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Monitoring The UN > The UN and Sustainable Development Trade and Sustainable DevelopmentThe process of "globalization" has become, we are told, the most powerful force unleashed on human civilization since the industrial revolution. The term itself, though still the subject of debate amongst academics and policy-makers, has come to symbolize the internationalisation of communications, culture and economic interaction. The most obvious impact of globalization at the turn of the century is the ever increasing importance of international trade to national and regional economies. The scope of international trade has also expanded to include not only traditional exchanges of commodities and goods but, more importantly, services and intellectual property or capital. International trade flows in merchandise alone are presently estimated by the World Trade Organisation to account for some $5.2 trillion (US) annually.1 The principal challenge for governments and international institutions is to develop and maintain international trading structures and mechanisms to facilitate the sustainable development of the world’s natural, human and financial resources, especially in the developing world. Though present-day discussions of trade focus on the need for "non-discriminatory" trade policies and systems, the history of international trade has been anything but non-discriminatory. At the dawn of the colonial era, explorers and their financial backers were given charters by royal houses to go forth into the unknown and claim "undiscovered" lands for their respective crowns. Shortly after discovery, the conquering powers would set about the business of resource extraction to enrich themselves and their rulers. In one of the earliest and most dramatic cases, the Spanish conquistadors, after having set up a defensible beachhead, would trudge into the jungles of Central and South America, seize refined or worked gold and silver goods and lay claim to known areas of precious metal deposits. These one way terms of trade—an outflow of gold and silver with very little in the way of imports—made Spain the richest of the early colonial European powers by the end of the seventeenth century. For the indigenous people of Spain’s American colonial possessions, however, contact and trade with the Spanish often meant war, enslavement, disease and even extermination. Spain’s supremacy in the international colonial and trading order was to be eclipsed during the eighteenth and nineteenth centuries by England, France and, to a lesser extent, Holland. After making significant advances in nautical design and navigation, England and France established colonies in North America, the Caribbean, Africa and Asia. Functionaries in the respective departments of the marine and treasury soon realized that ways and means had to be found to ensure that the colonies would not simply bolster international prestige but also enrich the state coffers. The costs associated with maintaining a local administration and garrison, as well as an effective deep sea navy to protect lines of communication and the physical security of colonial possessions, were becoming prohibitive. The industrial revolution begun in England, and making its way through Europe, demanded raw resource inputs and secure markets for manufactured outputs if production levels were to be sustained and increased. The solution to these vexing problems was to institutionalize favourable metropolitan-colonial terms of trade through a system known as mercantilism. Under mercantilism, administrators in the mother country would set prices to be paid for raw materials extracted from the colonies. Prices for manufactured goods and food to be exported to the colonies could also be negotiated or set by government officials and trade companies operating under royal charter. In such a system, prices for imported inputs would be kept to the minimum level required to support extraction and processing, while prices for exports of finished goods or food stuffs would be set as high as the colonial market could bear. To ensure that the system operated at maximum benefit to the colonial overlords, colonies were barred from trading with other regional producers unless given special dispensations, usually to trade with other regional colonies of the same European power. Classic examples of this system are the fur trading activities of both the French and English in the early years of Canadian settlement and the spice-for-cloth trading activities of the British East India Company on the Indian sub-continent and in the South Seas.2 Trading arrangements such as these, to say nothing of limited or non-existent opportunities for local input into the governance of the colonies—the exception being the experience of the "white" British colonies of North America, Australia, New Zealand and to some extent South Africa—impeded the development of indigenous manufacturing industries and created two-tiered colonial class systems of ruler and ruled. What economic and technological development there was, focused on bigger and better ways to extract natural resources and refine them into an exportable form at the lowest possible cost. Advances in extraction and refining seldom, if ever, took into account environmental degradation or the health of workers and communities. Where local communities resisted colonial laws and disrupted production, colonial administrators could be counted upon to preserve the status quo through force of arms and violent suppression. This, then, is the historical legacy of trade in the least developed and developing countries in the southern half of the globe. During the turbulent inter-war years of this century, many of the old colonial and mercantile systems of trade remained in place. The industrial countries of the north went through a cycle of economic boom and bust, culminating in the Great Depression of the 1930’s. European and North American governments viewed international trade in terms of winners and losers, where gains had to come at the expense of others. These were the dark trading days of "beggar thy neighbour".3 High tariff (taxes levied on imports) walls were erected in an attempt to stimulate domestic production and employment. Systems of imperial preferences were maintained or expanded, allowing materials and goods from the colonies to enter the metropolitan markets at lower prices than goods from rival nations. Trade policies became another arrow in the quiver of governments pursuing aggressive foreign policies. The results of these policies reinforced old colonial trading patterns which only served the interests of the metropolitan centers and caused a severe contraction in the aggregate value of international trade. Instead of lifting industrialized countries out of the economic quagmire, these systems of tariffs and preferences only dug countries deeper and deeper into economic depression and soured relations with other trading nations. As for the colonies, they remained mired in their traditional role of "drawers of water and hewers of wood". After the founding of the United Nations in 1945, governments began to see trade in terms of a win-win situation. A more open and liberal trading system, where resource allocation decisions were based on comparative advantage, could ensure that resources, goods and services were produced in the most efficient and profitable manner, thus benefiting all concerned. This is the premise upon which multilateral trade-liberalization negotiations, in the form or the General Agreement on Tariffs and Trade (GATT) were undertaken in the immediate post-war years. The goal of those negotiations (indeed those of today, as well, now under the auspice of the World Trade Organisation) was to arrive at a mutually agreed upon set of rules to facilitate open and beneficial trade relations among participants. With rapid decolonisation during the 1950’s and 1960’s, trade issues in international negotiations became roughly grouped into two categories: those pertaining to establishing common rules governing trade relations between the industrial countries of the northern hemisphere; and those which sought to address the colonial legacy of economic dependence, underdevelopment and unfavourable terms of trade with the developed, former imperial nations of Europe and North America. The chief challenge became finding ways to bridge the gap between north and south that also plagued discourse on a host of issues at the United Nations and at other international fora. Through a series of painstaking, multi-year, comprehensive negotiations, the international trade regime added new players and expanded the scope of issues on the books and on the table. Trade typically required the production of commodities and goods; something with which to trade. By the 1960’s, governments and populations were becoming increasingly aware of the environmental costs of producing materials for trade. For countries with large natural resource sectors, problems of deforestation, tailings and landscape devastation from mining and soil depletion related to intensive agribusiness farming put the sustainability of commercial resource extraction enterprises in question. For countries with large industrial sectors, polluted land, water and air as well as industrial disease came to the fore. It became apparent, through the 1970’s and 1980’s, that sustained economic development would have to be accompanied by effective environmental protection. A further complication concerning trade and sustainable development during the 1960’s, ‘70’s and ‘80’s was ideological rather than practical. Scholars looking at the economic and social plight of the least and less developed southern countries identified colonialism and the terms of trade associated with metropolitan-hinterland relations as the root cause of retarded social and economic development. Newly sovereign policy makers and governments picked up this basic assumption and applied it to national economic development strategies based on import substitution. Instead of continuing to import industrial and consumer goods, developing countries turned inward, raising tariffs and domestic subsidies to astronomical levels in order to stimulate local production. The result, after decades of near-religious adherence to import substitution policies, was artificially sustained domestic industries dependant on government subsidy and out-moded production processes and technologies. In parallel to countries following import substitution strategies for development, several countries on the Pacific Rim were experimenting with the opposite paradigm. Following the apparent success of Japan in post-war years, the countries which would become known as the "Asian Tigers" placed their faith in development through export-led growth. By taking advantage of available natural resources, relatively cheap labour and access to international shipping routes, these countries (notably South Korea, Singapore and Taiwan) focused their economies on producing consumer goods for export which were equal or better in quality and far cheaper than comparable goods produced in the north. By the late 1980’s, the burgeoning success of the Tigers and the economic stagnation of import substitution based economies seemed to prove to world leaders and academics that certain developmental benefits were indeed easier to realize through global market-based strategies. The core colonial assumptions of unequal terms of trade between developed and developing nations did not simply go away overnight, rather leaders rededicated their efforts to trying to mitigate the worst of the colonial legacy through the negotiation of rules-based multilateral trade agreements. At the groundbreaking United Nations Conference on the Environment and Development (The Earth Summit) held in Rio in June 1992, the issue of trade and sustainable development proved to be a major focus. The Agenda 21 programme of action produced after the conference declared that: "An open, equitable, secure, non-discriminatory and predictable multilateral trading system that is consistent with the goals of sustainable development and leads to the optimal distribution of global production in accordance with comparative advantage is of benefit to all trading partners. Moreover, improved market access for developing countries' exports in conjunction with sound macroeconomic and environmental policies would have a positive environmental impact and therefore make an important contribution towards sustainable development."4 This statement should be seen as a sea change in developmental thinking, especially for the less developed countries since the early days of de-colonialisation and a signal that there was no turning back as far a trade liberalization for all countries of the world. Recent UN Activities on Trade and Sustainable Development Five years after the Earth Summit (1997), Agenda 21+5 was released in conjunction with the mandated review of progress towards the goals set forth in the original Agenda 21 programme of action document. The section on trade and sustainable development focused not on the theoretical questions of whether or not trade was indeed beneficial for sustainable development; that was taken as a given. The section was, fittingly, a plan of action to outline concrete steps which had to be taken to mobilize the potential resources of international trade for sustainable development. Chief among the recommendations were:
The United Nations Commission on Sustainable Development (CSD), the functional commission charged with monitoring progress towards the Agenda 21 objectives, has devoted considerable time and effort to the relationship between trade and sustainable development. At CSD-8, scheduled for spring of 2000, trade will be addressed as one of the major cross-sectoral themes. The process of preparing in-depth discussion papers and draft resolutions is presently underway. As may be gleaned from the Agenda 21 + 5 trade objectives above, there are two major multilateral bodies undertaking work in the area of trade and sustainable development. The first is the United Nations Conference on Trade and Development (UNCTAD), while the second is the relatively new World Trade Organisation (WTO). UNCTAD’s life as a permanent intergovenmental body began in 1964 as a result of a United Nations Conference. UNCTAD has a membership of 188 states, whose representatives constitute it’s highest decision-making body, as well as a Secretariat and five functional Divisions or Offices headquartered in Geneva, Switzerland. UNCTAD presently administers a budget of $50 million (US) from the United Nations regular budgets and approximately $24 Million (US) for technical cooperation activities from donor countries and organisations.6 The organisation seeks to promote sustainable development through trade by supporting multilateral discussions aimed at increasing international economic cooperation for development and by developing and administering technical cooperation programmes to assist developing countries in overcoming practical obstacles to sustainable development which relate to trade. These programmes seek to: contribute to a better understanding of international economic problems and of their solutions; assist countries to strengthen their negotiating capacities as regards international trade, finance and investment; help countries improve systems and procedures for trade expansion in such areas as trade efficiency, customs, maritime transport, and for financial management; contribute to national policy development, in particular the relationship between trade, technology, finance and investment; and promote cooperation among developing countries. UNCTAD's technical cooperation activities may be grouped under five broad headings: international trade; sustainable development; financial resources; investment, technology and enterprise development; and, transport. Presently, UNCTAD is heading up some 300 projects.7 UNCTAD's governing body, the Trade and Development Board has assigned the following priority areas to the Secretariat in the form of a multi-year work programme: the interlinkages of trade and environment; methods for the internationalisation of environmental costs into the prices of all products; economic and regulatory tools to correct market deficiencies without hampering economic growth and development or jeopardizing competitive positions on international markets; market-based instruments for financing environmental protection; the implications for developing countries of basic principles designed to foster economic behaviour more in line with the imperatives of sustainable development; the linkages between poverty alleviation and sustainable development; and ways and means of promoting sustainable development at the national level, ensuring positive linkages between technological, sectoral and macroeconomic policies. UNCTAD also acts as the CSD’s principle taskmaster for issues of trade and sustainable development. UNCTAD meets at the heads-of-state or ministerial level every four years. The last meeting was held in Midrand, South Africa in 1996 and adopted a new mandate entitled "A Partnership for Growth and Development". The next meeting is scheduled for Thailand in 2000. The World Trade Organisation is, in essence, the result of fifty years of on-and-off negotiations directed at liberalizing the global trading system. The organisation’s mandate is derived from the terms of the results of the Uruguay Round of trade negotiations sponsored by member countries of the General Agreement on Tariffs and Trade (GATT). Begun in 1948, the GATT process was dedicated to spelling out the rules importer and exporter countries should follow when trading with foreign businesses and governments. The WTO, also headquartered in Geneva, is charged at present with providing advice and technical assistance to trading nations, administering the terms of GATT provisions, arbitrating disputes brought to it’s attention by member states and enforcing corrective measures. In the future, the WTO will sponsor new rounds of multi-year negotiations aimed at increasing intellectual property rights provisions and reducing artificial impediments to trade in areas such as agriculture, where tariffs remain high. For developing countries, the principal benefit of participation in the WTO is that through alliances of common cause, developing countries can work towards securing market access for their products in the developed world while championing measures to mitigate the worst effects of global market fluctuations on vulnerable domestic economies. The United Nations Conference on Trade and Development operates a very informative site where details on current programmes and projects, as well as official documentation, can be viewed or downloaded. See: http://www.unctad.org. For information on the activities of the World Trade Organisation in terms of sustainable development see: http://www.wto.org. Unfortunately, the site is very dense with regards to economic indicators but light in terms of specific information on trade and sustainable development at present. For information pertaining specifically to trade and the environment, a good source is the United Nation Environment Programme at http://www.unep.org. Due to the sheer size of their internet operations, however, it is not the easiest site to use. For information pertaining specifically to trade and development see the United Nations Development Programme at http://www.undp.org. To pursue issues associated with industrial development, trade and sustainable development, the United Nations Industrial Development Organisation is a helpful resource. See http://www.unido.org. It is often very difficult to separate trade and finance when discussing sustainable development. Therefore, those interested in investigating the financial frameworks designed to facilitate international trade and integrate developing countries into the international economy should visit the World Bank and International Monetary Fund sites at http://www.worldbank.org and http://www.imf.org respectively. Many of the above mentioned sites, as well as myriad official United Nations documents, resolutions, discussion papers, etc. concerning trade and sustainable development can be accessed through the UN Department of Social and Economic Affairs web site at http://www.un.org/esa. For independent and non-official level discussions of trade and sustainable development, a good stop would be the International Institute for Sustainable Development. There you will find studies, background information and extensive links to other relevant sites. See http://iisd1.iisd.ca. 1 World Trade Organisation; Press Release: "World Trade Growth Slower in 1998 After Unusually Strong Growth in 1997", 16 April, 1998, p.1. 2 For an excellent treatment of European metropol/hinterland relations in the age of empire see J. H. Parry, Trade and Dominion: The European Overseas Empires in the Eighteenth Century, (London: Weidenfeld, 1971. 3 For analysis of the issues of politics, economics and trade during the inter-war and depression periods, see the seminal works of E. H. Carr, The Twenty Years’ Crisis, 1919-1939, (New York: Macmillian, 1951) and C. Kindleberger, The World Depression, 1929-1939, (Berkeley: University of California Press, 1973). 4 Report of the United Nations Conference on the Environment and Development, Section II (a) "Promoting Sustainable Development Through Trade", para. 2.5, (A/CONF.151/26 vol. 1), 12 August, 1992. 5 Programme for the Further Implementation of Agenda 21, Section III, Sub-section A, "Integration of Economic, Social and Environmental Objectives", para. 29 (UN General Assembly Resolution A/RES/S-19/2), 19 September, 1997. 6For general information on UNCTAD budget resources and programme activities see: www.unctad.org/en/aboutorg. 7Ibid. |
