The United Nations Conference on Trade and Development (UNCTAD), is both a conference held every four years and an organization within the United Nations (UN). The first Conference (UNCTAD I) was held in Geneva, Switzerland, in 1964, and subsequently it was institutionalized as a permanent body within the UN. UNCTAD was originally conceived by developing countries as a counterweight to the dominant position held in the world trading system by developed economies. Although accused of being ineffectual in its early years, UNCTAD has evolved into a more respected organization, still focused on assisting economic development but whose research into foreign direct investment (FDI) and provision of policy support is held in high regard.
A History Of UNCTAD
During the 1950s, developing countries had little engagement with the emerging governance of international trade through the General Agreement on Tariffs and Trade (GATT). The principle of nondiscrimination in trade relations, as embodied in GATT, was seen as unhelpful to the future economic prosperity of developing countries. Marginalized from the GATT processes, these countries sought a way to press for preferential treatment in trade regulation. This was realized in the first UN-sponsored conference in 1964 (UNCTAD I), where developing countries gathered to argue for a system of positive discrimination in international trade regulation.
Those initial countries represented became known as the Group of 77 (G77). In what might be seen as a response to UNCTAD I, in 1965 Part IV of GATT was drafted, which gave leeway for developing countries to have special and differential treatment in trade policy. However, it was not until the 1970s that this potential became realized through what became known as the Generalized System of Preferences, first adopted by the European Community and Japan (1971), Canada (1974), and the United States (1976). Under this scheme, developing countries gained advantageous or zero tariffs on their manufactured goods when imported into participating developed nations, although there is uncertainty over how much developing countries as a whole gained.
By UNCTAD III in Santiago (1972), tariff policy was still the main focus, but discussion extended to the international monetary system and the power of multinational corporations. Through the 1970s, UNCTAD continued to support developing countries and in particular helped them to maintain their merchant marine fleets by establishing the Code of Conduct for Liner Conferences. By the 1980s, UNCTAD was providing increasing levels of technical support to developing economies, both in terms of policy and in more practical matters such as enhancing customs systems. Attitudes toward the success of UNCTAD vary, with the Economist arguing in 1992 that it was “still trying to live down its reputation as a sterile north-south talking shop and last bastion for those who champion an interfering state as the remedy for third-world poverty.” But since then, UNCTAD has improved its research on the links between development and trade, extended its technical support for developing nations, and embarked upon closer cooperation with the World Trade Organization (WTO), specifically in providing support for firms through the jointly managed International Trade Centre, a cooperative venture between GATT and UNCTAD initiated in the 1960s.
With the demise in 1992 of the UN Centre on Transnational Corporations (UNCTC), UNCTAD became responsible within the UN for monitoring the activities of multinational corporations, and for providing research-based policy advice to developing countries on foreign investment. Much of this work has been reported in its flagship publication, World Investment Report. This annual publication, initially instigated by the UNCTC in 1990, has evolved into the primary source for information and analysis of multinationals.
Much of the underlying data used in this report are available online, including country FDI profiles and its famous listings of the world’s largest multinational firms. Through these data, one can observe the growth of multinationals and the global spread of their activities. While these data are still beset with technical and methodological problems, they are well regarded and serve as a resource of lasting importance. UNCTAD also monitors changes to national and international regulation of FDI, and it is in these data that one has seen an overwhelming move to FDI liberalization since the early 1990s. Overall, it is this work on foreign investment and multinational corporations that has gained UNCTAD further prominence in the wider community of international business scholars and practitioners.
- Torbjörn Fredriksson, “Forty Years of UNCTAD Research on FDI,” Transnational Corporations (v.12/3, 2003);
- Bernard M. Hoekman and Michel M. Kostecki, The Political Economy of the World Trading System, 2nd ed. (Oxford University Press, 2001);
- International Business Publications USA, United Nations Conference on Trade and Development (UNCTAD) Handbook (International Business Publications, 2007);
- Shigehisa Kasahara et al., Beyond Conventional Wisdom in Development Policy: An Intellectual History of UNCTAD 1964–2004 (United Nations Publishing, 2005);
- “The Man From UNCTAD,” Economist (April 7, 1992);
- Tagi Sagafi-nejad, in collaboration with John H. Dunning, The UN and Transnational Corporations: From Code of Conduct to Global Compact (Indiana University Press, 2008);
- United Nations Conference on Trade and Development, UNCTAD Current Studies on FDI and Development (Serial Publication and United Nations Publications, 2006).
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