Trade and Development (United Nations Conference)

Part of the debate – in the House of Commons at 12:00 am on 13 April 1972.

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Photo of Mr Frank Judd Mr Frank Judd , Portsmouth West 12:00, 13 April 1972

This week the fight for economic justice for the developing world will come to a head in Santiago, Chile. For five weeks starting today representatives of Africa, Asia and Latin America will be locked in confrontation with representatives of the industrialised world at the third United Nations Conference on Trade and Development. There will be some 2,000 delegates there from more than 130 countries. It is a sad reflection on our parliamentary system that in the midst of our insular pre-occupations no time has been found to debate what British policy should be at this conference, which is so vital for humanity. Once more, just as happened with Ireland in the past, we are in danger of failing to take seriously a major problem of the future until it overtakes us.

Already in the developing world outside China there is an overall unemployment rate of some 30 per cent. During the next 10 years the population of working age in those same countries will increase by a further 25 per cent., or 225 million. This increase cannot be prevented. The people are already born. It represents a gigantic potential social and political explosion which could literally engulf us all. Few countries are more dependent upon their economic, political and social links with the rest of the world than Britain. It is, therefore, as foolish and dangerous as it is immoral for the House to ignore the major challenge.

Despite the efforts of economically advanced nations to push the world monetary crisis well down the agenda at Santiago, there is little doubt that the spokesmen for the so-called third world see it as fundamental to their struggle for progress, and that, therefore, they will wish to ensure that it receives priority attention. Support for their cause has been forthcoming from Manuel Perez Guerrero, the Secretary-General of the United Nations Conference on Trade and Development. In his report to the conference, referring to the crisis he stresses that for the developing countries the most pressing need in the reform of the international monetary system is how to provide for an adaptation of that system that would make it more responsive than it has been hitherto to the problem of development. Guerrero emphasises the magnitude of the task. He says: It is a crisis not only of individual countries or groups of countries, but of the system itself. It demonstrates that the arrangements drawn up at Bretton Woods a quarter of a century go no longer provide a fully adequate framework for the further expansion of the world economy. Nor is the crisis confined to the international monetary system alone; it encompasses the entire range of international trade and finance as well as world output and employment. Those are the thoughts of the Secretary-General as the conference assembles.

In recent months there has been a series of meetings at places like Lima, Addis Ababa and Bangkok where representatives of the third world have assembled to prepare their case for the Santiago Conference. When one examines what has gone on at these preparatory assemblies it is clear there will be a demand that so much of the initiative in organisation of the world monetary system with its far-reaching consequences for the less developed countries can no longer be left to the Elitist Group of Ten alone. There is no doubt that for the developing world this management of the world economy by the Group of Ten smacks of economic imperialism. A direct presence for the majority of mankind at these deliberations in future will almost certainly be sought.

In support of this proposal, which I suggest deserves our support, it will be argued that the degree to which the world trading and monetary system is weighted against poorer countries is illustrated by the disastrous decline in the producing power of their export earnings. In 1950 their exports were 30 per cent. of world trade. By 1970 they were only 19 per cent. Where it took one ton of cocoa exported by Ghana in 1960 to buy a tractor, today it would take five tons. More recently the depreciation of the dollar may have added some 950 million dollars losses to the producing power of dollar reserves held by almost 100 developing countries.

It is not only on this front that the real commitment of the industrial countries to development will be tested at Santiago. Ninety-five developing countries have collectively prepared a further list of priorities. These include the international taxation of multinational companies, with the revenue devoted to development; the immediate implementation of aid targets, involving 1 per cent. of gross national product from industrialised countries, with 70 per cent. of that 1 per cent. passing through official governmental and intergovernmental channels; more commodity agreements similar to the Commonwealth Sugar Agreement; greater emphasis on multinational rather than bilateral trade; and loans on softer terms. In that latter connection it is no exaggeration to say that soon the developing world as a whole may be paying back more to the rich world than it receives in aid.

The developing world also demands the untying of aid, the linking of the special drawing rights system to development finance, increased regional co-operation between developing countries, preferential shipping rates, reversal of the trend to intercontinental trading blocs and the dismantling of the common agricultural policy of the European Economic Community.

If we are serious about development, all these demands should receive our attention and support. Yet there has not been a detailed statement to the House on the position of Her Majesty's Government, let alone any opportunity to debate the matter in detail.

Now the conference has begun, and for Britain and her potential partners in an extended E.E.C. the uncompromising request for the end of the common agricultural policy will come at a sensitive time. It inevitably undermines the high moral claims of those who like to argue that membership of the Community will strengthen the base from which to make a worthwhile contribution to solving the economic and social problems of the wider world, for nobody will deny that one non-negotiable cornerstone of the Community has been its common agricultural policy.

On the same score, those who care for the future of the Commonwealth Sugar Agreement and question its chances of long-term survival within the E.E.C. will be tempted to smile wryly at the call for more commodity agreements. The pressure for speedy fulfillment of aid targets also comes at an intriguing time for countries like Britain. At this very moment the British Government are pushing through Committee their Overseas Investment and Export Guarantees Bill, which is designed to strengthen the rôle of private investment in Britain's approach to the developing world, and Ministers are at pains to explain that they do not accept the 70 per cent. official aid target urged first by the Pearson Commission and subsequently by the developing countries in their preparatory deliberations for the present session of U.N.C.T.A.D. As we are now the only major industrialised country which rejects this part of the aid target, it is incumbent on the Government to spell out in more detail why they take this view.

Santiago will provide one of those all too rare moments of truth in international politics. The inescapable logic of a policy genuinely designed to secure the emancipation of the developing world will be pitted against the stark reality of economic power politics as they really operate. The bluff and hypocrisy of the industrialised West and Communist world will be called.

The tragedy is that if the history of the first and second United Nations Conferences on Trade and Development is repeated when confronted with the unyielding selfishness of the wealthy world, the unity of the third world, which is essential for effective long-term progress, will rapidly fragment.

Faced with the dire struggle literally for life or death, one developing country after another may begin to compete with its allies in a scramble for short-term—and, therefore, probably counter-productive—self-interest. There is no shortage of cynical opportunism in the industrialised world waiting to exploit just such a development.

It is perhaps appropriate to recall that the present Prime Minister, in a former capacity, at the first U.N.C.T.A.D. established a very positive reputation. It is, therefore, all the more profoundly disappointing that there has as yet been absolutely no evidence that the Government have taken on board the real significance of the third session of U.N.C.T.A.D. for the developing world and, in the long run, for the industrialised world, of which we are a part.