United Nations Conference on Trade and Development

The United Nations Conference on Trade and Development (UNCTAD), is both a conference held every four years and an organization within the United Nations (UN). The first Conference (UNCTAD I) was held in Geneva, Switzerland, in 1964, and subsequently it was institutionalized as a permanent body [Page 1647]within the UN. UNCTAD was originally conceived by developing countries as a counterweight to the dominant position held in the world trading system by developed economies. Although accused of being ineffectual in its early years, UNCTAD has evolved into a more respected organization, still focused on assisting economic development but whose research into foreign direct investment (FDI) and provision of policy support is held in high regard.

A History of UNCTAD

During the 1950s, developing countries had little engagement with the emerging governance of international trade through the General Agreement on Tariffs and Trade (GATT). The principle of nondiscrimination in trade relations, as embodied in GATT, was seen as unhelpful to the future economic prosperity of developing countries. Marginalized from the GATT processes, these countries sought a way to press for preferential treatment in trade regulation. This was realized in the first UN-sponsored conference in 1964 (UNCTAD I), where developing countries gathered to argue for a system of positive discrimination in international trade regulation.

Those initial countries represented became known as the Group of 77 (G77). In what might be seen as a response to UNCTAD I, in 1965 Part IV of GATT was drafted, which gave leeway for developing countries to have special and differential treatment in trade policy. However, it was not until the 1970s that this potential became realized through what became known as the Generalized System of Preferences, first adopted by the European Community and Japan (1971), Canada (1974), and the United States (1976). Under this scheme, developing countries gained advantageous or zero tariffs on their manufactured goods when imported into participating developed nations, although there is uncertainty over how much developing countries as a whole gained.

By UNCTAD III in Santiago (1972), tariff policy was still the main focus, but discussion extended to the international monetary system and the power of multinational corporations. Through the 1970s, UNCTAD continued to support developing countries and in particular helped them to maintain their merchant marine fleets by establishing the Code of Conduct for Liner Conferences. By the 1980s, UNCTAD was providing increasing levels of technical support to developing economies, both in terms of policy and in more practical matters such as enhancing customs systems. Attitudes toward the success of UNCTAD vary, with the Economist arguing in 1992 that it was “still trying to live down its reputation as a sterile north-south talking shop and last bastion for those who champion an interfering state as the remedy for third-world poverty.” But since then, UNCTAD has improved its research on the links between development and trade, extended its technical support for developing nations, and embarked upon closer cooperation with the World Trade Organization (WTO), specifically in providing support for firms through the jointly managed International Trade Centre, a cooperative venture between GATT and UNCTAD initiated in the 1960s.

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