Explanation of Position on the Financing for Development Outcome Document

Stefanie Amadeo
U.S. Deputy Representative to ECOSOC
U.S. Mission to the United Nations
New York City
May 23, 2017

AS DELIVERED

Good afternoon. I would like to start by thanking the co-facilitators, Ambassador Pecsteen de Buytswerve and Ambassador Matjila, for their strong leadership throughout this process. They ably guided this negotiation over the last few weeks, helping to build consensus on a range of issues. We would also like to thank all of our colleagues, who put in countless hours, for their efforts to bring us to where we are today. Our thanks also to other Member States for the depth, substance, and soundness of our discussion throughout the negotiating process.

We take this opportunity to make important points of clarification on the outcome document for the Forum on Financing for Development follow-up, and underscore that this non-binding document does not create rights or obligations under international law.

First, the United States regrets the lack of balance in this document. For example, we would have liked to have seen more emphasis on the key tenet of Financing for Development that "every country has primary responsibility for its own economic and social development, and that the role of national policies and development strategies cannot be overemphasized." Exclusion of this core principle disrupts the balance of priorities so carefully negotiated in the Addis Ababa Action Agenda. Reaffirming this principle recalls for all parties their respective commitments in Financing for Development and the means of implementation in the 2030 Agenda.

Second, the United States is in the process of reviewing many of its policies, including its stance on climate change, climate finance, and the Paris Agreement. While such review is underway, the United States reserves its position on these issues.

Third, the United States puts on record its deep concern with language in this document pertaining to trade, investment, and intellectual property. The negotiations that led to this outcome document, and some of the language that it now contains, demonstrate once again how disconnected the UN is on these issues. Any effort in the UN to speak to ongoing or future work in the WTO, to reinterpret existing WTO rules and agreements, or to undermine the WTO’s independent mandate and processes is unacceptable to the United States. Such efforts have no standing and will only diminish our confidence in the UN.

In this vein, the United States disassociates from the sentence in Paragraph 20 that calls on all regional and global organizations and institutions to consider the SDGs as they develop their strategies, policies, and practices. This language has no standing in future negotiations. UN members stated in Paragraph 58 of the 2030 Agenda that “we respect the independent mandates” of other fora, and that the 2030 Agenda is without prejudice to the other processes and the decisions taken therein. The United States rejects any interpretation of Paragraph 20 that would undermine UN members’ clear agreement on this principle.

During this negotiation, there has been extended discussion of “free and fair trade”. Free and fair trade is a key engine for growth and job creation. We must acknowledge that subsidies and other support by governments and related entities can distort trade and contribute to excess capacity, adversely affecting workers, economies, and sustainable development in all countries. External market actions that do not comply with the rules-based international trading system and with open market principles must be addressed through corrective policies that help alleviate those trade distortions that are affecting firms and sectors across the globe. The United States also rejects any attempt to interpret the language in Paragraph 9 to promote state ownership in the economy, or to suggest that governments may deprive private interests of wealth or resources without compensation in accordance with international law or otherwise fail to observe a State’s legal obligations.

In addition, we strongly disagree with language in Paragraph 11 that suggests some foreign direct investment—if it is aligned with the SDGs or is considered of a “long-term” nature—is of superior quality to other foreign direct investment. All forms of foreign direct investment can contribute to growth and development. This language raises serious questions about the UN’s credibility on this issue. Regarding the discussion of micro, small, and medium-sized enterprises (MSMEs), we remain convinced that the international trading system offers opportunities for MSMEs to potentially reach millions of new customers beyond their domestic markets, particularly through e-commerce platforms.

Regarding technology, the United States does not support the reference to technology transfer in Paragraph 21. The United States also disassociates from the final sentence of Paragraph 22, and notes that this language has no standing in future negotiations.

Fourth, the United States believes that the multilateral development banks should target their scarce concessional financing to the poorest and least creditworthy countries, and countries' access to concessional financing should decrease as their incomes increase. Rather than try to preserve access to concessional finance, the MDBs' implementation of their graduation policies should aim to smooth the transition away from concessional assistance and consider how to help graduating countries avoid a large drop in overall development finance. While we support efforts by the UN and international financial institutions to develop additional non-income measures of sustainable development, this should not imply those measures' application to IFIs' eligibility criteria, which remain set by the appropriate governance bodies of each institution.

Fifth, we appreciate this Forum's commitment to combatting corruption but reiterate the importance of addressing corruption-related matters, particularly complex technical issues such as asset recovery, through technical subsidiary bodies of the Conference of States Parties to the UN Convention against Corruption in Vienna, where the experts meet regularly.

Finally, the United States wishes to express its concern with the assignments given to the IATF, in light of our strong disagreement with elements of its 2017 report. To address these concerns, we urge the IATF to consult early and often with Member States as they prepare the 2018 report.

With these clarifications, we will join consensus on the adoption of the outcome document for the ECOSOC Forum on Financing for Development follow up. Thank you.

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