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Trade and Development - Coggle Diagram

- - - - The project followed various endorsements, until in the Second UNCTAD an agreement in principle was reached; Subsequently, this agreement continued to be discussed, with a view to concluding a system of Generalized Preferences (GSP).
        In short, with the GSP that was established, LDCs are granted access, duty-free or with reduced tariffs, to IPs' manufacturing markets. Such preferences are granted "for free", in one way.
        
        Now let's see some details:
        a) Duration period. At this point, agreement was soon reached that the preferences could be granted for a period of ten years, extendable for a similar period.
        b) E/ system of preferences. Just as the USA, the EFTA countries and Japan were in favor of a linear reduction system (accompanied by a safeguard clause to avoid market distortions), the EEC advocated a different method, based on the opening of duty-free tariff quotas for LDCs.
        c) Beneficiary countries. Which countries could benefit from a GSP? In principle, all underdeveloped.
        
        The effects of the GSP have been especially favorable for the LDCs that already have a certain degree of industrialization. But in this case the question is whether which countries are going to be considered for a long time as LDCs for the purposes of the GSP.
        Their problem is that in reality such countries, or large areas of them, are truly in a phase of intermediate development (IDP). Perhaps the ideal solution would be for the LDCs to receive preferential treatment from the industrialists, while granting preferences to the LDCs.
- - - - The first, complementary financing, is that which the LDCs could use to cover the differences between the projected revenues and the actual revenues needed to meet the objectives of a national development plan. Therefore, they would be resources to be used to cover the defects of the fiscal and internal savings structures of the LDCs.
      - The second, compensatory financing, would tend to “compensate” for the effects of fluctuations in international prices, in such a way that it would cover the difference between expected and actual external income, differences attributable, therefore, to the market. When dealing with these functions of the FM1 to solve transitory problems of balance of payments difficulties derived from fluctuations in international prices.
      - But while the problems of complementary and compensatory financing are interesting, much more so is the general issue of financing in a basic sense, as a set of financial resources that the LDCs should aspire to receive annually from the Pl.
        In this sense, in the Second UNCTAD a resolution was approved according to which the IPs would have to transfer annually 1 per 100, at least, of their PNB to the LDCs. But as Dr. Prebisch emphasized in 1969, what is missing is the specification of the period in which this resolution of such importance must be fulfilled.
        Some countries have already done so which, unfortunately, are not the ones that contribute the most in terms of volume of aid; but its moral effect is of great importance.
        
        The IV Conference (held in Nairobi, Kenya, from May 5 to 31, 1976) pronounced on the goal of 0.7 percent of the GNP as development assistance, without it being possible to reach the goal inscribed in the Manila Declaration (from the previous meeting held there by the group of 77 in February 1976) according to which all developed countries should effectively increase their development assistance in order to reach as soon as possible, and at the latest by 1980 , the target of 0.7 percent of GNP. Of course, such an objective was not achieved.
- - - - Commenting on these four points of the NIEO Call, the then Secretary General of the United Nations Kurt Waldhein made some very incisive remarks. "Many new nations have already won their political independence," he said, "but are still subject to economic dependency.
        In a certain way, the NIEO, one of the topics with the widest literature in the history of international relations, reminds us of the summer snake of Loch Ness in Scotland that, according to what they say, arises, disappears, returns, and leaves again; but that is only mentioned in the media on calm days of summer, when there is no other topic more helpful.
        In this sense, the NIEO already has a long history since 1974: the Conference on International Economic Cooperation in Paris in May 1977, the work of UNCTAD in its conferences in Nairobi in 1976 and in Manila in 1979, the Kennedy Round in 1973 to 1979 in the GATT, the Conference on Natural Resources held in Nairobi in August 1981 and that of September, in Paris, on the Least Developed Countries, to which we refer later.