The early successes of the G-77, a lobbying bloc of developing countries within
the United Nations, and the Non-Aligned Movement (NAM), a group of independent
nations attempting to retain sovereignty amidst cold war intrigues, culminated
in the formation of the United Nations Conference on Trade and Development
(UNCTAD) in 1964 under the helm of Raul Prebisch, its first Secretary-General.
Prebisch was an Argentine economist who wrote extensively in the 50's on the
worsening terms of trade between the industrialised countries of the North and
the non-industrialised countries of the South. Basically, his research concluded
that the South required more and more of its own raw materials and resources to
purchase ever fewer manufactured goods from the North. This 'structuralist
critique', in fact, soon became the dominant viewpoint within the UN, effecting
policy decisions in ECOSOC, the UNDP and elsewhere.
With his appointment
the 'Third World' countries saw UNCTAD as the principal vehicle within which a
more equitable restructuring of the global economy could take place. Three
related goals were immediately adopted by Prebisch; (1) the establishment of a
commodity price stabilization mechanism, (2) a scheme of preferential tariffs
for goods from Third World to First World markets and (3) a demand for greater
foreign assistance, viewed by many not as charity but rather compensation or
reparations for decades of declining commodity purchasing power. The immediate
impetus for convening the April 74' Special Session of the UN General Assembly
which passed the charter of the New International Economic Order (NIEO) and the
Charter of the Economic Rights and Duties of States (CERDS) was the summit of
NAM held in Algiers in September 73'. It was attended by an unprecedented 33
heads of state, including key delegates from OPEC. But these advances must be
seen within the context of a strong bargaining hand.
Two years before,
huge US deficit spending to finance Vietnam led to an overvalued dollar forcing
Nixon to decouple and suspend dollar-gold convertibility thereby ending the 30
year Bretton Woods arrangement. The global financial system eventually convulsed
with the stock market crash of January 73', a death by a thousand cuts affair
which only bottomed out in Dec 74'. But most of all the G-77 were emboldened by
the success of the ex-colonies within OPEC whose embargo in late 73', (a protest
over the Yom Kippur War being waged by Israel), compounded this misery. In the
two years from 1972 to 1974, the US economy tanked, slowing from 7% growth to
-2.% contraction, with inflation jumping from 3% in 1972 to 12% in 1974 and by
1975 inflation figures in the UK had hit 25%. At the meeting of UNCTAD IV in
Nairobi in 1976 the Integrated Programme for Commodities (IPC) was set up
guaranteeing protection from excessive price fluctuation for 18 specified
commodities through the creation of a common fund.
The resolute language
within the NIEO/CERDS documents certainly sprang from what must have been
pragmatic assessments of what was attainable under the prevailing climes - and
should not be viewed as a species of charitable concession granted by Western
powers in the grip of some inexplicable egalitarian fever. Eventually, it is
true, the documents became anachronistic, their long funeral cortege marshalled
by the Brandt Commission throughout the 70's with last rites applied by Reagan
at Cancun in 81' as he re-symmetricalised the cosmos under the Washington
Consensus, but at the time there must have been every expectation that an epoch
stirring breach was on the horizon.
So, the highpoint of UNCTAD's success
was the fourth trade conference in Nairobia in 1976 after which right-wing think
tanks such as the Heritage Foundation became increasingly vocal over what they
saw as a disturbing realignment of global economic power through the medium of
UN mechanisms. Disputes became more rancorous and bitterly contested and in the
end no new commodities were added to the IPC. UNCTAD was eventually wound down
and defanged through G7 lobbying and today concerns itself only with ill-funded
analysis and 'technical advice', surviving on a relatively minuscule budget of
$100 million per annum. The issues that were its bread and butter are now
debated within the - far from democratic - 'green rooms' of the World Trade
Organisation, viewed by many critics as a neoliberal 'Trojan horse' created by
corporate lobbyists and their legal teams. The principle of preferential tariffs
however still holds good today and their compatibility with WTO regulations are
a source of contention for instance between the EU and the African - Caribbean -
Pacific (ACP) countries in the current Economic Partnership Agreements. Likewise
the Monterrey Consensus has tried to get a meaningful commitment (.7% of GNP) on
overseas development aid by the OECD countries.
But the bottom line with
respect to the protection of indigenous labour and resources is that the spirit
of this compact as signalled by the 1962 UN General Aseembly 'Resolution on the
Permanent Sovereignty of Natural Resources' has not been met. Though these
principles then became customary international law and have subsequently been
imposed on developed states through arbitration awards it is sadly the case that
without the support and funding of UNCTAD the power of the IPC and other like
initiatives has withered substantially over the years along with the living
standards of millions of primary commodity producers across the developing
world. Nowadays the call for reparations and the acknowledgement of the
injustice of declining terms of trade has been replaced by the promotion of
'fairtrade'; conceived as a species of charity.
Here is a link for those
interested in how the IPC is doing today
Welcome | Common Fund
for Commodities
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