Small- and medium-sized enterprises (SMEs) of developing countries can play an important role in creating dynamic services and productive sectors, and in the increase of exports, sales and added-value in the non-farming sectors. Being labour intensive, SMEs generate employment, thus reducing poverty and enhancing the participation of women in productive activities. They also help to provide a vehicle for the economic potential of the informal sector of the economy.

40. With a view to promoting the access by SMEs to official financing sources, governments should urge the financial institutions to extend loans on adequate terms and conditions. The establishment of mechanisms should be encouraged that allow small and medium-sized companies to obtain financing through the capital market and from private non-banking financial institutions, including the creation of efficient financial intermediaries and the provision of suitable guarantee schemes.

41. UNCTAD should continue to serve as a forum for intergovernmental discussions, with the participation of representatives from the private sector, concerning issues related to privatization, enterprise development and international flows of investment. In particular, UNCTAD should promote the international dialogue among development actors for the purpose of assessing the challenges and opportunities for enterprise development arising from the new and emerging economic conditions, including the post-Uruguay Round environment. This policy dialogue within UNCTAD should also be conducted with a view to identifying and disseminating "best practices" and lessons learned concerning the effects of government policies and market mechanisms on the development of enterprises, particularly SMEs, and their links to trade, investment, technology and finance. Likewise, technical cooperation activities undertaken by UNCTAD in the field of enterprise development should be continued and strengthened.

42. The Ministers reaffirm the validity and full effectiveness of UNCTAD's original mandate, established in resolution 1995 (XIX), complemented by the modifications agreed during UNCTAD VIII in Cartagena de Indias, as well as its universal and democratic character which mark it as the central, priority forum in the United Nations System for the integrated treatment of development and inter related economic issues and for strengthening international cooperation for development. This position of Latin America and the Caribbean has been confirmed at such important gathering as the Nineteenth Annual Meeting of the Foreign Ministers of the Group of 77 in September 1995, the Eleventh Summit of the Non-aligned Movement in October 1995, and the Fifth Summit of the Group of 15 in November 1995.

43. In view of the new world realities and challenges, the Ministers express their firm conviction that there is a pressing need to reform and revitalize UNCTAD, in both its operational and institutional aspects, so that it may continue to better serve the interests of the developing countries. UNCTAD should play a decisive role in the promotion of sustainable development and the solving of social problems throughout the world, taking into account the results of the United Nations Conference on Environment and Development, and the World Summit on Social Development. It should also act as a generator of ideas and solutions in the framework of the emerging new order of international relations. Likewise, it should continue and broaden its outstanding work in such areas as trade, commodities, the interrelationship between trade policies and financial and monetary questions, investment, restrictive business practices, trade and the environment, trade efficiency, the role of science and technology in development, and economic cooperation among developing countries.

44. The Ministers consider that a central element in the revitalization of UNCTAD is the strengthening of its basic functions, which include: i) continuous global analysis of the evolution, trends and new realities of the world economy, with an integrated approach that promotes international cooperation conducive to development; ii) intergovernmental deliberations, the consensus-building and negotiation; and iii) implementation and follow-up of technical cooperation.

45. The analysis and evaluation, from a development perspective, of the new realities, policies and problems of the world economy, as well as the formulation of strategies that can be translated into concrete actions to be adopted both at the national and international levels, should be an essential element in UNCTAD's activities. Special attention should be devoted to development problems which have not yet been solved, and to the identification and treatment of the decisive issues in trade and development which are emerging in a rapidly evolving world, including a possible early warning system. The analytical function should also include a systematic study of the national and international policies that influence development, and should take into account policies applied or agreed by other institutions, in order to evaluate their consequences for the developing countries.

46. Consensus building and negotiation are very important functions of UNCTAD and flow from the identification of issues and the analytical work carried out by the Secretariat. This exercise should work towards a wide-ranging convergence of opinions which could be reflected in recommendations addressed to the Member States; decisions and resolutions which have to be applied by the Organization and the Member States; and in binding international agreements. It is necessary to establish mechanisms to follow up the commitments agreed both within the competence of UNCTAD and in other fora on related matters. It is necessary to pursue and improve the process begun in Cartagena of adapting UNCTAD's modus operandi and the methods of work and modalities for negotiations.

47. Technical cooperation should be strengthened and integrated in all relevant areas of UNCTAD's activity, bearing in mind the need to maintain effective coordination with other institutions inside and outside the United Nations System which deal with the same themes, including the private sector. It is necessary to strengthen the link between the Secretariat's operational capacity for technical assistance and its research and analysis functions. Likewise, technical cooperation should be aimed at strengthening the capacity of countries to administer their own development process and to strengthen their participation in international deliberations and negotiations. A strengthened and expanded technical cooperation programme should give priority attention to South-South cooperation and to the training of national and regional officials. To this end, UNCTAD should allocate a substantial part of its budget to these activities and the member countries should make increased extra-budgetary financial contributions.

48. The work done by UNCTAD and the WTO is complementary and should be based on constructive and effective cooperation. In this context, UNCTAD should continue its important role in the analysis of international trade trends and their relation to development, identify the possible areas of future trade negotiations, and promote consensus-building, as well as support the developing countries in these negotiations. For its part, the WTO is in charge of the negotiation, implementation and follow up of multilateral trade agreements and regulations.

49. During the 18th special session of the Trade and Development Board, a series of agreements were reached concerning guidelines and recommendations addressed to UNCTAD IX regarding the functioning of UNCTAD's intergovernmental machinery with the aim of contributing to the revitalization of the institution making it possible to establish clear priorities. In this respect, the Ministers of Latin America and the Caribbean consider that to ensure its efficiency UNCTAD's intergovernmental inter-divisional machinery should have three mutually linked hierarchical levels:

50. The Trade and Development Board, as UNCTAD's permanent body, will implement the basic functions set out in this Declaration, establishing general policy guidelines and orientations for the functioning of the Institution. In carrying out its functions, the Board will examine the issue of interdependence and issues of the global economy matters,as well as one or two additional substantive issues. To this end, the Board will meet annually in a single ten-day session, which would also include a two-day high-level segment.

51. The Sectoral Commissions will propose policies based on the inputs generated by meetings of experts. Bearing in mind UNCTAD's broad thematic areas, Commissions will be established, in principle, on: Trade, Investment and Services. As regards science and technology, it is important to define the programmatic content, and UNCTAD's institutional relations with the Commission on Science and Technology for Development.

52. The Sectoral Commissions will convene meetings of experts to strengthen in a permanent way the technical base of their work in, among other substantive themes: commodities, preferences and the environment and its relation to trade and development, insurance, maritime transport, the promotion of investment, entrepreneurial development, trade efficiency, and competition policies and legislation.

53. The importance of issues relating to poverty alleviation, economic cooperation among developing countries, and the problems of the least developed countries require that they be considered in a cross-sectoral manner.

54. The institutional reform of UNCTAD should include the provision of financing to enable the participation of experts from developing countries in technical meetings. In this respect, it is necessary to more forward in the definition of criteria and modalities which would make it possible to implement the decisions adopted on this matter recently at the XVIII Special Session of the Trade and Development Board.

The Ministers acknowledged with appreciation the work of SELA in preparing for this Consultation and Coordination Meeting, congratulating the Permanent Secretariat on the document that served as the basis for the discussions and thanked SELA's officials for their hospitality and support.

The Ministers welcomed the generous offer made by the Government of South Africa to host the IX Session of the United Nations Conference on Trade and Development.

The Ministers of Latin America and the Caribbean:

1. Affirm the importance of economic cooperation among developing countries (ECDC) in all its forms, modalities and geographic scope as a positive element in the strategy of growth and development.

2. Note that an "open and flexible" ECDC provides an essential instrument for developing countries to pool their human, technological and financial resources to achieve a viable and efficient competitive capacity.

3. Welcome with satisfaction the recent growth in cooperation among developing countries, and with developed countries, at the subregional, regional and interregional levels.

4. Reaffirm the importance of financial and monetary cooperation among the developing countries and with the developed countries. In this context, they reiterate their support for the effective use, as appropriate, of the clearing and payments arrangements of the developing countries.

5. Note with satisfaction the progress achieved in the Second Round of the Global System of Trade Preferences among developing countries (GSTP). They emphasize the need to further vitalize the GSTP and expand its coverage in the light of the new reduction of trade barriers and tariffs brought about by the conclusion of the Uruguay Round.

6. In this context, the Ministers reaffirm the importance of the Ministerial Meeting which will complete the Second Round of Negotiations of the Global System of Trade Preferences among developing countries, to be held in Havana, Cuba, in 1996.

7. Consider that in UNCTAD the theme of ECDC should be dealt with horizontally, in view of its interrelations with all aspects of trade and development.

8. Request their delegations in Geneva to carry out consultations with the other Members of the Group of 77 with a view to adopting a joint position on ECDC, which would strengthen and support the development effort.

4. Reaffirm the importance of financial and monetary cooperation among the developing countries and with the developed countries. In this context, they reiterate their support for the effective use, as appropriate, of the clearing and payments arrangements of the developing countries.

5. Note with satisfaction the progress achieved in the Second Round of the Global System of Trade Preferences among developing countries (GSTP). They emphasize the need to further vitalize the GSTP and expand its coverage in the light of the new reduction of trade barriers and tariffs brought about by the conclusion of the Uruguay Round.

6. In this context, the Ministers reaffirm the importance of the Ministerial Meeting which will complete the Second Round of Negotiations of the Global System of Trade Preferences among developing countries, to be held in Havana, Cuba, in 1996.

7. Consider that in UNCTAD the theme of ECDC should be dealt with horizontally, in view of its interrelations with all aspects of trade and development.

8. Request their delegations in Geneva to carry out consultations with the other Members of the Group of 77 with a view to adopting a joint position on ECDC, which would strengthen and support the development effort.