The first UN Conference on Trade and Development, which met in Geneva in the spring of 1964, recommended the establishment of a permanent UN body to deal with trade in relation to development. The General Assembly, noting that international trade was an important instrument for economic development and that there was a widespread desire among developing countries for a comprehensive trade organization, decided to establish UNCTAD as one of its permanent organs in December 1964.
The main purpose of UNCTAD is to promote international trade, particularly that of developing countries, with a view to accelerating economic development. UNCTAD is one of the principal instruments of the General Assembly for deliberation and negotiation in respect to international trade and international economic cooperation. It formulates principles and policies on international trade, initiates action for the adoption of multilateral trade agreements, and acts as a center for harmonizing trade and development policies of governments and regional economic groups. The 1992 conference reaffirmed UNCTAD's functions to be policy analysis, intergovernmental deliberation, consensus building, negotiation of international agreements, monitoring, implementation, follow-up, and technical cooperation.
UNCTAD has 191 member states and has granted observer status to a number of organizations. There have been 10 sessions of UNCTAD at approximately four-year intervals: Geneva (1964); New Delhi (1968); Santiago (1972); Nairobi (1976); Manila (1979); Belgrade (1983); Geneva (1987); Cartagena de Indias, Colombia (1992); Midrand, South Africa (1996); and Bangkok, Thailand (2000).
At the ninth session of UNCTAD, in May 1996, UNCTAD's new mandate sought to deal with:
The outcome of the ninth session was a comprehensive agreement by the member governments of UNCTAD on the treatment of development and a concrete program of work, to be implemented by UNCTAD before the next general session in 2000.
In his closing statement of UNCTAD-X, Secretary-General Rubens Ricupero concluded that to date global integration had affected only a dozen developing countries. He called for "real reciprocity," a new international order that would remove massive barriers to trade in agriculture, textiles and clothing; give developing countries recognition for their efforts in promoting economic solidarity—to "strengthen the move towards positive economic integration"; and transform existing international economic institutions so that they can "bridge the interests of both developed and developing countries."
Early in 2002, two years after the adoption of the Bangkok Declaration and Plan of Action, the Trade and Development Board carried out a detailed mid-term review of UNCTAD-X. At the mid-term review, Dr. Surakiart Sathirathai, Minister of Foreign Affairs of Thailand, stated that at UNCTAD-X the "risks and challenges of globalization" were deliberated on, affirming that globalization presends opportunities as well as risks and challenges. "Rapid economic globalization, as a result of technological advancement and liberalization of international trade, finance and investment, has led to an expansion of global economic growth and development. The imbalances of the globalization process, however, also produced severe adverse effects on the development process of many less developed countries, which are unable to adjust themselves to the fast pace of globalization," he said.
The continuing work of the organization is carried out between sessions by the Trade and Development Board (TDB), UNCTAD's executive body, established by the General Assembly. The TDB implements conference decisions and initiates studies and reports on trade and related development problems. The TDB reports annually to the General Assembly through the Economic and Social Council. It also serves as the preparatory body for sessions of the conference.
The Trade and Development Board has several standing committees that review trends and make recommendations in specific areas, including the Commission on Trade in Goods, Services, and Commodities; the Commission on Investment, Technology and Related Financial Issues; and the Commission on Enterprise, Business Facilitation and Development.
The UNCTAD secretariat is located at Geneva. It provides service to the conference, the TDB, and its subsidiary bodies. The Secretary-General of UNCTAD is appointed by the Secretary-General of the UN and confirmed by the General Assembly.
In May 1993 the UN General Assembly assigned the UNCTAD secretariat responsibility for servicing two subsidiary bodies of the Economic and Social Council: the Commission on Transnational Corporations and the Commission on Science and Technology for Development (see the section on "Economic and Social Development").
The UNCTAD secretariat also provided technical assistance to developing countries in connection with the Uruguay Round of multilateral trade negotiations which took place under the auspices of the General Agreement on Tariffs and Trade (GATT). It continues to provide such services for Doha Round of trade negotiations in connection with the World Trade Organization, the successor body to GATT.
Export promotion and marketing are the responsibility of the International Trade Center in Geneva, which is operated jointly by UNCTAD and GATT. The center focuses attention on export market opportunities and helps developing countries to train personnel in marketing and export-promotion techniques and to set up the institutions and programs necessary to build up modern export-promotion services.
In 1980, the Agreement Establishing the Common Fund for Commodities was adopted by the UN Negotiating Conference on a Common Fund. International agreements also have been concluded for nine commodities—cocoa, coffee, tin, olive oil, sugar, natural rubber, wheat, jute and jute products, and tropical timbers. The fund came into operation in September 1989.
At its 1976 session in Nairobi, UNCTAD adopted an Integrated Program for Commodities aimed at setting prices for the primary commodities of developing countries that would take into account world inflation, monetary changes, and the cost of manufactured imports. As part of the program, the Nairobi session agreed that steps would be taken to negotiate a common fund for the financing of buffer stocks that would be held or sold as conditions required, thus helping to end the wide fluctuation in commodity prices that has plagued developing countries dependent on these products as exports.
The eighth session of UNCTAD in 1992 recognized the need to formulate an effective international commodity policy for the 1990s. Commodity markets remained extremely depressed and most of the commodity agreements achieved by UNCTAD in the 1980s had lapsed. In 1993 UNCTAD began to develop a micro-computer-based commodity analysis and information system (MICAS), which provides comprehensive, up-to-date information on all aspects of commodity use, production, trade, and consumption. The system assists developing countries in managing their economies and competing more effectively in world markets.
UNCTAD adopted the General System of Preferences (GSP) in 1968, giving preferential tariff treatment in developed countries to manufactured goods exported by developing countries. By 1999, operating programs gave preferential treatment to more than US$ 70 billion worth of exports a year from more than 100 developing countries. However, the conference recognized that the more advanced developing countries benefited most from the system, and in 1992 efforts were undertaken to include more agricultural products and some "sensitive" industrial products.
UNCTAD initiated the development of the 1978 UN Convention on the Carriage of Goods by Sea (called the Hamburg Rules). By July 1993, the Hamburg Rules had received 21 ratifications and entered into force on 1 November 1993.
The Convention on a Code of Conduct for Liner Conferences (1974) provides for the national shipping lines of developing countries to participate on an equal basis with the shipping lines of developed countries. This convention became effective in 1983. In 1991 the conference reviewed this convention and adopted guidelines towards its more effective implementation. Technical and structural changes in liner shipping since 1974 were taken into account. By December 1995 there were 78 contracting parties to the convention.
The UN Convention on International Multimodal Transport of Goods (1980) establishes a single liability organizational structure for the international carriage of given consignments of goods entailing use of more than one mode of transport. By July 1993 it had received seven ratifications (entry into force requires 30 contracting parties). As of 2000, the convention was not yet in force.
The UN Convention on Conditions for Registration of Ships (1986) introduces new standards of responsibility and accountability for the world shipping industry and defines the elements of the genuine link that should exist between a ship and the state whose flag it flies. By July 1993 nine ratifications had been received (entry into force requires 40 contracting parties accounting for 25% of the world's tonnage). As of 2000, the convention was not yet in force.
UNCTAD also provides technical cooperation and specialized training projects financed in part by UNDP. Training courses cover multimodal transport, improving port performance, and the use of the Advance Cargo Information System (ACIS) to enable shipping lines and railway companies to track the movement of cargo.
The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (1980) establishes international means for the control of restrictive business practices, including those of transnational corporations, adversely affecting international trade, in particular the trade and economic development of developing countries.
Negotiations were begun in 1978 on an International Code of Conduct on the Transfer of Technology. The provisions of the proposed code fall into two broad groups: those concerning the regulation of the transfer of technology transactions and of the conduct of parties to them, and those relating to steps to be taken by governments to meet their commitments to the code. In 1991 consultations were held on setting up an intergovernmental group of experts to prepare ground for the resumption of negotiations on the code of conduct.
As a result of these consultations, the Trade and Development Board acknowledged that it was impossible at that time to obtain consensus on the outstanding issues for a draft code of conduct. In 1993 the Trade and Development Board established an Ad Hoc Working Group on Interrelationship between Investment and Technology Transfer to examine and encourage new initiatives on investment and technology policies that would facilitate technology transfer. This group adopted a work program aimed at examining issues of investment flows, transfer of technology and competitiveness, technological capacity-building in developing countries, and transfer and development of environmentally sound technologies. In light of the ongoing work of this group, the Secretary-General of UNCTAD recommended to the General Assembly in 1993 that further consultations on the code of conduct take place after the completion of the activities of the Ad Hoc Working Group.
UNCTAD also elaborated the Modes Clauses on Marine Hull and Cargo Insurance, which assists the insurance markets in developing countries to produce their own insurance policy clauses and conditions. UNCTAD also has prepared minimum standards for shipping agents that serve as guidelines for national authorities and professional associations establishing standards.
In the area of money and finance, UNCTAD devotes particular attention to the debt problems of developing countries and has negotiated measures of debt relief for the poorer among those countries, as well as a set of agreed guidelines for dealing with future debt problems. At its 1987 session in Geneva, UNCTAD recommended a number of policy approaches and measures to deal with debt problems, resources for development, and related monetary issues; commodities; international trade; and the problems of the least developed countries—all aimed at revitalizing development, growth, and international trade in a more predictable and supportive environment through multilateral cooperation.
UNCTAD and the World Bank developed a joint program to extend technical cooperation to developing countries in the field of debt management. UNCTAD is responsible for the software component of the project. The assistance is based on the development and distribution of the Debt Management and Financial Analysis System (DMFAS), software designed to enable debtor countries to analyze data, make projections, and plan strategies for debt repayment. UNCTAD trains operators to use the software. It also provides training for senior officials in raising their awareness of institutional reforms that might be necessary for effective debt management.
In 2002 49 countries were classified as least developed countries (LDCs). UNCTAD has taken a lead role in mobilizing support for LDCs by organizing two UN conferences on LDCs. The first, held in Paris in 1980, adopted the Substantial New Program of Action (SNPA), which defined measures to be taken by LDCs to promote their own development. The second, also held in Paris, in 1990, reviewed the implementation of the SNPA and strengthened the program.
UNCTAD has given political impetus to the setting of official development assistance at 0.7% of the GNP of donor countries. It also has recommended improvement of International Monetary Fund's compensatory financing facility for export earnings shortfalls of developing countries and the creation of special drawing rights for LDCs.
The eighth session of UNCTAD in 1992 requested that detailed analyses be made of the socioeconomic situations and domestic policies of the LDCs, their resource needs, and external factors affecting their economies. The ninth session of UNCTAD in 1996 adopted the Midrand Declaration, which called for greater partnership between developed, developing, and the least developed countries.
From 14–20 May 2001, the UN held the Third United Nations Conference on the Least Developed Countries—LDC III. The eradication of poverty was the main agenda on the program. In 2002, UNCTAD released a report on poverty in LDCs, "Escaping the Poverty Trap," which was the first international comparative analysis of poverty in the LDCs. It is based on a new set of poverty estimates, which enable empirically based analysis of the relationship between poverty, development and globalization.
The 1992 conference identified four priority areas to be analyzed.
The 1992 conference also discussed trade efficiency and the use of electronic data interchange to reduce the cost of transactions. In July 1995, UNCTAD organized a World Symposium on Trade Efficiency in Columbus, Ohio. The symposium was subtitled "New Technologies for Efficient Global Trade; UNCTAD's Tradepoint Network." The symposium united trade ministers, chief executives, and senior officials in focusing on new technologies in the fields of banking, insurance, transport, telecommunications, and information for trade. The promotion of international standards for electronic commerce was a key component of the symposium. The symposium also launched a worldwide process of alleviating technical and procedural barriers that prevent poorer countries from fully participating in world trade. UNCTAD is developing a Trade Point Network of 100 operational trading points to facilitate this process. At the end of 1999, 114 countries were participating in UNCTAD's Trade Point Program.
In November 2002, UNCTAD handed over its Trade Point Program to the program's beneficiaries, represented by the World Trade Point Federation (WTPF). The WTPF was established in November 2000, with its objectives being to open international markets to new participants and to make them more competitive by giving them access to the most advanced e-commerce technologies and information networks. The WTPF aims to develop the Trade Point network in close cooperation with member states while adhering to its developmental goals and assistance to weaker players in international trade.