VI. The Charter of the Economic Rights and Duties of States 76. The countries gathered here stress the need for the international community to comply in full with the precepts contained in the Charter of Economic Rights and Duties of States, so that it will become an effective instrument for establishing a new system of intemational economic relations based on equity, equality, sovereignty and the interdependence of the interests of the developed and the developing countries. TD United Nations Conference on Trade and Development TRADE AND DEVELOPMENT BOARD Eighth session Geneva, 10 February 1975 Item 5 of the provisional agenda Distr. 9 December 1974 Original: ENGLISH An Integrated Programme for Commodities Report by the Secretary-General of UNCTAD This report, together with its supporting papers, presents a number of major proposals for priority consideration by the Committee on Commodities in response to resolution 124 (XIV) of the Trade and Development Board. Paragraph 6 of the resolution requested the Secretary-General to elaborate further the proposals contained in his note on an over-all integrated programme for commodities (TD/B/498), including inter alia the more detailed elaboration of techniques, their feasibility and financial implications, examination of measures to help developing countries to promote the processing of raw materials, and examination of possibilities for exporting developing countries to increase their participation in marketing and distribution. Paragraph 7 of the resolution further requested the Secretary-General to make as many of these studies as possible available to the Committee for consideration at its eighth session. The five supporting papers referred to above are on (i) the role of international commodity stocks (TD/B/C.1/166/Supp.1); (ii) a common fund for the financing of commodity stocks (TD/B/C.1/166/Supp.2); (iii) the role of multilateral commitments in commodity trade (TD/B/C.1/166/Supp.3); (iv) compensatory financing of export fluctuations in commodity trade (D/B/C.1/166/Supp.4); and (v) trade measures to expand processing of primary commodities in developing countries (TD/B/C.1/166/Supp.5). GE.74-52092 (187) 1. Developments in the world economy in 1974 and those now more clearly foreseen for 1975 give added force to the sense of urgency expressed by the Trade and Development Board at the first part of its fourteenth session in calling for a new approach to international commodity problems and policies (resolution 124 (XIV)). The emphasis that now needs to be placed without delay on an international approach to problems of food and raw materials is being shaped by world events: Most important, it is now evident that a serious slowdown is occurring in economic activity in the major industrial countries, accompanied by unabated inflation and radical change in the international payments situation. The transmission of adverse effects to the economies of primary producing countries must be prevented by policies that maintain over-all levels of effective demand and prices for exports. International action on commodities must be prepared to deal with this prospect. Secondly, the imbalances in commodity supply and demand since 1972, together with oil developments and the food crisis, have stimulated a fundamental rethinking of the features of an international trading system that will assure vital supplies to importers, and give adequate incentives to primary producers. This concern is heightened by the extent of the recent upward fluctuations in commodity prices, and the important initiatives taken by producing countries in these circumstances to redress the balance of bargaining power in trade through co-operative association. An integrated commodity programme must incorporate better assurances as to supplies and markets, and greater price stability at levels that are adequate for producers and equitable to consumers; it should also allow for the constructive organization of producers in order to influence the operation of the institutional framework in international trade relations. Thirdly, present difficulties are symptomatic of long-term structural problems in developing economies brought about by concentration and over-dependence on primary production and export. An integrated programme ought therefore not to impede but should rather encourage diversification in agriculture and diversification (especially vertical) in the economy in general, based on fuller co-operation between industrial countries and the primary producing countries in their general trade policies. 2. For the first time in many years, the world is without adequate reserve stocks of essential foods and several industrial materials. The consequence may be greater instability in the world economy and in commodity trade than in the past. Yet roughly two dozen of the more important commodities or groups of commodities in world trade represent two-thirds of the economic activity for export of. the developing countries (excluding oil), and over half of the external purchasing power of the national product of at least 60 countries. Unless there is radical change of approach, there is little assurance that future output trends will be able to prevent asrecurrence of the present crisis, or will be adequate for the requirements of world trade or the economic development of most of the world's population. 3. On the basis of these general considerations, the following proposals are made on the key issues that would form the core of an international approach to commodity problems: (a) Establishment of international stocks of commodities, on a scale sufficient to provide assurance of disposal of production undertaken on the basis of a realistic assessment of consumption, as well as assurance of adequate supplies at all times for importing countries, and also large enough to ensure that excessive movements in prices either upward or downward can be prevented by market intervention; |