The UN and Global Political Economy: Trade, Finance, and Development

1. The UN Trade and Development Debates of the 1940s

17 1 The UN Trade and Development Debates of the 1940s • The Pursuit of Multilateralism • The Lessons of the Interwar Years • Planning for the United Nations • An International Commercial Union • A UN Economic and Social Council • The Idea of Underdevelopment • Initial Dissent by Developing Countries • Emerging Issues of Trade and Employment • G. C. S. Corea on Protection • Continuing Controversy on the Right to Protect • Prebisch’s Later View of the 1940s Debate • Conclusion The Pursuit of Multilateralism In June 1942, U.S. vice president Henry A. Wallace sat next to Soviet foreign minister Vyacheslav Molotov at a reception at the Soviet embassy in Washington.The conversation turned to postwar problems. Molotov,Wallace recorded, “realizes that Russia cannot have the enduring peace which she requires to develop her territory unless there is economic justice elsewhere in the world.” Wallace, for his part, “thought one of the great problems of the postwar world was to bring about a rapid industrialization and improvement in nutrition in India, China, Siberia and Latin America.” Molotov “agreed completely and felt that there was a - or a -year job in developing these areas and that the job should be done by the United Nations together. No one nation could do it by itself. . . . He was very enthusiastic about the way in which the United Nations could cooperate to develop the so-called backward 18 The UN and Global Political Economy areas of the world which have not yet been industrialized.”1 Although it is possible to question Molotov’s sincerity, and Wallace’s realism, this talk was illustrative of some conceptions which were widely held at the time—that the establishment of economic order and justice was a precondition of peace and that the United Nations could help achieve this by promoting economic development .These conceptions in due course had a vital impact upon the form of the UN Charter, which was agreed upon at the San Francisco conference in .2 What, then, were the intellectual bases for these suppositions? How did they influence the creation of the UN and its specialized agencies? And what consequences did they have for the UN’s approaches to trade, finance, and development questions in the first crucial years of its existence? The economic aspects of the UN system as it was designed were, with important caveats, broadly based on an American blueprint (albeit with significant British input). The central principle behind this blueprint was that just as collective action was necessary to maintain security in the military sphere, so nations needed to work together to solve the international economic, social ,and humanitarian problems which themselves tended to undermine world peace.3 The fundamental causes of these problems, it was believed, could be eradicated by the creation of a world economy based on multilateral nondiscriminatory trade and payments regimes. This in turn would facilitate a high degree of international economic specialization,unleashing forces that would help develop“backward”countries, thus increasing the prosperity both of the world as a whole and of all its constituent national parts.4 However,American postwar planners’ concomitant belief in procedural multilateralism—that is, that the form and purposes of multilateral institutions should be arrived at by international negotiation between prospective member countries—also had the potential to undermine the implementation of these principles. In other words, the processes of negotiation might force the United States into compromises, which subverted the purposes for which she had entered negotiations in the first place.5 This chapter will suggest that such compromises did in fact take place. First, it will examine the thinking that lay behind American and Allied planning for the United Nations and the extent to which this thinking was reflected (and/or modified) in the eventual UN Charter.Second,it will investigate the ways in which, in the immediate postwar years, these precepts were, to differing degrees, perpetuated and challenged within UN fora, in particular during the trade negotiations conducted at Geneva and Havana in –. In so doing, it will address the question of whether or not the proposed moves toward freer trade on a nondiscriminatory basis were consistent with the aspirations of poor agricultural countries to economic development. It will be The UN Trade and Development Debates of the 1940s 19 argued that procedural multilateralism under UN auspices did permit underdeveloped countries to challenge, with a degree of success, the dominant affirmative response to this question. This was a harbinger of further...