Delegates tasked with hammering out an outcome document for a UN conference on development finance reviewed a revised draft during an informal session held last week in New York, completing a paragraph by paragraph review of the proposed text.

On Friday the co-facilitators of the talks ­– George Talbot, Permanent Representative of Guyana to the UN and Geir Pedersen, Permanent Representative of Norway to the UN –­ said that they would shortly release a compilation text containing proposed modifications made throughout the week.

The co-facilitators also confirmed that while no further revised outcome document draft would be released at this stage, they would develop proposals on how to bridge differences over certain paragraphs, where this seemed appropriate to do so. 

Additional informal sessions have been scheduled for the end of May and early June, with a view to advancing work on the draft outcome before a formal negotiation session in mid-June.

The Third Conference on Financing for Development (FfD3) is due to be held in mid-July in Addis Ababa, Ethiopia. The co-facilitators had released the revised outcome draft in early May based on views and comments on a first iteration of the document – a zero draft – aired during talks held last month.

On that occasion a joint session held with the UN talks geared towards crafting a post-2015 development agenda saw delegates diverge on how best to stitch together the outcomes of both processes.

World leaders are due to meet in late September in New York to adopt a post-2015 development agenda, including a set of Sustainable Development Goals (SDGs), designed to replace the current Millennium Development Goals (MDGs). Delegates from the post-2015 track are meeting this week at UN headquarters to discuss commitments on follow-up and review for the eventual agenda.

Revised outcome draft

The revised outcome draft as released on 7 May is organised into three sections: an introductory narrative, an action agenda, and a now separate section on data, monitoring, and follow-up.

A trade section is included in the seven areas targeted under the action agenda. Other references to trade-related policy are also scattered throughout some of the other areas. A number of these areas complement trade references found in a list of 17 proposed SDGs and 169 targets – put forward by a UN working group last July – but in some instances also go beyond these.

The updated trade section retains references found in the zero draft to the importance of a universal, rules-based, and non-discriminatory multilateral trading system; a commitment to conclude the WTO’s Doha Round of trade negotiations; and a call to implement a package of decisions reached at the global trade body’s last ministerial held December 2013 in Bali, Indonesia.

Language has also been kept around implementing duty-free and quota-free (DFQF) market access for products originating from least developed countries (LDCs) in accordance with past WTO decisions, ensuring simple and transparent rules of origin (RoO) applicable to imports from LDCs, the principle of special and differential treatment (S&D) for developing countries, and raising poor countries’ participation in world trade. A specific reference to the Bali decision on operationalising a previously-agreed waiver granting preferential treatment to LDC services and services supplier has been added.

The revised document also firmly acknowledges the links between trade policy and domestic policy in promoting sustainable development. “With appropriate supporting policies, infrastructure, and an educated workforce, trade can help promote employment, decent work and women’s empowerment, reduce inequality, and contribute to the realisation of the SDGs,” the current text runs.

Reference is also made to integrating sustainable development into trade policy at all levels, including sustainable development provisions in both trade and investment agreements, as well as pledging sustainability impact assessments for trade agreements.

A specific mention of conducting a proper review of investor-state dispute settlement (ISDS) clauses has been dropped, however, replaced by language around strengthening safeguards in investment treaties.

The revised draft now includes several references to the importance of trade to land-locked developing countries (LLDCs), small island developing states (SIDS), and women – groups for whom participation in trade could be particularly important, experts suggest.

The document commits to building coherence between bilateral and regional trade and investment agreements and the multilateral system, adding to the recognition in the earlier draft of the significant potential of regional economic integration to promote growth and sustainable development.

Language in earlier outlines of the FfD3 outcome document released in January, which suggested that regional trade agreements (RTAs) may not always foster positive economic, social, and environmental aims, had received pushback from some countries.

New environment, trade language

The trade section in the revised draft makes specific and separate references to the reform of both agricultural and fisheries subsidies. The zero draft had bundled the latter in along with a broader call for WTO members to correct distortions in both fisheries and agriculture markets.

Language recognising the challenge posed by illegal wildlife trade, including fishing and logging, as well as illegal mining has been inserted into the trade section. The draft would urge support for enhanced global efforts to tackle the poaching and trafficking of protected species, dumping of hazardous waste, and illegal trade in minerals. This is placed within the context of increasing the capacity of local communities to pursue sustainable livelihood opportunities.

Within the same paragraph, the revised draft adds text on boosting the monitoring, control, and surveillance of fishing vessels in order to effectively prevent, deter, and eliminate illegal, unreported, and unregulated (IUU) fishing. 

The draft also now welcomes the plurilateral talks between a group of 17 WTO members to liberalise trade in environmental goods. The FfD3 text also refers to environmental services in this context, although reports on the Environmental Goods Agreement (EGA) talks suggest participants diverge on where best to tackle these.

The revised draft keeps a reference to supporting WTO members in taking advantage of the flexibilities in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to further the public interest in sectors critical for sustainable development, including public health. This broader language appears to also cover responses to climate change, the specific references to which in the TRIPS context have been scrubbed.

Reactions to revised draft

The trade section was relatively well-received at the FfD3 session last week, sources say, although some textual suggestions were made and discussion prompted on certain key topics.

On global value chains, the EU proposed to insert language on sound, enabled domestic environments providing the key to integration in such chains. Elsewhere, the G77/China called for deleting text on implementing sound domestic policies and reforms conducive to realising the potential of trade for sustainable development, perhaps suggesting a divergence on how to go about promoting participation in GVCs. 

The EU also suggested adding a call for upper-middle income countries, to provide DFQF access for LDCs’ products.

References to TRIPS flexibilities were panned by both Switzerland and Japan while the G77/China proposed an additional paragraph in this area.

The EU and the US proposed shifting the focus of the reference to the WTO’s Trade Facilitation Agreement from LLDCs to LDCs, while the G77/China are said to have supported keeping the LLDC text.

Japan and the EU proposed deleting references to numerical targets for the WTO’s Aid for Trade initiative, and Japan also proposed deleting references to increasing this type of support and the Enhanced Integrated Framework for Trade-Related Technical Assistance to the LDCs, suggesting that this would be decided within the context of the WTO.

Last week’s consultations also saw some discussion on the relationship between climate and development, with developed and developing countries disagreeing on whether or not to include language separating climate finance from Official Development Assistance (ODA).

In the context of the domestic public resources section of the document, some delegates also commented on overlaps between the draft and work ongoing under the UN Framework Convention on Climate Change (UNFCCC). Saudi Arabia reportedly suggested that carbon pricing was being examined in the context of the UN climate talks.

The revised zero draft includes several paragraphs in the international public finance section on climate change and climate finance, recognising the UNFCCC as the primary intergovernmental forum for tackling this issue, reaffirming the importance of meeting existing commitments in this area, and welcoming pledges made to the Green Climate Fund – an international finance body geared towards helping developing countries mainstream green growth into their development strategies.