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The influence of the international secretariat: UNCTAD and generalized tariff preferences

Published online by Cambridge University Press:  22 May 2009

Anindya K. Bhattacharya
Anindya K. Bhattacharya
Affiliation:
Anindya K. Bhattacharya is an Assistant Professor of Business Administration at Adelphi University in Garden City, New York. The author is grateful to Donald J. Puchala, Robert W. Cox and Richard N. Gardner for their helpful comments on earlier drafts of the study. The major part of this research was carried out by a grant from the University Consortium for World Order Studies.
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Extract

The article is an empirical study of the political processes leading to the agreement on the Generalized System of Preferences (GSP) that was reached in October 1970 at the United Nations Conference on Trade and Development (UNCTAD). Section I of the article sets out the triangular interests that had to reach agreement among developed countries, among developing countries, and between developed and developing countries. Section II poses the problem of the article: How did the UNCTAD secretariat contribute to the political process that resolved the three-dimensional disagreements, if only on a partial basis? The argument of the article is that sustained institutionalized pressure exerted through the UNCTAD secretariat did make a difference in influencing the policy outcomes on GSP. Certain results were achieved through UNCTAD organizational processes–secretariat ideology, Prebisch's leadership, and pragmatic group bargaining–that could not have been achieved through other means.

Type
Articles
Information
International Organization , Volume 30 , Issue 1 , Winter 1976 , pp. 75 - 90
Copyright
Copyright © The IO Foundation 1976

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References

1 On this point see Johnson, Harry G., Economic Policies Toward Less Developed Countries (New York: Piaeger, 1967), pp. 167–206.Google Scholar

2 Decision of the Trade and Development Board at its Fourth Special Session (75/S/IV), UN Document TD/B/332, p. 1.

3 UN Document TD/B/329/Rev. 1, p. 9.

4 The question of the impact or implementation of the GSP decision is a well-researched subject. On the limitations of various national GSP schemes, see Cooper, Richard N., The European Community's System of Generalized Tariff Preferences: A critique. Yale University Economic Growth Center Paper No. 185 (1973)Google Scholar; UNCTAD, Operation and Effects of Generalized Preferences Granted by Japan. UN Document TD/B/C.5/6; and United States Tariff Commission, Probable Effects of Tariff Preferences for Developing Countries, Vol. 1, Staff Research Studies No. 2 (Washington: US Tariff Commission, 1972)Google Scholar. For certain tentative conclusions on the general reasons behind the problems faced by UNCTAD in the implementation field, see Gosovic, Branislav, UNCTAD: Conflict and Compromise (Leiden: Sijthoff, 1972), pp. 219–25Google Scholar. For an account of the role of US Congress and the delay in voting GSP into US trade law, see C. Fred Bergsten, “Tariff Preferences and the Congress,” unpublished paper, The Brokings Institution, 1972.

5 United States Tariff Commission, Tariff Preferences for Developing Countries: Existing and Proposed Arrangements, Staff Research Studies, Reeves, George C. (Washington: US Tariff Commission, 1971), p. 27Google Scholar. For a description of GATT differences of opinion on preferences, see GATT document L/2073, p. 2.

6 The positions on preferences that developed at UNCTAD I were as follows: (1) the LDC proposal on general preferences with special measures for LDDCs; (2) the British proposal, supported by West Germany, Holland and Denmark, that favored general preferences, subject to burden-sharing and abolition of selective preferences; (3) the “Brasseur Plan” put forward by Belgium, France, and Italy, that advocated a selective scheme on a worldwide basis; (4) the Australian plan for unilateral general preferences based on “competitive need” and quotas; and (5) the American position, supported by Japan, Switzerland, Austria, and Norway, that opposed preferences and advocated instead nondiscriminatory trade liberalization measures. See Patterson, Gardner, Discrimination in International Trade, The Policy Issues, 1945–1965 (Princeton N. J.: Princeton University Press, 1966), Chapter 7Google Scholar; and Weintraub, Sidney, Trade Preferences for Less-Developed Countries (New York: Praeger, 1967), pp. 99–101.Google Scholar

7 UNCTAD Recommendation A.III.5 in Proceedings of the United Nations Conference on Trade and Development. First Session, Geneva, 1964, United Nations Publication Sales No. 64.II.B.II (hereafter cited as UNCTAD 1 Proceedings), Vol. I, p. 39.Google Scholar

8 The United States voted against General Principle 8 dealing with preferences, although the resolution had already been toned down to take into account its opposition. Also, largely due to American opposition, no action could be taken on Special Principle 3 relating to preferences. See Johnson, pp. 251–4.

9 Patterson, pp. 350–6; Weintraub, p. vii, pp. 132–3; and Johnson, pp. 165–70.

10 “Report on the Outcome of the Third Session of UNCTAD,” European Parliament Working Documents, Document 83/72 (3 July 1972), p. 32.

11 Weintraub, pp. 148–50; and Gosovic, p. 30.

12 UN Documents TD/B/429/Add.2, p. 33; and TD/B/C.5/5, p. 21.

13 The concern derived from the varying interests of donor countries in total imports, imports from LDCs, and the general importance of manufactures in their respective national economies. See U.S. Tariff Commission, 1971, pp. 54–5; and “Report of the OECD Group of Four” reprinted as UN Document TD/56 in Proceedings of the United Nations Conference on Trade and Development, Second Session, New Delhi, 1968, United Nations Publication Sales No. E.68.II.D.16 (hereafter cited as UNCTAD II Proceedings), Vol. III, pp. 80–1.Google Scholar

14 The EEC and Generalized Preferences in Favor of Semi-Finished and Manufactured Products Imported from Developing Countries, EEC Note d'Information (Brussels, 06 1971), p.14Google Scholar; and Malmgren, Harold B., Trade and Development, Overseas Development Council monograph, No. 4 (1971), pp. 44–6.Google Scholar

15 Gardner, Richard N., Sterling-Dollar Diplomacy: Anglo-American Collaboration in the Reconstruction of Multilateral Trade, (New York: McGraw-Hill, 1969), pp. 107 and 152.Google Scholar

16 Weintraub, pp. 17–9 and 34–7; Address by Samuels, Nathaniel in Department of State Bulletin, Vol. 62, No. 1618 (06 29, 1970), p. 812Google Scholar; and Statement by Eberle, William D. in Department of State Bulletin, Vol. 67, No. 1746 (12 11, 1972), p. 677.Google Scholar

17 The revisionist ideology of UN-ECLA-UNCTAD, sometimes labelled the Myrdal-Prebisch-Singer ideology of the “Peripheral Economy,” is well known. Also well known are the changes that Prebisch later introduced in this ideology–changes characterized by the shift from import substitution to export promotion, the promulgation of the concept of the “trade gap,” and the emphasis on a set of “convergent” measures geared to strengthening the “political will” of member states to carry on the tasks of development. See Friedberg, A.S., The United Nations Conference on Trade and Development of 1964 (Rotterdam: Rotterdam University Press, 1968), pp. 34–5Google Scholar; and Meier, Gerald M., Leading Issues in Economic Development: Studies in International Poverty (Oxford University Press, 1970), pp. 509–20.Google Scholar

18 Prebisch calculated that import substitution would account for only 3 percent of total Latin American import demand. See Prebisch, Raúl, Change and Development: Latin America's Great Tasks (New York: Praeger, 1971), p. 92.Google Scholar

19 Gathered from interviews at the Indian Mission in Geneva.

20 Friedberg, p. 77.

21 UN Document TD/12/Supp.1 in UNCTAD II Proceedings, Vol. III, pp. 10–11.

22 Gosovic, p. 331.

23 Prebisch's speech as quoted in Weintraub, p. 150.

24 See Prebisch's statement at the 122nd Plenary Meeting of the Trade and Development Board, UN Document TD/B/146, pp. 23–6, and his testimony given in A Foreign Economic Policy for the 1970's, Hearings before the Sub-committee on Foreign Economic Policy of the Joint Economic Committee, 91st Congress, 2nd Session (Washington: Government Printing Office, 1970), pp. 664–5.

25 Gosovic, p. 274.

26 Weintraub, pp. 23, 27 and 168.

27 See Prebisch's statement at the 25th Plenary Meeting of the Trade and Development Board, UN Document TD/B/23, pp. 8–9.

28 Gathered from interview with a senior Latin American official at UN secretariat in New York.

29 It has also been suggested that Prebisch “accused” Lleras in regional meetings of the Latin American group of deliberately stalling the GSP agreement in order to obtain bilateral advantages in the American market and “threatened” to withdraw UNCTAD's institutional support on coffee matters. Interview with senior Latin American UN official (see footnote 28).

30 Prebisch, , Change and Development, p. 175.Google Scholar

31 The change in the American position was signalled when President Johnson, in a speech made in April 1967 in Punta del Este, Uruguay, announced the willingness of the Executive Branch to “explore the possibility of temporary preferential tariff advantages for all developing countries in the markets of all the industrialized countries.” See Department of State Bulletin, Vol. LVI, No. 1454 (8 05 1967), p. 709.Google Scholar

32 See the speech by Mr. Solomon reprinted in Challenges and Choices in U.S. Trade Policy, Department of State Publication 8002, General Foreign Policy Series 209 (January 1966), pp. 6–7.

33 George Ball's switch in position from total opposition to any kind of preferences to advocacy of a regional preferential scheme with Latin America was brought about largely due to his realization that there was no immediate hope of the EEC altering its policy in Africa. On this point see Ball, George W., The Discipline of Power: Essentials of a Modern World Structure (Boston: Little, Brown and Company, 1968), pp. 236–41Google Scholar. David Rockefeller, it seems, was interested in the idea of a special relationship with Latin America in order to gain some leverage on expropriation of American property in that part of the world. Gathered from interviews with State Department officials in Washington. According to Weintraub, a host of other American officials, legislators and individuals–Thomas Mann, William Clayton, Walter Lippmann, Jacob Javits and Walt Rostow–were also interested in special arrangements with Latin America. See Weintraub, pp. 149 and 156.

34 Gathered from interviews at the State Department in Washington.

35 See the statement by MrSolomon, in Department of State Bulletin, Vol. 57, No. 180 (09, 1967), p. 105.Google Scholar

36 Gathered from interviews with Latin American officials at OAS headquarters in Washington.

37 UN Document TD/56, p. 80.

38 U.S. Tariff Commission, 1972, p. 81A.Google Scholar

39 See the statement by the U.S. representative in TD/B/24 3/Rev. 1, p. 7.

40 U.S. Tariff Commission, 1971, P. 144; Department of State Bulletin, Vol. LXI, No. 1568 (07 14, 1969), p. 24Google Scholar; and European Community, No. 146 (06 1971), p. 27.Google Scholar

41 Gathered from interviews with Latin American officials at OAS headquarters in Washington.

42 Action for Progress for the Americas: An Address by President Richard M. Nixon, Department of State Publication 8501 (November, 1969).

43 Although President Nixon had never been too involved in trade relations with the Third World, Nelson Rockefeller, after his fact-finding trip to Latin America, had impressed upon him the need for a political trade-off. Rockefeller cited political unrest in Latin America and emphasized the need for both military aid and economic assistance (including GSP) from the United States to cope with the problem. See Quality of Life in the Americas: Report of a U.S. Presidential Mission for the Western Hemisphere (Chicago: Quadrangle Books, 1969), pp. 59–65.Google Scholar

44 On the deductive process of bargaining see Zartman, I. William, The Politics of Trade Negotiations between Africa and the European Economic Community (Princeton N.J.: Prince ton University Press, 1971), pp. 61 and 74.Google Scholar

45 On the “rigidity of the group system” in UNCTAD's decision making processes, see Nye, Joseph S., “UNCTAD: Poor Nations' Pressure Group” in Cox, Robert W. and Jacobson, Harold K. (eds.), The Anatomy of Influence: Decision Making in International Organization (New Haven: Yale University Press, 1973), pp. 338–9 and p. 352Google Scholar. For an indication of the “maximalist-minimalist” bargaining as it related to specific sub-issues of GSP, see U.S. Tariff Commission, 1971, pp. 8–12.

46 As Zartman puts it, “revisionist demands often crumble in the hands of the expert in detail, the politician of the process, the negotiator of compromise.” See Zartman, p. 196.

47 Gathered from interviews at the British Mission in Paris.

48 See the speech by Cronk, Edwin in Department of State Bulletin, Vol. 62, No. 1618 (29 06, 1970), p. 811.Google Scholar

49 Gathered from interviews at the Norwegian Mission in Geneva.

50 See Magne Reed's statements in UN Documents TD/B/218/Rev.1, p. 11 and TD/B/243/Rev. 1, p.9.

51 Gosovic, pp. 79–81 and 288–300.

52 See the statement by T. Swaminathan, Chairman of the Special Committee, in UN Document TD/B/300/Rev. 1, p.7.

53 See the statement by H. Santa Cruz, the Chilean delegate, in UN Document TD/B/262/Rev. 1, p.10; and the statement by H. Brillantes of the Philippines in UN Document TD/B/329/Rev. 1, pp.80–1.