International Trade Negotiations

Report Outline
Significance of the Current Talks
Recent Turmoil in World Trade
Prospects for Global Trade Reform
Special Focus

Significance of the Current Talks

U.N. Conference on Trade and Development

Trade is among the most crucial elements of today's global marketplace, and among the most complex. The give-and-take bartering of years gone by has been replaced by a vastly complicated international system of tariffs, quotas, taxes, duties, subsidies, cartels and commodity agreements that have made world trade almost incomprehensible to most Americans. But this year several international negotiations are under way that could have a profound and lasting effect on the conduct of world trade—and on the American economy.

“We are—this year—in the midst of what may well be the most extensive series of international negotiations on trade, finance, commodities and development in history—involving more nations, addressing more issues, and affecting more people than ever before,” Secretary of State Henry A. Kissinger said in a major speech May 6 to the United Nations Conference on Trade and Development, (UNCTAD) in Nairobi, Kenya. Although the United States exports about 8 per cent of its total output and imports about the same amount, that figure is low compared to other countries. Trade typically represents between 20 and 50 per cent of the output of most foreign nations, and the United States is the largest importing market, absorbing some 15 per cent of the rest of the world's exports. So American attitudes and actions on world trade can have significant repercussions worldwide.

The conference in Nairobi brought together delegates from 124 nations to discuss trade, aid and the growing economic gap between rich and poor countries. The Third World nations, with the bulk of the world's population and much of the world's resource supplies, are calling for a fundamental restructuring of the world trading system and a redistribution of global wealth. While not going as far as some Third World nations would like, the United States has made major policy proposals in Nairobi. In a lengthy and detailed speech clearly aimed at compromise, Kissinger proposed creation of a $1-billion International Resources Bank to “promote more rational, systematic and equitable development of resources in developing nations,” to “help insure supplies of raw materials to sustain the expansion of the global economy,” and to “help moderate commodity-price fluctuations.” He also suggested the creation of “commodity bonds” to improve supply and market access conditions and to help developing countries stabilize their export earnings. Kissinger said his proposals were aimed at improving trade conditions and commodity investments, moderating excessive price variations, stabilizing overall export earnings, and improving access to markets for products of developing countries while assuring a reliable supply to consumers.