International Trade Institutions and the North/South Dialogue
| Author | Mark W. Zacher,Jock A. Finlayson |
| Published date | 01 December 1981 |
| Date | 01 December 1981 |
| DOI | http://doi.org/10.1177/002070208103600403 |
| Subject Matter | Money and Markets |
JOCK
A.
FINLAYSON
&
MARK
W.
ZACHER
International
trade
institutions
and
the
North/South
dialogue
During
the
postwar
period
the world
has
witnessed
a
proliferation
of
international
institutions
concerned
with
economic
matters,
and
several
of the
best
known
have
been
in
the
sphere
of
inter-
national
trade.
In
the
late
1940s
strenuous
efforts
were
devoted
to
the
creation
of
a
grandiose
and
multifaceted
International
Trade
Organization
(ITO)
which
was
to
be
one
leg
of
the
institutional
tripod
on
which
the
global
economic
order
was
expected
to
rest.
The
other
legs
were
to
be
the
International
Monetary
Fund
(IMF)
and
the
International
Bank
for
Reconstruction
and
Development
(IBRD).
The
ambitious
ITO
scheme
came
to
naught
in
1950,
leaving
an
interim
trade
arrangement
(the
or
GATT)
and
several
newly
created
United Nations
bodies
to
fill
the
gap
as
best
they
could.
Under
the
aegis
of
the
United
Nations
several
international
commodity
organizations
were
established
in
the
late
195os
and
early
i96os,
and
then
in
1964
a
major
new
body,
the
United
Nations
Conference
on
Trade
and
Development
(UNCTAD),
was
created
at
the
insistence of
the
developing
countries.
Through
it,
as
well
as
other United
Nations-
affiliated
institutions
and
the
General
Assembly
itself, the
deve-
loping nations
have
persistently
sought
to
alter
the
locus
of
regu-
latory
authority
for
various
trade
issues,
to
increase
the
number
of
trade
matters
subject
to
conscious
intergovernmental
negotia-
tion
and
regulation,
and
to
reform the
decision-making
processes
Institute
of
International
Relations,
University
of
British Columbia.
The
authors
wish to
thank
the
Donner
Canadian
Foundation
and the
Social
Sciences
and
Humanities
Research
Council
for financial
assistance,
as
well
as
government
officials
in Ottawa and Washington
and
both
secretariat and
national
officials
at
the
United
Nations
for
information
provided
in
interviews.
TRADE
INSTITUTIONS
AND
THE
NORTH/SOUTH
DIALOGUE
733
characteristic
of
international
organizations concerned with
trade
relations.
This
article
will
examine
the
nature
and
outcomes
of
these
attempts
to
change
the
institutional
components
of
global
trade
r6gimes;
it
will
not
focus
on
the
complex
international
debates
and negotiations
related
to efforts to
reform
the
substantive
rules
and
major principles
governing
international
trade
and broader
economic
relations,
a
topic too
vast
to
be
treated
in one
short
essay.
By
studying
what
one
might
term
the
'institutional
issue'
in
North/South
bargaining
over
trade
issues,
insights
concerning
both
the
general
significance
of
international
organizations
and
the
structure
of
power in
global
economic
relations
are
generated.
THE
DEVELOPMENT
OF THE
POSTWAR
TRADE
ORDER
A
series
of
protracted
and
exceedingly
complex negotiations,
in-
volving
at
times
more
than
fifty
states,
took
place
during
the
1946-8
period
in
an effort
to
fashion
a
global
trade
order
for the
postwar
world.
The
centrepiece
of
this
order
was
to
be
the
International
Trade
Organization
(ITO),
which
would
consist of
both
an
institu-
tional
framework
for
consultation
and
regulation
and
a
large
number
of
rules
to
govern
or
guidce
state
conduct
in
several
trade-
related
issue-areas.
Initially
the
United
States
and
the
United
Kingdom
dominated
the
negotiations,
but
by
the
time
of
the
final
negotiating
session,
the
Havana
Conference
of
March
1948,
many
other
countries
had
developed
firm
views,
and there
were
marked
differences
among
the
participants
at
Havana,
including
over
ques-
tions
of
institutional
design
and
decision-making.
The
United
States
sought
to
introduce
a
system
of
'heavy'
weighted
voting
into
the proposed
ITO,
which
would
grant
it enor-
mous
influence
because
of
its
dominant
position
in
world
com-
merce
at
the
time.
The
United
Kingdom
and
several
other
deve-
loped
countries
supported
'light'
weighted
voting.
The
numerous
underdeveloped nations
at Havana argued
for
the 'democratic'
principle
of one
state, one vote;
35
of
the
56
states
attending
the
Havana
Conference
in
fact
supported
this
position,
and
it
was
thus incorporated
into
the
Havana
Charter
for
the
ITO
(chapter
734
INTERNATIONAL
JOURNAL
vii,
section
B).1
The
United
States
apparently
agreed
to
abandon
its
position
on
weighted
voting
in
exchange
for
provisions
requir-
ing
'special
majorities'
(usually
two-thirds)
on
key
questions
such
as
waivers
from
ITO
obligations and
the
creation
of
new
trade
preference
arrangements.
2
Washington
had
no
doubt
determined
that
it
would
not
be
difficult
to
mount
a
'blocking
third'
of
ITO
votes
in the
event
that
certain
countries
tried
to
obtain
wholesale
waivers
from
some
of
the
more
stringent
legal
obligations
such
as
those
related
to
the
use
of
quotas,
whose
elimination
was
per-
haps
the
primary
aim
of
American
trade
policy
in
the
late
194os.
Moreover,
it
was
widely
understood
that
the
piling
up
of
majori-
ties
against
the
views
of key
powerful
states
would
not
be
profit-
able,
an
attitude
that
has
not
always
been
shared
by
the
interna-
tional
community
in
subsequent
years.
With
respect
to
the
structure
of
the
proposed
organization,
final
authority
was
to
reside in
a
conference
of
all members.
An
executive
board
would carry on the
detailed
work
and
day-to-day
administration
of
the
organization and
supervise
the
implemen-
tation
of
its
rules.
The
board
was
another
contentious
issue
at
Havana,
and
one
that
also
divided
the
industrial
and
the
under-
developed
countries.
The
latter
argued
against
the designation
of
permanent
executive
board
members.
However,
particularly
once
the
option
of
weighted
voting
within
the
ITO
as
a
whole
was
aban-
doned,
the
United
States
and
other
developed
nations
insisted that
the composition
of
the
board
reflect
the
relative
importance
of
various
groups
of
countries
in
the
world
economy.
The
solution
involved
acceptance
of
the
principle
that
the
eight
members
of
'chief
economic
importance'
be
granted
permanent
status
on the
executive
board,
with the
conference
to
determine,
by
a
two-thirds
vote, which
eight
states were to
qualify
at
three-year intervals.
The
remaining
ten board
members
would
also
be
elected
by
the
conference
by
a
two-thirds
vote,
with
particular
attention
being
given
to
the
need
to
ensure
that
the
board would
be
representa-
i
W.A.
Brown
Jr,
The United
States
and
the
restoration
of
world
trade
(Wash-
ington
1950),
145.
2
Ibid,
146.
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