Nov 6, 1985
CONTROL PRIVATE RESTRICTIONS NOW, SAYS UNCTAD OFFICIAL.
GENEVA, NOVEMBER 4 (IFDA/CHAKRAVARTHI RAGHAVAN)— More effective measures to control Restrictive Business Practices (RBPs) were needed, if the plans to liberalise government restrictions on international trade were not to be lost through non-government barriers to trade, a UN Conference was told Monday.-Jan Pronk, assistant secretary-general of the United Nations, was addressing the UN Conference to review all aspects of the set of multilaterally agreed equitable principles and rules for the control of restrictive business practices (or "the set").- The review Conference has been convened by the UN General Assembly to review the application and implementation of the set, adopted by the UN General Assembly in 1980 as a set of voluntary guidelines, and to consider proposals for the improvement and further development of the set.- The Conference elected as its president Vijay Kumar Dar, Secretary in the Ministry of Industry (Department of Company Affairs) in the government of India.- Pronk reminded the delegates that while adoption of the set in 1980 was an important first step - given earlier unsuccessful efforts at the 1947 Havana Conference and at the UN ECOSOC in the 1950's - five years down the track, the challenge now was to improve and further develop the application of the set.- In adopting the set, governments had undertaken morally binding commitments to eliminate or effectively deal with RBPs that adversely affected international trade, and particularly that of the third world countries.- The implementation of these moral commitments required political will, the UNCTAD official pointed out.- There were a number of reasons why governments should now exercise this political will, even if it involved politically less attractive options, to fulfil their commitments on the set, Pronk underlined.- Outlining some of the reasons, Pronk noted that the conference was taking place at a time when many trading nations were facing extreme difficulties, and there was the call for a new round of Multilateral Trade Negotiations (MTNs) to halt the proliferation of governmental impediments to trade.- "But any gains made on this front should not de lost through non-governmental barriers to trade", Pronk stressed.- This required effective implementation of the set to bolster the efforts of governments and to bring a more stable and predictable climate to the international trading system.- RBPs had the potential of reducing export earnings and increasing the import costs of the third world countries, whose external debt was now almost a trillion dollars, and which faced increasing bilateral restrictions on their exports.- These countries also faced uncertainty because of currency fluctuations, and the stability of the international trade and finance systems was under threat.- Many of the elements for improving the set were already on hand, and past intergovernmental deliberations had already identified the scope for actions.- There were many examples of resort to RBPs by enterprises to control prices and quantities in various markets, distorting production and consumption structures in both importing and exporting countries and creating uneconomic distribution of resources.- There were the networks of "exclusive distribution cartels" in importing markets which created special difficulties to new comers, especially from the Third World.- There was also the issue of collusive tendering in international trade, as a result of which Third World counties had to pay excessive prices for their imports.- There was also the example of "tied purchasing" arrangements, whereby importers were unable to obtain certain products without buying a full range of unnecessary goods or services, thus affecting the capacity of the importing country to use local supplies and increasing their future dependency on outsider suppliers.- It was also important, Pronk said, that the nexus between governments and enterprises in the control of imports was broken.- RBPs, he complained, had become a convenient way for governments to restrain trade without having to take traditional tariff or non-tariff measures.- Too easily governments had encouraged their enterprises to use voluntary export restraints or orderly marketing arrangements with foreign enterprises - under threat of heavier restraints by the importing country if such arrangements were not entered into by the exporters.- Faced with threats of closure of factories and unemployment, RBPs were seen by governments as "lesser evil", and local industries had been allowed to collude to establish maximum quantities and minimum prices for imports.- With such restraints on foreign suppliers, "the domestic enterprises remained entrenched behind the wall of RBP protection" and structural adjustment was thwarted.- It was a contradiction to recognise the benefits of control of RBPs in domestic markets, but on the other hand refuse to accept them at the international level, Pronk underlined.- Any reform of the international trading system would inevitably need to bring under the principles and rules of the system the control of the RBPs.- In this situation, the conference would have to make a clear assessment of the effectiveness of the set so far, and decide on measures to improve and further develop the set, thus ensuring a more effective application and implementation of the set.- The UNCTAD secretariat, Pronk noted, had put forward some suggestions including the establishment of national capability to control RBPs and the development of international network among national authorities concerned, and the fostering of a more efficient mechanism of consultations among governments.- In this regard notification procedures, for identification and notification of RBPs, would open the door to future consultations between governments, a key to greater understanding and action on troublesome RBPs.- Such consultations, Pronk added, could be carried directly between governments or within an intergovernmental framework as provided in the set.-