Group of 77

The 1960s were a time of tremendous global change as rapid decolonization occurred in Africa, Asia, the Caribbean, and the Pacific. These third-world countries at first concentrated on political collaboration in the Non-Aligned Movement, formed in 1961. However, attention soon turned to the economic problems of postcolonial economies, in particular the high levels of commodity concentration; the imbalance in the terms of trade for these primary producers vis-à-vis manufacturing countries; the vulnerability resulting from having few trading partners; the inadequate amount of aid—especially concessional aid—donated by industrial countries and the international financial institutions; and the decapitalization and other problems arising from uncontrolled foreign direct investment. As Africa and Asia turned to these economic issues, Latin American countries also found common ground with them.

The developing countries sought to effect changes within the United Nations. After a period of resistance from the industrial countries—except for the Soviet Union, which saw a chance to express its solidarity with the oppressed—the developing countries finally secured their goal of initiating a global debate on trade-related issues: The (first) UN Conference on Trade and Development (UNCTAD) was held in Geneva in 1964. The seventy-seven developing countries represented at the conference were dubbed the “Group of 77” (G77). This G77 became a permanent caucusing group for the developing nations when UNCTAD became institutionalized as a UN organ under the General Assembly. By 2004, the membership had climbed to 132, with China usually joining in endorsing the group's aims. The group is funded by member contributions and is headquartered in New York, with subsidiary offices in Geneva, Washington, DC, Rome, Vienna, Paris, and Nairobi.

The G77 has had several successes to its credit, the most recognized being the establishment of the generalized system of preferences (GSP) in 1968. Under this scheme, industrial countries agreed to eliminate import duties on selected manufactured products from the developing world. In the 1980s, a global system of preferences or trade concessions among developing countries (GSTP) was initiated. By the early 2000s, a GSTP agreement was in force among forty-four developing countries.

The G77 also had some success in the 1960s and 1970s in promoting commodity stabilization schemes in which buffer stocks, prices, or quotas were manipulated to ensure stable demand and supply. The group was also the main force behind the New International Economic Order, a comprehensive set of reformist proposals passed by the General Assembly in 1974. Among these proposals, the G77 espoused south-south collaboration both in the form of regional integration as well as trade and aid linkages between developing countries on the three continents. The G77 also helped develop a “code of conduct” for multinational corporations, and firmly pressed the idea of the annual transfer of 0.7 percent of GNP from developed to developing countries, a goal adopted by the UN during its successive “development decades.”

By the mid-1980s, however, the G77's protectionist approach to trade and its strident demands for concessions from the North began to conflict with the reality of the global trend toward economic liberalization. Many third-world countries, stagnating from high debt and inefficiencies resulting from rigid state control, were pushed into structural reform by their international creditors. They began to move away from the protectionist UNCTAD agenda toward reluctant acceptance of the now-predominant liberal agenda represented by the General Agreement on Trade and Tariffs and its successor the World Trade Organization. In the circumstances, the G77 adapted and sought to ensure that developing countries were not disadvantaged in free trade negotiations. In particular, the G77 pushed for special and differential treatment for developing countries to enable them to adapt to [Page 401]competitive trade gradually. Among other contentious issues being negotiated in the early to mid-2000s are the disadvantages to developing country producers arising from subsidization of farmers in industrial countries, issues impacting free trade in services, intellectual property rights (including pharmaceutical issues), and rules governing private investment. An informal subgroup of larger developing countries, the Group of 21, headed by China, India, Brazil, and South Africa, have led the negotiations with the WTO.

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