East–South Relations at UNCTAD: Global Political Economy and the CMEA

Robert M. Cutler

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East–South Relations at UNCTAD: Global Political Economy and the CMEA

Robert M. Cutler

Systematic studies of recent behavior by the socialist countries of Eastern Europe in universal international organizations are hard to find. Only a few works, nearly two decades old, address the behavior of the USSR, let alone its smaller allies, and they were completed before the UNCTAD machinery was put in gear.[1] The one exception to this statement concerns specialized international organizations.[2]

UNCTAD is of interest, however, precisely because it “is less political, more functionally specific, and technically oriented” than “the political organs of the United Nations … [while] at the same time it is less independent, more intensely political, more functionally diverse, and less technical” than

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the specialized agencies.[3] A focus on UNCTAD has the added advantage of permitting some comparisons, in a transnational context, between the collective behavior of the East European countries and that of the countries of the European Community (EEC) toward the Third World. Such comparisons are usually complicated by the fact that the intergovernmental economic organization of the East European countries—the Council for Mutual Economic Assistance (CMEA)—has neither the juridical status nor the common foreign commercial policy that the EEC enjoys. A focus on UNCTAD avoids this difficulty, for the CMEA is incarnated at UNCTAD as an autonomous collective entity, “Group D.”[4] The particular features of UNCTAD thus provide an opportunity not only to compare CMEA and EEC behavior toward the Group of 77 but also to examine the behavior of the socialist countries of Eastern Europe as a group in a unique international organization.

My purpose here is neither to analyze the relative influence of the socialist states of Eastern Europe on decisions in UNCTAD, nor to describe quantitatively their trade with the Group of 77. I intend, rather, to understand the CMEA countries’ response to the foundation of UNCTAD, behind which they were a motive force; to analyze how their behavior in the organization has been transformed; and to compare, within the focus provided by UNCTAD, the conduct of the CMEA with that of the EEC. The study suggests some basic characteristics of the East European CMEA countries’ response to the New International Economic Order.

The CMEA countries and the foundation of UNCTAD

During the 1950s the socialist countries of Eastern Europe had hardly any trade with the capitalist world. The organization of their foreign trade system did not dovetail with the system of commerce organized by the capitalist world. The situation of the LDCs being little more favorable, they and the CMEA countries alike were outsiders to the world trade system. It is true

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that during the 1950s the USSR and other CMEA members attached greater priority to East–West trade than to East–South trade (as is still the case today), but a rapprochement between the LDCs and the CMEA countries was nonetheless logical and natural. The latter sought to satisfy their own material needs at the same time as the former tried to ameliorate their situation. This was accomplished chiefly through long- term agreements for the purchase of primary products at stable and fixed prices. The two groups of countries found themselves not only advocating but also practicing a mutual solidarity in order, first, to resist the capitalist world trade system and, second, to transform it.

Several times in the 1950s the socialist countries of Eastern Europe, led by the USSR, advocated establishing an International Trading Organization (ITO)[5] that would have coordinated and overseen the activities of the United Nations, of its organs, and of every other international organization concerned with international trade.[6] From the beginning of the 1960s Third World countries began to enter the United Nations in greater numbers, and they took up the CMEA countries’ earlier initiative to reform the world trade system. They called for a conference on the subject to be convened, but they insisted that the world trade system to be established should respond to their own desires rather than those of the CMEA countries.[7]

The raison d’être that the Soviets gave for establishing an ITO—a proposal they made yet again at the discussions that were to culminate in the foundation of UNCTAD[8] —was the need to oversee the multitude of international or-

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ganizations concerned with world commerce. Various documents suggest, however, that the most important aspect of such an ITO from the Soviets’ point of view would in fact have been its universality. Their aim was to break Western control of existing international economic institutions, such as the General Agreement on Tariffs and Trade and the International Monetary Fund, which excluded the USSR.[9] One of the two principal goals of the Soviet-conceived ITO would have been to increase the legitimacy of the Soviet state in the system of international trade and in the legal regime governing that system. The Soviet Union also hoped that an ITO would promote the increase of East–West trade.

This conception of the ITO was less important to the functionaries in the USSR Ministry of Foreign Trade, whose responsibility it would have been to negotiate the organization’s foundation. The Ministry’s official monthly journal never gave the idea much attention, and reports from the USSR’s negotiators at Geneva, published while the 1964 Conference was still under way, do not mention an ITO at all; the Ministry journal’s polemics were directed, rather, chiefly against the GATT. At Geneva, the Soviet Union and its allies concerned themselves with complaints against the West’s embargo and trade discrimination. Soviet representatives at the Conference refused to accept responsibility for LDC poverty, but they backed LDC demands against the capitalist countries. The USSR, Czechoslovakia, Hungary, and Poland agreed to raise the level of their trade with the LDCs in general, and to increase their imports of primary products in particular.[10] Eventually, Soviet negotiators at Geneva dropped their own projects for an ITO in order to support the LDCs’ resolution that foresaw the establishment of the UNCTAD institutions suggested by Raúl Prebisch.[11]

Against possible criticisms of such tactics by their colleagues, two researchers at the Institute of World Economics and International Relations in Moscow, who had been attached to the Soviet delegation in Geneva, asserted the importance of establishing the rules for transforming the world trade system. In particular, they wrote:

But moreover, many of the socialist countries’ propositions addressed

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the character of international trade relations, the structure of the Trade and Development Council, technical assistance, etc., often while fighting the West’s alternative propositions. Why did this happen so? Above all, because what is concerned is the socialist countries’ fundamentally different approach from the imperialist camp, to the methods of developing world trade and to the establishment of those methods.[12]

Although the ITO had not been established as originally conceived, Soviet specialists on foreign trade regarded the results of the Geneva Conference favorably. Several months after the end of the Geneva Conference, one such analyst concluded a monograph on UNCTAD by observing that the LDCs emphasized the “questions of establishing without delay an organ of a transitional type that would be responsible for overseeing the fulfillment of the Conference’s decisions— including the question of founding a new international trade organization.” According to this author the institutionalized UNCTAD, including its Council, was an organ “of a transitional type”—a phrase not without significance in the Marxist–Leninist lexicon.[13] At the same time a Soviet jurist evaluated favorably the principles adopted at the 1964 Conference, which, he declared, affirmed and complemented those of the U.N. Charter.[14]

Group D negotiating behavior at UNCTAD

The two principal questions with which UNCTAD dealt during the 1960s were trade in commodities and preferential tariffs. Negotiations on these two subjects continued into the 1970s, the former in the context of a Common Fund, the latter in the context of a Generalized System of Preferences (GSP).

During the 1970s, other questions were raised at UNCTAD. They came to be resolved by the elaboration of various Codes of Conduct, of which a number now exist, some already agreed upon and some still only in draft form. I discuss two of these Codes: the Code of Conduct for Liner Conferences, which was the first to be negotiated; and the Code of Conduct for the Transfer of Technology, over which deliberations still proceed. Four sets of negotiations are thus treated here.

Commodities trade and the Common Fund

The CMEA countries’ policy in UNCTAD on the issue of trade in commodities is constrained by the national instruments through which their

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general trade policies are executed. These instruments impose a structure of trade bilateralism on their international trade. The organizational imperative of trade bilateralism is that debits and credits be balanced individually with every trading partner, and this is the root of the CMEA countries’ anxiety at the prospect of a multilateral system of oversight and control such as the Common Fund. Trade bilateralism is also responsible for the problems of the “transferable ruble” system, which at the time of its establishment foresaw the multilateralization of trade relations within the CMEA itself. [15]

Under the regime of trade bilateralism, the East European CMEA countries habitually prefer barter arrangements in commodities trade with LDCs, even for long-term agreements. They would otherwise be required to pay for those products with convertible currencies (which they prefer to use for purchasing Western technology and for servicing debts to Western banks) or to reserve for the LDCs a quota of their own products destined for export. Because the CMEA countries cannot satisfy their needs even by long-term bilateral agreements, they cannot entirely ignore efforts to harmonize the structure of world trade. They are consequently obliged to participate not just in world markets but in international commodity agreements as well.

Politically powerless to transform the world markets in which their economic needs require them to participate, the countries of Eastern Europe are habitually insecure in matters of commodities trade. The evolution of their attitude toward the issue of international commodity agreements is instructive. The change in the position of the USSR, the most conservative country in the CMEA and frequently the spokesman for Group D, illustrates the point.

The Soviet delegate to the UNCTAD session in New Delhi (1968) declared that his country could support the idea of an integrated program for commodities only if the use of buffer stocks were recognized as “a temporary measure … within the framework of wider commodity agreements.”[16] Five years later an authoritative article in the official journal of the USSR Ministry of Foreign Trade attempted to circumvent the suggestion, made at the VII (Special) Session of the UNCTAD Committee on Commodities, that the GATT concern itself with questions of access to markets and of price determination. It proposed that UNCTAD take charge of such matters instead. [17] Then in 1976, at UNCTAD’s Nairobi session, Group D finally came out

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clearly in favor of combining the creation of buffer stocks in the framework of a Common Fund with bilateral commodities trade in the framework of intergovernmentally negotiated trade agreements.[18] In 1978, however, the Soviet delegate remarked that such agreements could not refer to commerce between member- states of the CMEA, which was “fundamentally different.” Wishing to limit the effects that these multilateral arrangements might have on the USSR’s national economy, and fearful to protect his country’s national sovereignty, the Soviet delegate also stated that the USSR could subscribe only to those elements of such an international commodity agreement that were compatible with the plans and programs of the country’s economic system.[19]

By the end of 1979, the USSR was participating in the agreements on coffee (negotiated outside UNCTAD), tin, sugar, wheat, and cocoa; and it had showed itself ready to take part in the talks on rubber. Soviet participation in these agreements was limited to levying a tariff, destined to finance buffer stocks, on the exports of producing countries. However, this very participation marked a significant political change: the negotiations in 1980 on the Common Fund finally ended the Group D countries’ reluctance to finance buffer stocks with convertible currencies. Ignoring at the talks the question of principle—whether they should contribute scarce convertible currencies to the Common Fund—they became more concerned with questions of principal—what the level of their direct contribution would be to the capital subscribed by the signatory states, and how the level of their financial participation would affect the allocation of votes in the fund.[20]

Soviet negotiators abandoned their previous insistence on linking the creation of the Common Fund with the establishment of control over the activities of transnational corporations, a move they had touted as promoting “progressive socio- economic transformations in the developing countries.”[21] But if their positions have become less ideological, then such ideological questions have found expression in the terms of international law, for the Soviets and their East European allies pursue issues of this sort within a framework of international law. They base their arguments on nonbinding international documents, such as the Charter of the Economic Rights and Duties of States, as well as on legally binding deliberations, such as issue

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from the discussions at the United Nations Conference on International Trade Law on the activities of transnational corporations or at the International Law Commission (ILC) on the responsibility of states.

Being among the foremost champions of state sovereignty, Soviet jurists seek to limit the rights and obligations of international organizations under international law. They also work to minimize the capacity of international organizations to modify or to be modified by the international-legal framework in which they are situated. The Soviet delegate to the Sixth Committee of the UN General Assembly, for example, commenting on the ILC’s work, suggested—perhaps with the CMEA particularly in mind—that international organizations should be able to invoke their own statutes in order to decline to fulfill an obligation or to decline to submit to any part of a treaty that they may have signed.[22] Similarly, he opined that international organizations have only a “limited juridical personality” and that their competence to conclude international treaties is likewise “limited.” The Soviet position thus received a setback when it was agreed that the Common Fund should possess “full juridical personality” and enjoy “the capacity to conclude international agreements with States and international organizations, to enter into contracts, to acquire and dispose of immovable and movable property, and to institute legal proceedings.”[23]

The Generalized System of Preferences

The description of the Generalized System of Preferences as “a new type of preference in trade between developed capitalist and developing countries,” in the subtitle of an article in a professional periodical internal to the USSR Ministry of Foreign Trade,[24] may suggest that it does not apply at all to the Group D countries. However, it is worth noting that the inclusion of agricultural products in the final framework of the Generalized System of Preferences is due at least in part to the efforts of Group D, the members of which have always protested the agricultural tariff (and nontariff) barriers between them and the members of the EEC.

For most of the 1960s, the CMEA countries construed the issue of trade preferences to mean East–West trade or, in UNCTAD’s language, “relations between countries with different social and economic systems.” During that decade, however, Group D became the target of demands from the Group of 77. In this respect, the Cairo Declaration of the Developing Countries

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(1962) is the basic general document, and UNCTAD’s session in New Delhi (1968) the key forum where the LDCs specified the means through which they believed their general goals could be attained. The reply of the Group D countries was twofold. First, they maintained that East–South trade differed structurally from West–South trade in that it was more dynamic; by this they meant the quantitative statistics were more impressive. In fact, the annual growth rate of East–South trade was larger than that of West–South trade, but not so great as Group D suggested: their statistical comparisons were biased by their choice of base year. Second, the CMEA countries held that an increase in East–West trade would benefit world trade generally, including East–South trade.[25] They never explained why this should be so, but it nonetheless turned out to be true. It is worthwhile to consider briefly the source of this serendipity.

As trade expanded between the two European blocs during the 1960s, the East European states discovered that trade organizations in the capitalist world would take into account the idiosyncrasies of their national economic structures and institutions, and adapt themselves to their particular features. Some member-states of Group D responded by reforming their own national systems of foreign trade.[26] The degree of reform differed with the country; Poland and Hungary seem to have derived the greatest advantage from this evolution.[27] These reforms enabled those countries to respond more liberally to LDC demands, not just by introducing new tariff schedules but also by decentralizing toward the enterprise level the processes of decision and funding. This latter reform was more significant and had greater practical effect. Czechoslovakia had tended in a similar direction until the Soviet military intervention there in 1968.

In 1970 the member-states of Group D issued a joint declaration, since unchanged and still authoritative, on preferential tariffs with respect to the LDCs.[28] It stated that those East European countries maintaining tariff barriers would give preferences.[29] It also recalled that the USSR had abolished all tariffs on imports from LDCs in 1965.[30] Actually, these particular moves had little if any effect, because the consumption of goods in centrally planned

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national economies depends not on prices that are supposedly lower due to the absence of import tariffs, but rather on the level of imports foreseen in the plan. Thus it was more significant that Group D’s 1970 statement declared a willingness to provide, in the construction of national economic plans, for increasing the level of imports of finished semifinished, and agricultural products from the LDCs. The Group D countries said they would not only accept such imports as payment against credits but also give technical assistance in the construction of industrial enterprises. Furthermore, they would apply these measures to every LDC without prejudice to its social or economic system.

At the same time the socialist countries of Eastern Europe invoked, and they continue to invoke, the “principle of mutual advantage” and the “principle of the equality of rights and obligations” in an attempt to limit the advantages that the Group of 77 can derive from measures that respond to their demands.[31] In particular, Group D specifies that its respect for preferences in favor of the Group of 77 does not supersede its own desire that all trade be conducted “without discrimination.” By this the Group means that measures taken by the LDCs to promote trade with the capitalist countries in Group B should not weaken the socialist countries’ positions as exporters.[32] Thus the CMEA countries insisted, as they made concessions to the LDCs, that the latter should introduce measures favoring exports from the Group D countries, especially by granting terms of trade as favorable as those granted to capitalist countries.

The argument of the East European countries concerning the “principles” of world trade is representative of what may be called the “socialist offensive” in international trade law. The Group D countries use international trade law as a tool for transforming the existing system of world trade through the organs of the United Nations. Although jurists who are members of the ILC participate as private individuals, it is not without interest to note that citizens of the East European countries have played a large role in the deliberations on the most-favored-nation clause. The first Special Rapporteur of the ILC on the most-favored-nation clause was Hungarian, and his successor is Soviet. The question here is not whether nationals of the Group D countries tend to favor the interests of their states. The fact is that the similarity of these states’ social and economic systems creates common interests among them.

The question of the most-favored- nation clause, which the ILC took up

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following the agreement on the Vienna Convention on the Law of Treaties (1969), is inexorably bound to the question of trade preferences. The current Special Rapporteur to the ILC, who is Soviet, opined in 1978 that the “principles” of the GSP take precedence over any others. He adjudged the negotiations occurring under the aegis of the GATT, as well as the GATT’s opinions on the ILC’s deliberations, to be merely “supplementary” to GSP principles. [33] At the same time, he decided that the EEC is not an “international” organization but a “supranational” one: by virtue of which, he explained, it is unique, therefore having no substantive place in customary law nor any normative place in the law of treaties.[34]

The participation at the ILC of individuals trained in the academies of the socialist countries of Eastern Europe allows the introduction into such deliberations of what they call the “principles” of socialist international law. The case of trade preferences illustrates how the bias in favor of the state interests of the CMEA countries, found in socialist international law generally and trade law in particular, can exercise itself not only against developed capitalist countries but also against LDCs.

The Code of Conduct for Liner Conferences

The Code of Conduct for Liner Conferences was the first Code of Conduct to emerge from deliberations at UNCTAD.[35] Two key issues figured in its negotiation: the conditions for the Code’s entry into force and the rules of arbitration. When the group of 77 first proposed that arbitration be binding, Group D hesitated to accept the idea. They agreed with the 77 on most of the categories of disputes but made some reservations, most notably the determination of freight rates. Group B then proposed a new arbitration formula, called “mandatory reconciliation,” that would be applicable to all categories of disputes. Mandatory reconciliation is a nonbinding method that also permits the parties to a dispute to agree to a form of arbitration other than mandatory reconciliation. This proposal was supported by Group D, whose members probably saw in it an opportunity to preserve state sovereignty.[36] In fact, the formula of mandatory reconciliation creates conditions for the wider application, in general international law, of procedures and institutions peculiar to the socialist states of Eastern Europe.

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The importance attached to the question of arbitration in this Code, and the novelty of such Codes generally, raise the question of the juridical status of Codes of Conduct. The Soviet jurist G. M. Vel′iaminov has devoted much attention to determining the status of the resolutions of the quadrennial UNCTAD sessions. His analyses also speak to the question of the Codes. [37] In a first article, Vel′iaminov tried to reconcile the dichotomy between nonbinding and legally binding norms with traditional Soviet doctrine on the capacity of international organizations to create norms of international law.[38] Later, basing himself on the Soviet delegation’s interpretation of Resolution 15(II) of the New Delhi session of UNCTAD (1968), which recommended the augmentation of Group D’s imports from the LDCs, Vel′iaminov proposed a definition of a norm of international law that “includes the category of nonbinding norms” and which concerned the capacity of international organizations to create such norms.[39] Suggesting that international organizations play an increasing part in the elaboration of norms of international law, Vel′iaminov concluded that “many” of UNCTAD’s resolutions that “do not have a direct effect on the creation of norms can have significance for international law de lege ferenda [with respect to law to be proposed], particularly by preparing drafts of international conventions but also by helping specific norms to take root as customary law.”[40]

One requirement for the Code’s entry into force is curious: not only must a minimum number of states ratify it, but also the ratifying states must represent at least 25 percent of world shipping tonnage. This clause, proposed by Group D and then supported by the member countries of Group B, would seem to contravene the principles of the “representativity” of UNCTAD and the “equality of rights” of states, which the USSR seems to value so highly. But the USSR, as the fifth largest power in world shipping, uses such radical rhetoric only to mask its essential conservatism in matters of transforming the existing regime. For example, at the UNCTAD sessions in Manila (1980), Group D did not support the resolution to eliminate flags of convenience; it only desired the links between the flag and the country to be more strictly controlled. The clause on the Code’s entry into force thus in fact expresses the CMEA countries’ insecurity in the face of the LDCs’ desire to transform the system of maritime commerce. The USSR seeks a more formally legalized system that would provide it with the very security that

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such a transformation threatens. In this sense Group D’s approach to the issue reflects the general attitude that the Soviets habitually adopt at UNCTAD: change without risk.

As the majority of West European countries decided en masse to ratify during the quinquennial conference on the Code, it will enter into force. This decision was taken principally because those West European countries that had hesitated to ratify the Code—the United Kingdom, for example—were convinced, in the end, that it would protect them against competition from the Soviet fleet in East–West trade. The Code will constrain the socialist countries of Eastern Europe to furnish maintenance services equitably to every vessel, regardless of its country of origin. This provision contravened the desires of some Western powers, particularly West Germany, which had been negotiating such questions bilaterally with the USSR. Some questions, such as the status of ports in socialist countries—which in the view of some Western countries, notably the United Kingdom, are not managed on a “commercial basis”—remain unresolved. Doubts remain about the ability of future maritime conferences to resolve the numerous difficulties still existing. These doubts are not assuaged by the absence of a spirit of compromise from the convention that was charged with formulating the Code of Conduct in the first place.[41]

Despite some initial differences, the Group D countries and the LDCs have tended to reach agreement on the goals to be desired from negotiations. Group D’s tendency to use UNCTAD as a forum for denouncing imperialist exploitation manifested itself in perorations on “invisible commerce,” including the question of flags of convenience as well as that of insurance.[42] Working to protect their own interests, the East European countries have nothing to lose in supporting claims such as these by the Group of 77 against Group B. It is therefore probable, for instance, that Group D will, in the end, support the abolition of flags of convenience.[43]

The Code of Conduct for Transfer of Technology

Agreement on a Code of Conduct for Transfer of Technology has not been reached because of unresolved issues—the same issues that had complicated the negotiations on a Code of Conduct on Restrictive Business Practices (RBPs). Provisions for the transfer of technology were agreed upon during the talks on the RBP Code, but the LDCs have since hardened their position.

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They now oppose the insertion of those same articles into the draft of the Code for Transfer of Technology. The reason for this dissatisfaction has been the subject of speculation. Some Western participants had begun to question the vitality and utility of the multilateral negotiations at UNCTAD, which toward the end of the 1970s seemed to reach a general impasse. Thus it is possible that the RBP agreement resulted from a perception by the Group of 77 that an accord on some issue was politically necessary. Having signed the Code of Conduct on Restrictive Business Practices, the Group of 77 would have felt free to revise its position during later negotiations.

The liveliest question at the talks on transfer of technology concerns the law applicable to the settlement of disputes. Group B desires that a choice be possible between the law of the country transferring the technology and that of the recipient state, while the 77 maintain that the recipient should unequivocally hold jurisdiction. The 77 act as a bloc in confronting the developed countries, but they are in fact not unanimous. The most highly developed LDCs are potential exporters of technology, and they find themselves in a position similar to that of the Group B countries. They sympathize privately with Group B but rally publicly to the 77, where the influence of the least developed LDCs is quite significant. The question of the settlement of disputes rejoins that of arbitration, concerning which the socialist countries of Eastern Europe “widely recognize the autonomy of the will of the parties in contractual matters.”[44] The silence of the Group D countries on the question of applicable law bespeaks their tacit agreement with the point of view of the Group B countries.

Arguments over the character of the Code in international law shine further light on the matter. The Group of 77 has never supposed that transfer of technology could be regulated by anything but a legally binding Code; meanwhile, Group B has never stated that it would accept anything but a nonbinding Code. The position taken by Group D on the Code’s juridical character slowly approached that of the Group of 77, and by the end of the 1970s this trend had culminated in the two Groups’ agreement on the idea of a nonbinding instrument that would recognize “the principle of nondiscrimination according to the country’s economic and social system.”[45] In Group D’s view such a Code, following its adoption at UNCTAD, would become

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part of the law of nations and would then need to be integrated into the various national systems of law. But the Group D countries have not committed themselves concerning the juridical character of the international institution foreseen to monitor the Code’s application. They prefer to postpone the decision on this matter, and thereby share the position taken on the issue by Group B.

Technology transfer from the socialist countries of Eastern Europe to the developing countries occurs within the framework of bilateral intergovernmental agreements or joint ventures.[46] Hence the CMEA countries do not feel affected by the question of controlling transfers between a parent transnational corporation and its subsidiary based in a developing country. The objective position of the Group D countries vis-à-vis the international patent system is not very different from that of the developing countries, and of the developing socialist countries in particular. The socialist countries of Eastern Europe lose nothing, then, when they agree with the Group of 77 that such transfers should be strictly regulated; moreover, since the Group D countries themselves import Western technology, they may benefit from the regulation of such transfers. They furthermore argue, according to the “principle of mutual advantage,” that Western countries should grant them, the Group D countries, terms as favorable as those that the developing countries receive.

Two important issues still unresolved in the negotiations over the Code for Transfer of Technology are the establishment of a “rule of reason” and that of an “effects test.” These involve finding agreement on a standard method for determining the positive and negative effects of a transferred technique on the recipient country. Sanjaya Lall has suggested that the political and economic system of a developing country may in general define the sort of techniques that are transferred to it. Although the question is complicated by the mixed character of the national economy of many LDCs, Lall appears to mean the absence or presence of state trading in the given economic sector.[47] The least developed LDCs, which are the most intransigent toward Group B, most often have socialist systems. It seems impossible for any proposed rule of reason or effects test to be neutral to the relationship between the organization of a country’s foreign trade system and the state itself; the resolution of the matter will probably require the participation of an intergovernmental group of experts.[48]

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International organization and CMEA foreign trade

UNCTAD and East–South commerce

The national economies of the East European countries are developing and their domestic economic structures are diversifying. The populations of these countries are increasing but they do not in general have sufficient raw materials or foodstuffs. Salaries are rising but consumer goods are lacking. UNCTAD, on the other hand, can make available information that would tend to organize world markets more “rationally.” Various expert groups on commodities have, for instance, written studies describing the structure of markets in raw materials for the UNCTAD Secretariat. It should be possible for the LDCs to establish direct links with CMEA countries for trade in raw materials and foodstuffs that the latter often buy at present through Western middlemen. UNCTAD’s division for Trade with Socialist Countries should be able to facilitate such contacts as well as to identify new arenas of potential cooperation.

Economic relations between a developing country and an East European country are based on a long-term bilateral “commercial, economic, scientific, and technical agreement.” Such agreements habitually contain a forecast of the level of trade, but the means for realizing the projection are always left to be specified later. Often the levels foreseen are not attained. Since the reason for failure varies with the individual case, it is not possible to give a general explanation of the phenomenon; nevertheless, the East European countries have shown themselves to be advantageous markets for those LDCs that are able to penetrate them. Furthermore, once the barriers are overcome, the LDCs are automatically included in the others’ annual economic plans.

Several key elements of the problem of how to increase East–South trade relate to the question of multilateralizing trade payments between socialist countries and LDCs. Multilateralizing the transferable-ruble system would not cure all the ills from which East–South trade suffers, but it could help increase that trade. The “transferable ruble” is an accounting unit now used only in trade between the USSR and other CMEA countries; it is not even used in trade between, for example, Poland and Hungary. It is possible that a regional East European institution could permit the CMEA countries to protect their national economies from the results of reforms that foreshadow a multilateralization of the transferable ruble. The 1980 proposal of two Polish economists to facilitate the transfer of technology from East to South by creating “quasi- supranational socialist enterprises [that] … would not be directly and continuously connected with the domestic economic plan” was made in this spirit.[49] Such institutions could make it possible for LDCs to

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export, to one of the smaller CMEA countries, goods produced in the LDCs using Soviet techniques. Were that to happen, a multilateralized transferable-ruble system could improve, via a third country, the balance of payments between the USSR and other CMEA members.

A multilateralized system would thus have unequivocal advantages in comparison with the current system of bilateral clearing. But inasmuch as this multilateralization may lead to a limited convertibility of the transferable ruble,[50] the LDCs could profit from it: for example, by using the transferable ruble only in their trade with East-bloc countries and conserving their fully convertible currencies for other needs (as most CMEA countries now tend to do themselves). Moreover, a multilateralization of payments in transferable rubles, with respect to third countries, could encourage the sentiment, already present among several CMEA members, that favors such a multilateralization within the CMEA. The Soviets draw advantage from the present structure of intra-CMEA payments, and consequently hesitate to take any move that suggests multilateralization of the transferable- ruble system.

Although such a multilateralized system would hardly resolve all LDC demands directed at the Group D countries,[51] it would open the way to a broader cooperation. Because of internal difficulties, however, the CMEA will require greater encouragement from outside to take the financial and institutional steps that will further benefit the Third World. Western countries could promote such a development in their role as participants in the program of Tripartite Industrial Cooperation, organized by the United Nations Industrial Development Organization.[52] UNCTAD itself could serve as a forum for discussion and as an organ for elaborating appropriate financial methods, with a view toward their application.

The CMEA and the EEC: a few contrasts

The Treaty of Rome gives the EEC competence to conduct external relations, and it specifies the manner in and the means by which to do so; the CMEA, however, has no analogous well-defined competence. Thus the EEC itself grants nonreciprocal preferences to the LDCs but the CMEA does not. Rather, each of its member states grants such preferences, modifying in turn the tariff schedule established by its national system of foreign trade.

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With respect to the Common Fund, the member states of the EEC are known to have disagreed among themselves over the very issue of stabilizing commodity prices. The Netherlands favored the establishment of the Fund, for example, whereas the Federal Republic of Germany and the United Kingdom originally opposed it. The participation of the EEC itself in commodity negotiations varies with the commodity involved, because the competence of the Community depends upon the method through which the buffer stocks are financed. Were the Community to assume responsibility for financing them, it would be exclusively competent in the negotiations; it appears too that the European Parliament would have to ratify the negotiated agreement in such a case. However, if the member states of the EEC participate directly in financing the buffer stocks, then the EEC would be obliged to negotiate in concert with its member states. The position of the EEC vis-à-vis the Common Fund is still more curious: by grace of a special provision it can become a member of the Fund, but it has no voting rights in the Fund even if it contributes capital to finance the buffer stocks that the Fund establishes. The CMEA has no standing in respect of either international commodity agreements in general or the Common Fund in particular.

A group of experts within the EEC studied the issues involved in the technology transfer negotiations and their work contributed to the draft Code elaborated by Group B.[53] The governments of the member states of the European Community, however, do not coordinate their negotiating positions on transfer of technology. This notwithstanding, the issue of technology transfer between a parent transnational corporation and its national subsidiaries divides the Community rather clearly from the United States. The disagreement—which reflects the EEC’s resistance to expanding the geographical domain where American antitrust law is applicable—existed during the negotiations on the RBP Code as well; however, the Community agrees with the United States on the other principal points at issue in the negotiations on the Code for Transfer of Technology, the determination of the rule of reason and the effects test. So far as the choice of applicable law for settling disputes is concerned, the member states of the EEC desire, like the other members of Group B as well as the Group D countries, to leave this open to the parties concerned.

The CMEA countries share an integrated perspective on international law and on its use in the international system, but this is hardly characteristic of the member countries of the EEC. It is evident from the several case studies here that the Group D socialist countries at UNCTAD are motivated in part by desires to increase the penetration of socialist juridical forms into international law and to unify international trade law. [54] But they are careful

[ page 139 ]

clearly to distinguish between, on the one hand, norms of international law that define the position of international organizations in the system of international relations and, on the other, rules that govern the creation of such norms. For example, G. I. Morozov (since 1970 the Soviet judge at the International Court of Justice) has differentiated between the field on which the battle is waged to establish “principles of commonly recognized international law” such as peaceful coexistence—principles of a general type that the USSR has introduced, and of which it is therefore entitled to give an authoritative interpretation—and the field on which the “normative-regulatory function of international law” operates, aided by “the juridical norms of the concrete sectors” of public and private international law. According to Morozov, the former field, which includes “that sphere of interstate intercommunication [mezhgosudarstvennogo obshcheniia] where the effect of international law is applicable,” defines and delimits the latter field, on which international organizations themselves, “specific and limited subjects of international society [mezhdunarodnogo obshcheniia]”act.[55]

Thus it is evident not only that the CMEA countries act in the context of their own systematically developed framework but also that the framework includes a clear conception of the role of international organizations. The contrast between the EEC’s behavior at UNCTAD and that of the CMEA appears, then, to reflect a difference in their conceptions of their respective juridical personalities.[56] The EEC participates as a unified body in UNCTAD only rarely, when its member states agree that the question at issue falls within the Community’s competence. The member countries of the CMEA, by contrast, coordinate their points of view before important sessions re-

[ page 140 ]

gardless of the question under discussion, and without exception they all present the same position. Nevertheless, the CMEA sends its own delegate to UNCTAD meetings only infrequently, whereas the EEC does so regularly.

The collective behavior of the CMEA countries at UNCTAD would seem to have nothing in common with that of EEC countries. The only similarity between the two groups appears to be attributive: both are composed of under a dozen states. The most evident organizational difference is that, whereas the European Community constitutes only a part of Group B, the East European CMEA countries constitute Group D in full. Influence on decision making in the EEC is not so concentrated as it is in Group D, where the USSR’s weight is preponderant. Yet it would seem that common policy attitudes among the socialist countries of Eastern Europe are due at least as much to the similarity of their position in the structure of world trade, as to the essential similarity of their domestic political structures. The conjunctural positions of the member countries of the EEC are more varied, and the divergence resulting from this is accentuated—except in special instances such as parent–subsidiary technology transfer—by the heterogeneity of those states’ domestic economic and political structures.

Conclusion

Although UN General Assembly Resolution 1995(XIX) established UNCTAD’s permanence at the end of 1964, the organization’s survival of internal disagreements was assured only at the end of 1965, with the approval of Resolution l9(II) by its Trade and Development Council. That Resolution excluded from UNCTAD’s competence any minute examination of the developed countries’ policies and so ended a West–South confrontation that had cast doubt on the institution’s viability.[57] In those early years the Group D countries had worked to attain two goals: to found an International Trading Organization following the Soviet idea, and to polemicize the idea of increasing East–West trade.

Subsequent changes in UNCTAD and in the transnational environment transmuted these motivations. The desire to establish an ITO led the Group D countries to support the creation of new organizations and institutional forms affiliated to UNCTAD, such as its Division for Trade with Socialist Countries and various intergovernmental expert groups. The desire to increase East–West trade, on the other hand, led Group D not only to advocate creation of a Committee for Trade between Countries with Different Economic and Social Systems, but also to push for the foundation of the United Nations Conference on International Trade Law, which was created following a Hungarian proposal to the General Assembly.

[ page 141 ]

It is instructive to consider patterns of Group D behavior at UNCTAD in light of the recent rediscovery of the analytic utility of the concept of “regime.” The praxis of the East European CMEA countries can be summarized in terms developed by Stephen Krasner: Group D adopts a modified structural approach, positing the primacy of states, in order to preserve its members’ prerogatives in what it sees as a Grotian world, where regimes are pervasive.[58] The explicit codification of an implicit regime becomes a process harnessed to the service of state interests. Thus the Soviet delegate to the Sixth Committee of the General Assembly declared that only states were able to create juridical norms, and that therefore the ILC should only attempt to formulate those tendencies in international law that states are likely to accept.[59]

This perspective on changing the world also recognizes that the institutionalization of a regime is an opportunity for transforming it. The socialist countries’ application of similar norms of international law (e.g., the similarity of their practice of international trade law, often codified into socialist treaty law) strengthens their argument for the integration into international regimes of those norms—which, even if technical in nature, tend to be influenced by the structure of the national economic systems they are designed to complement. They thereby reflect state interests. [60] Furthermore, it is possible for institutions themselves to become instrumentalities for regime transformation. Thus the Group D countries have emphasized the universally inclusive character of UNCTAD in order to attempt to substantiate their claim that it is superior in law over other international forums. [61] Whenever a trade question falls within the competence of an international organization other than UNCTAD—such as the GATT, the IMF, or the IBRD—Group D will contend that it falls equally within UNCTAD’s. The other organizations, the Group maintains, should therefore collaborate on the given topic with UNCTAD, which would fulfill the functions of coordination and oversight because its universality makes it more representative.

This analysis suggests an explanation of the dynamic of uncertain defensiveness that characterizes Group D’s attitude toward LDC demands. On

[ page 142 ]

the one hand, the forces that bring Group D and the Group of 77 closer together are based less on ideological considerations than on common domestic structures of state trading.[62] For instance, when the Group of 77 demanded that all developed countries annually contribute one percent of gross national product to financial development aid, Group D rejected the norm that the world may be divided into the rich (including both capitalist and socialist countries) and the poor. Group D cast responsibility for the LDCs’ plight onto Group B, which includes former colonial powers; but the USSR and its allies in Group D support the LDCs’ demands against Group B in matters of trade preferences and the regulation of technology transfer, demands from which they themselves may equally benefit. On the other hand, the forces that drive apart the positions of the LDCs and the CMEA countries, whose divergence often reflects their respective positions in the world economy, derive from national (i.e., state) interest. Thus Third World demands for an increase in the level of East–South trade—which still is very low in comparison with that of West–South trade—for a time merely distracted the socialist countries of Eastern Europe from their preoccupation with their own complaints against the Western countries; and the Group D countries will not hesitate to defend their particular economic interests, whether by trying to avoid the obligation to contribute convertible currencies to the Common Fund, or by protecting their merchant marines against possible assaults at a future Liner Conference.

It is possible to discern from this research, using categories delineated by Krasner,[63] the syntax of logic that the Group D countries use in the dialogue over the evolving international regimes for trade and development: usage and custom, recognized by knowledge, become established norms and principles or give rise to alternative ones), which instrumental political power harnesses to the service of the state’s egoistic self- interest and rationalizes in terms of cosmopolitan political power (i.e., ideology). In the context of debates over the New International Economic Order, this may well be the generative grammar of CMEA discourse.

Notes

[ page 121 ]

I wish to acknowledge the support of the Albert Gallatin Fellowship in International Affairs at the Graduate Institute of International Studies, Geneva, without which I would have neither conceived nor executed this study. Members of the Institute’s faculty too numerous to mention graciously shared their expertise and experiences with me. The hospitality of Professor Urs Luterbacher and his colleagues greatly facilitated all my work. Professors Harish Kapur and Marlis Steinert of the Graduate Institute helped to shape the broad contours of this study by welcoming me into their Working Group, on EEC–Third World relations, where I presented a preliminary version of this research; and their suggestions greatly aided its revision. Comments by the editor of this journal led me to reformulate some important points, which Catherine Mannick helped me to clarify. The international civil servants and national representatives who accorded me interviews at the United Nations in Geneva deserve special mention. Their names are omitted here and in the notes, however, because they spoke in confidence. I am grateful to all these individuals for the opportunity to have pursued this research.

[Note 1]. Alexander Dallin, The Soviet Union at the United Nations (New York: Praeger, 1962); Harold K. Jacobson, The USSR and the UN’s Economic and Social Activities (Notre Dame Ind.: University of Notre Dame Press, 1963); Alvin Z. Rubinstein, The Soviets in International Organizations (Princeton: Princeton University Press, 1964). More recent are two unpublished theses: John O. Lindell, “The USSR in UNESCO” (Ph.D. diss., New York University, 1972) Charles Anthony Schwartz, “UNCTAD: Soviet Politics in the North–South Conflict” (Ph.D. diss., University of Virginia, 1972). The second of these, despite its title, deals almost as much with the defunct Havana Charter (1948) as with UNCTAD, and does not pursue a systematic analysis.

[Note 2]. Chris Osakwe, The Participation of the Soviet Union in Universal International Organizations: A Political and Legal Analysis of Soviet Strategies and Aspirations inside ILO, UNESCO, and WHO (Leiden: A. W. Sijthoff, 1972).

[ page 122 ]

[Note 3]. Branislav Gosovic, UNCTAD: Conflict and Compromise—The Third World’s Quest for an Equitable World Economic Order through the United Nations (Leiden: A. W. Sijthoff, 1972), p. 265.

[Note 4]. Group D includes the member-states of the CMEA at the time of the foundation of UNCTAD in 1964: the German Democratic Republic, Bulgaria, Hungary, Mongolia, Poland, Romania, Czechoslovakia, and the USSR. Mongolia entered the CMEA in 1962; the LDCs that joined the CMEA later, such as Cuba and Vietnam, continue to be part of the Group of 77, but they sometimes associate themselves with joint statements made in the name of the East European socialist countries. The full appellation used for the East European CMEA countries that compose Group D at UNCTAD is “the socialist countries of Eastern Europe”; here, “CMEA countries” and “East European countries” are used synonymously with this term. Romania, which calls itself a “developing socialist country,” no longer participates in Group D; since the UNCTAD sessions in Nairobi (1976), it has officially been a member of the Group of 77. The Group of 77 includes the LDCs, of which there are more than one hundred; Group B is composed of the industrialized countries that maintain a market economy.

[ page 123 ]

[Note 5]. See, for example: U.N. Economic and Social Council, “USSR Draft Resolution on the Establishment of an International Trading Organization,” E/AC.6/L.216 (7 July 1958), and “USSR Draft Resolution for the Convening of a Second United Nations Conference on Trade and Employment,” E/AC.6/L.217 (7 July 1958).

[Note 6]. U.N. Economic and Social Council, “Draft Resolution to Establish an International Trading Organization,” E/CONF.46/50 (22 May 1964), and “Letter from the Delegation of the USSR,” E/CONF.46/51 (5 February 1964).

[Note 7]. U.N. General Assembly, “The Cairo Declaration of the Developing Countries,” A/5162/Annex (16 August 1962).

[Note 8]. The Soviets also elaborated this argument during the preparations for the Geneva Conference. See, e.g., Iu. Ogarev, “Sozdanie mezhdunarodnoi torgovoi organizatsii—nastoiatel′noe trebovanie zhizni” [The Foundation of the International Trading Organization Is an Urgent Demand of Life], Mirovaia ekonomika i mezhdunarodnye otnosheniia, February 1964, pp. 82–94; A. Ognev and Iu. Ogarev, “Sozdanie mezhdunarodnoi torgovoi organizatsii—vazhneishaia zadacha konferentsii” [The Conference’s Most Important Task Is To Establish the International Trading Organization], Vneshnaia torgovlia 44, 2 (February 1964), pp. 1–19. The Soviets publish an English translation of Vneshniaia torgovlia, called Foreign Trade. However I have used the Russian-language version, which occasionally includes items omitted in the translated edition. In this article, Russian-language sources are transliterated according to the Library of Congress system, with diacritical marks omitted. All translations are by the author.
     I use Soviet sources here to establish the position of Group D because the member-states of Group D invariably present uniform positions, and the USSR has a preponderant voice in the Group. For a summary of some differences in nuance among the approaches of the CMEA countries to issues involving the Third World, see Barbara Despiney, “Pays socialistes et nouvel ordre économique international,” in Marie Lavigne, ed., Stratégies des pays socialistes dans l’échange international (Paris: Economica, 1980), pp. 104–110.

[ page 124 ]

[Note 9]. P. Khvoinik, “Diktat ili ravnopravie” [Dictates or the Equality of Rights], Mirovaia ekonomika i mezhdunarodnye otnosheniia, December 1965, pp. 15–26, examines the various international organizations concerned with world trade from this point of view.

[Note 10]. U.N. Economic and Social Council, “Possible Future Development of Trade between the Socialist Countries and the Developing Countries,” E/CONF.46/L.17 (12 June 1964).

[Note 11]. Richard N. Gardner, “The United Nations Conference on Trade and Development,” International Organization 22, 1 (Winter I968), pp. 104–5. Among the Soviet analyses alluded to in the text are: A. Bykov, “Nastoiatel′noe trebovanie vremeni” [An Urgent Demand of the Times], Vneshniaia torgovlia 44, 5 (May 1964), pp. 3, 6; an editorial, “Na Zhenevskom forume” [At the Geneva Forum], ibid., pp. 7–10; and an article by a member of the Soviet delegation to Geneva who was a division head in the Ministry of Foreign Trade, V. Spandar′ian, “K itogam konferentsii OON po torgovle i razvitiiu” [Toward the Results of the U.N. Conference on Trade and Development], ibid., 8 (August 1964), pp. 3–8.

[ page 125 ]

[Note 12]. Val. Zorin and I. Ivanov, “Zheneva: nekotorye vyvody i uroki” [Geneva: Some Conclusions and Lessons], Mirovaia ekonomika i mezhdunarodnye otnosheniia, August 1964, p. 83.

[Note 13]. B. M. Pinegin, Nasushchnye problemy mezhdunarodnoi torgovli [Vital Problems of International Trade] (Moscow: “Mezhdunarodnye otnosheniia,” 1966), p. 147.

[Note 14]. V. V. Fomin, “OON i nekotorye pravovye voprosy mezhdunarodnoi torgovli” [The U.N. and Some Legal Questions of International Trade], in Sovetskii ezhegodnik mezhdunarodnogo prava, 1964–1965 (Moscow: “Nauka,” 1965), p. 328.

[ page 126 ]

[Note 15]. For a brief explanation, see Lawrence J. Brainard, “Die sozialistische Wahrungsordnung in Bedragnis,” Neuer Zürcher Zeitung, 10 February 1978, p. 19. A demonstration, using trade statistics, of the failure to multilateralize commercial relations within the CMEA is given by C. H. McMillan, “The Bilateral Character of Soviet and East European Foreign Trade” Journal of Common Market Studies 13, 1–2 (1975), pp. 1–21.

[Note 16]. UNCTAD, Official Records, TD/II/C.1/SR.7 and 13 (12 and 19 February 1968), pp. 64, 156–58.

[Note 17]. L. Denisov, “K itogam VII (spetsial′noi) sessii Komiteta po syr′evym tovaram IUNKTAD” [Toward the Results of the Seventh (Special) Session of the UNCTAD Committee on Commodities], Vneshniaia torgovlia 53, 7 (July 1973), p. 26.

[ page 127 ]

[Note 18]. UNCTAD, “Joint Declaration by Socialist Countries,” TD/211 (28 May 1976), pp. 11–12.

[Note 19]. UNCTAD Press Release (unofficial document), TAD/INF/935 (6 January 1978).

[Note 20]. UNCTAD, “Agreement Establishing the Common Fund for Commodities,” TD/IPC/CF/CONF/24 (29 July 1980). See also Robert Bowers, “The Common Fund and Commodity Agreements: An Update,” Transnational Perspectives 7, 4 (1981), pp. 16–17.

[Note 21]. A. Ivanov and V. Polezhaev, “Konferentsiia OON po obshchemu fondu dlia syr′evykh tovarov” [The U.N. Conference on a General Fund for Raw-Material Commodities], Vneshniaia torgovlia 57, 10 (October 1977), p. 41. Ivanov works at the Ministry of Foreign Trade and Polezhaev is the Soviet representative at the UNCTAD Committee for Commodities. Cf. their article, written before the March 1977 Conference, “Problemy mezhdunarodnoi torgovli syr′em: aktual′nost′ poiski resheniia” [Problems of International Raw- Materials Trade: The Current Situation in Search of a Resolution], ibid., 56, 5 (May 1976), pp. 36–43.

[ page 128 ]

[Note 22]. U.N. General Assembly, Official Records, A/C.6/SR.1403 (6 October 1973), A/C6/SR.1489 (31 October 1974), A/C.6/32/SR.38 (7 November 1977).

[Note 23]. UNCTAD, “Agreement Establishing the Common Fund,” 29 July 1980, Art. 41.

[Note 24]. T. V. Filiminova, “Preferentsii IUNKTAD: novyi tip preferentsii v torgovle mezhdu razvitym kapitaliticheskim i ravivaiushchimsia stranami” [The UNCTAD Preferences: A New Type of Preference in Trade between Developed Capitalist and Developing Countries], Biulleten′ inostrannoi kommercheskoi informatsii19, 5 (1976), pp. 3–19.

[ page 129 ]

[Note 25]. See Gosovic, UNCTAD: Conflict and Compromise, p. 166, n. 42.

[Note 26]. For an excellent analysis that focuses more on political than on economic aspects, see Andrzej Korbonski, “Detente, East–West Trade, and the Future of Economic Integration in Eastern Europe,” World Politics 28, 4 (July 1976), pp. 568–89.

[Note 27]. A careful and systematic analysis of these developments may be found in Harriet Matejka, Trade Control in Eastern Europe (Geneva: Editions Médécine et Hygiène, 1978), chap. 5.

[Note 28]. See UNCTAD, “Report of the Special Committee on Preferences,” TD/B/329/Add.3 (9 October 1970).

[Note 29]. UNCTAD, “[The Generalized System of Preferences:] Scheme of Bulgaria,” TD/B/3781/ Add.1 (5 April 1972); UNCTAD, “[The Generalized System of Preferences:] Scheme of Czechoslovakia,” TD/B/378/Add.2 (5 April 1972); UNCTAD, “The Generalized System of Preferences: Report by the UNCTAD Secretariat,” TD/124 (12 November 1971), paras. 96–107.

[ page 130 ]

[Note 30]. U.N. General Assembly, “Letter from the Permanent Representative of the USSR to the United Nations, Addressed to the Secretary General,” A/5870/Rev.1 (5 February 1965).

[Note 31]. G. M. Vel′iaminov, Pravovye uregulirovanie mezhdunarodnoi torgovli [The Legal Regulation of International Trade] (Moscow: “Mezhdunarodnye otnosheniia,” 1972), pp. 208–34; Vel′iaminov, “Mezhdunarodno-pravovye osnovy vneshnetorgovykh sviazei SSSR” [The International Legal Bases of the USSR’s Foreign Trade Ties], Vneshniaia torgovlia 57, 10 (October 1977), pp. 48–57; G. E. Buvailik, Pravovoe regulirovanie mezhdunarodnykh ekonomicheskikh otnoshenii [The Legal Regulation of International Economic Relation] (Kiev: “Naukova Dumka,” 1977), pp. 318–25.

[Note 32]. UNCTAD, “Joint Declaration by Socialist Countries,” 28 May 1976, p. 15.

[ page 131 ]

[Note 33]. U.N. General Assembly, “Report on the Most-Favored-Nation Clause, by Mr. Nikolai Ushakov, Special Rapporteur,” A/CN.4/309 and ADD.1 and 2 (11 and 12 April and 10 May 1978), in Yearbook of the International Law Commission, 1978, 2, 1, pp. 26–28.

[Note 34]. Ibid., p. 9.

[Note 35]. For a broad study of shipping, see Lawrence Juda, “World Shipping, UNCTAD, and the New International Economic Order,” International Organization 35, 4 (Autumn 1981), pp. 493–516.

[Note 36]. In this connection, see A. I. Minakov, “O deistvitel′nosti arbitrazhnykh soglashenii” [On the Validity of Arbitration Agreements], Vestnik Moskovskogo universiteta, ser. 12, Pravo, 29 (September–October 1974), pp. 69–76, esp. pp. 74–76.

[ page 132 ]

[Note 37]. Vel′iaminov, Pravovoe uregulirovanie, pp. 109–14.

[Note 38]. Vel′iaminov, “Konferentsiia OON po torgovle i razvitiiu i mezhdunarodnoe pravo” [The U.N. Conference on Trade and Development and International Law], in Sovetskii ezhegodnik mezhdunarodnogo prava, 1969 (Moscow: “Nauka,” 1970), pp. 157–161. For a further examination, see A. G. Averkin, “K voprosu ob osobennostiiakh iuridicheskogo statusa IUNKTAD, IUNIDO, i PROON” [Toward the Question of Aspects of the Juridical Status of UNCTAD UNIDO and UNDP], Vestnik Moskovskogo unlversiteta, ser. 12, Pravo 29, 2 (March–April 1974), pp. 66–73.

[Note 39]. Vel′iaminov, Pravovoe uregulirovanie, p. 145.

[Note 40]. Ibid., p. 134.

[ page 133 ]

[Note 41]. Wulf-Peter Schiering, “Liner Code und EG–Schiffahrtspolitik,” Aussenpolitik 30, 2 (1979), pp. 188–90. I thank Samuel Evans for helping me to understand this particularly difficult article.

[Note 42]. G. A. Krasnov, Torgovlia uslugami ili ekspluatatsiia? [Trade in Services or Exploitation?] (Moscow: “Mezhdunarodnye otnosheniia,” 1971), pp. 7–96; G. Krasnov and A. Chekhutov, Developing Countries: Problems of Foreign Economic Relations (Moscow: Novosti, 1973), chap. 5.

[Note 43]. William Hall, “UNCTAD’s Plan to Transform World Shipping,” Financial Times (London), 18 January 1980, p. 18.

[ page 134 ]

[Note 44]. Jean-Paul Maire, “Problèmes de qualification juridique et de détermination du droit applicable aux accords de coopération économique et industrielle,” Annales d’études internationales 5 (1974), p. 95. See also François Dessemontet, “Transfer of Technology under UNCTAD and EEC Codifications: A European View on Choice of Law in Licensing,” Journal of International Law and Economics 12, 1 (1977), pp. 29–35.

[Note 45]. To observe this evolution, it is instructive to compare two summaries of the state of the negotiations drawn up three years apart: Jean Touscoz, “Le code international de conduite pour le transfert des techniques,” in P. Judet et al., eds., Transfert de technologie et développement (Paris: Librairies techniques, 1977), pp. 197–225; and P. Roffe, “UNCTAD: Code of Conduct for the Transfer of Technology—Progress and Issues under Negotiation,” Journal of World Trade Law 14, 2 (March–April 1980), pp. 160–72.

[ page 135 ]

[Note 46]. J.- Christophe Romer and Michel DeSolère, “Accords conclus par les pays socialistes européens avec les pays en voie de développement,” in Judet, Transfert de technologie et développement, pp. 341–79.

[Note 47]. Sanjaya Lall, “The Patent System and the Transfer of Technology to Less-Developed Countries,” Journal of World Trade Law 10, 1 (January–February 1976), pp. 1–16.

[Note 48]. UNCTAD, “Major Issues Arising from the Transfer of Technology: A Case Study of Sri Lanka,” TD/B/C.6/6 (7 October 1975), discusses the problems that can result from the transfer of technology from a socialist country to a developing country.

[ page 136 ]

[Note 49]. Jerzy Klerr [Kleer] and Lech Zacher, “Technology Transfer from CMEA Countries to the Third World,” in Ervin Laszlo and Joel Kurtzman, eds., Eastern Europe and the New International Economic Order: Representative Samples of Socialist Perspectives (Elmsford, N.Y.: Pergamon, 1980), p. 26.

[ page 137 ]

[Note 50]. The relations between multilateralization and convertibility are summarized in Harriet Matejka, “Convertibility in East Europe,” Annales d’études internationales 5 (1974), pp. 179–85. An intriguing Hungarian opinion is presented by Katalin Botos, “On the Further Development of the Currency and Financial System of the CMEA,” Soviet Studies 34, 2 (April 1982), pp. 228–53.

[Note 51]. For a balance-sheet of LDC demands addressed to the Group D countries in 1976 and replies see Despiney, “Pays socialistes,” pp. 116–17.

[Note 52]. For a review of this program, see UNCTAD, “Tripartite Industrial Cooperation and Cooperation in Third Countries,” TD/243/Supp.5 (20 April 1979). Some interesting, more general meditations on the subject may be found in Leon Zurawicki, Multinational Enterprises in the West and East (Alphen aan den Rijn: Sijthoff & Noordhoff, 1979), chap. 6.

[ page 138 ]

[Note 53]. Relevant citations may be found in Dessemontet, “Transfer of Technology,” p. 2, n. 6.

[Note 54]. See also Karl Hermann Fink, “L’arbitrage socialiste dans le commerce Est-Ouest,” Droit et pratique du commerce international 1, 3 (September I 975), pp. 367–81; Jerzy Rajski, “Basic Principles of International Trade Law of Certain European Socialist States and of East–West Trade Relations,” ibid., 4, 1 (April 1978), pp. 9–28.

[ page 139 ]

[Note 55]. G. [I.] Morozov, “Mezhdunarodnoe pravo i mezhdunarodnye otnosheniia” [international Law and International Relations], Mirovaia ekonomika i mezhdunarodnye otnosheniia, June 1975, pp. 46–51, at pp. 50–51; Morozov, “O prave mezhdunarodnykh organizatsii” [Concerning the Law of International Organizations], Sovetskoe gosudarstvo i pravo, May 1972, pp. 56, 60–64; Morozov, Mezhdunarodnye organizatsii: nekotorye voprosy teorii [International Organizations: Some Problems of Theory], 2d ed. (Moscow: “Mysl′,” 1974), pp. 27–87.

[Note 56]. These diverse conceptions hinder the extension of commercial relations between the EEC and the CMEA. The question, political as well as legal, of the CMEA’s competence to negotiate trade agreements in the name of its members, or to oversee their foreign trade, is fundamental. Articles on this question by experts from the CMEA countries, from the point of view of institutions and law, include: Henryk De Fiumel, “The Council for Mutual Economic Assistance in International Relations,” Studies on International Relations 7 (1976), pp. 68–77; Jerzy Rajski, “Rozwój miedzynarodwych stosunków umownych RWPG z panstwami trzecimi” [The Development of the CMEA’s International Contractual Relations with Third Countries], Panstwo i pravo 31, 7 (July 1976), pp. 40–51; and Tamas Sárközy, “A KGST-országok nemzetközi gazdálkodó szervezetei intézményi rendszeréröl” [On the Institutional System of International Trading Organizations in CMEA Member-Countries], Gazdasag11, 3 (September 1977), pp. 93–106. Western-language summaries accompany the last two articles.
     A good Western review that includes these factors in the context of the current political and economic situation is Max Baumer and Hanns-Dieter Jacobsen, “EC and COMECON: Intricate Negotiations between the Two Integration Systems in Europe,” in Werner J. Feld, ed., Western Europe’s Global Reach: Regional Cooperation and Worldwide Aspirations (Elmsford, N.Y.: Pergamon, 1980), pp. 11–24.

[ page 140 ]

[Note 57]. UNCTAD, Resolutions and Decisions, TD/B/71 (August 1966).

[ page 141 ]

[Note 58]. Stephen D. Krasner, “Structural Causes and Regime Consequences: Regimes as Intervening Variables,” International Organization 36, 2 (Spring 1982), pp. 185–206.

[Note 59]. U.N. General Assembly, Official Records, A/C.6/SR.959 (2 October 1967).

[Note 60]. One example is the influence of the CMEA General Conditions of Delivery of Goods (1968) on the UNCTAD negotiations concerning multimodal transport.

[Note 61]. The growing importance of forums such as UNCTAD in the eyes of the socialist countries of Eastern Europe is highlighted by an editorial of the Soviet journal authoritative in legal matters. It recommended the “deeper study, from the point of view of international law, of the problems and questions” raised by multilateral diplomacy, particularly “the method of ‘consensus,’ which is relatively new but ever more widely adopted.” “Mir i sotrudnichestvo—trebovanie epokhi” [The Age Demands Peace and Cooperation], Sovetskoe gosudarstvo i pravo, September 1973, p. 7. This method was so new and strange that the word “consensus” in the original text was enclosed within quotation marks and followed in parentheses, by way of explanation, by the Russian word for “agreement” (soglasovanie).

[ page 142 ]

[Note 62]. M. M. Kostecki notes that “surprising little has been written by economists and other researchers on state trading in … the developing countries.” See his “State Trading in Industrialized and Developing Countries,” Journal of World Trade Law 12, 3 (May–June 1978), pp. 187–207; quotation at p. 207.

[Note 63]. Krasner, “Structural Causes,” pp. 194–204.

Dr. Robert M. Cutler [ website — email ] was educated at MIT and The University of Michigan, where he earned a Ph.D. in Political Science, and has specialized and consulted in the international affairs of Europe, Russia, and Eurasia since the late 1970s. He has held research and teaching positions at major universities in the United States, Canada, France, Switzerland, and Russia, and contributed to leading policy reviews and academic journals as well as the print and electronic mass media in three languages.

 
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