Origin and History of United Nations Conference on Trade and Development (UNCTAD)
The need for reducing disparities between the rich and the poor was keenly felt at the global level. Particularly developing countries in Asia, Africa and Latin America realized the importance of global efforts to be undertaken in this direction. In order to fulfill the above, the United Nations Conference on Trade and Development (UNCTAD) came to be established on 30th December, 1964.
The UN session aimed at attaining a minimum of 5 percent annual growth rate for the developing countries by the end of 1970. It sought the help of developed countries to attain the above objective. In 1960s, most of the developed countries became independent of their formal imperial masters. These nations launched programmes of rapid industrialization of their backward economies.
As developing countries required enormous amount of investments for their rapid industrialization, this has necessitated large imports of capital goods. But their export earnings were not sufficient for the purpose of import of capital goods and technical know-how. Resultantly, huge balance of payments deficits prevailed in most developing countries. During 1950s, these deficits were made good with foreign loans. But the conditions attached to foreign loans were difficult to comply-with. It was also realized that the protection available from GATT was inadequate to their needs. In this context, UNCTAD came into existence in 1964 as a permanent organization of UNO with its own permanent secretariat. UNCTAD has its headquarters in Geneva.
Organization of UNCTAD
The UNCTAD was set up as the permanent organ of the UN General Assembly. It has its own structure of subsidiary bodies and a full time secretariat. It has established a Trade and Development Board to take policy decisions when the conference is not in session. It has 155 members, elected from among its members in proportion to geographical distribution. The Board meets twice a year.
There are four subsidiary committees to assist the Trade and Development Board. These include
- the committee on commodities
- the committee on manufacture
- the committee on shipping and
- the committee on invisible items and financing related to trade.
Generally, these committees meet once a year. However, special sessions of committees can be convened to transact matters of urgent nature. All the members of the United Nations are entitled to become the member of the UNCTAD.
A special committee on preferences furnishes reports from time to time for the conference to be held.
Basic Principles of UNCTAD
The first conference held in 1964 laid down UNCTAD’s action programme and priorities. The various recommendations are based on the following principles:
1. Every country has the supreme right to freely dispose of its natural resources for the sake of its economic development. It can freely trade with other countries.
2. Principles of sovereign equality of states, self determination of people and non-interference in the internal affairs are the principles which guide trade and economic relations between countries; and
3. There shall be no discrimination on the basis of differences in socioeconomic systems. The adoption of various trading methods and policies shall be consistent with this principle.
Functions of UNCTAD
UN General Assembly has laid down certain essential functions of UNCTAD. Accordingly, it shall promote accelerated development of the less developed regions of the world by dealing properly with the problem of slow expansion of exports confronting the less developed countries. The other important functions of UNCTAD are as follows:
1. To promote international trade between the developed and underdeveloped countries with a view to accelerating economic development, special emphasis should be laid upon the accelerated development of the underdeveloped countries.
2. To formulate the principles and policies on International trade.
3. To negotiate multinational trade agreements.
4. To make proposals for implementing its principles and policies.
5. To promote research and support negotiations for commodity agreements, technical elaboration of new trade activities designed to assist in the areas of trade and capital for developing countries.
6. To generally review and coordinate the activities of other institutions within the fold of United Nations relating to international trade and economic development.
7. To act as a centre for harmonious trade related policies of governments and regional economic groupings in pursuance of Article 7 of the Charter of the United Nations.