Though external trade is of great importance to New Zealand, the country is not powerful enough economically to be able to bargain strongly to protect its interests in overseas markets. It therefore seeks to rely as much as possible on the economic security offered by international agreement and cooperation to supplement the traditional security of its close economic ties with Britain.
The international trade agencies concerned originate in the Charter of the United Nations signed at San Francisco on 26 June 1945. The Preamble to the Charter expresses the determination of the peoples of the United Nations to promote, among other things, social progress and better standards of life, and to that end to employ international machinery for the promotion of the economic and social advancement of all peoples.
The Economic and Social Council (subject only to the overriding authority of the General Assembly) is responsible for trying to fulfil these aims. It is one of the six main organs of the United Nations. It is responsible under the General Assembly for directing and coordinating the policies and programmes of the United Nations in economic, social, and cultural fields. Its purposes are more specifically defined as the promotion of (a) higher standards of living, full employment, and conditions of economic and social progress and development; (b) solutions of international economic, social, health, and related problems; and (c) international, cultural, and educational cooperation; and universal respect for, and observance of, human rights and fundamental freedoms for all without distinction of race, sex, language, or religion. The Council has a wide potential field of activity. It has been called upon to develop and coordinate an increasing variety of economic and social works.
New Zealand has supported ECOSOC in its work of supervising, directing, and coordinating the economic developmental programmes of the United Nations and its related agencies. Many of these programmes are affected by the state of world trade. Trade problems are therefore a focal point in the deliberations of bodies subsidiary to ECOSOC or those connected with the United Nations which have responsibility for international economic matters.
The Council comprises 18 members elected by the General Assembly, six of whom are elected each year for a three-year term. New Zealand's second consecutive term expired at the end of 1961, and the representative of New Zealand to the United Nations was elected President of the Council for 1961. In expressing appreciation of this honour the New Zealand representative referred to the fact that, since the United Nations began, New Zealand has been “particularly conscious of the unique contribution which international cooperation in the economic and social fields can make to the attainment of world peace and security”.
New Zealand's trade policies depend on the principles of GATT. GATT is unusual in that it was intended to be a temporary substitute for a permanent international trade organisation (ITO). On 18 February 1946 ECOSOC decided to call an international conference on trade and employment and set up a preparatory committee to draft a preliminary agenda and a charter for an international trade organisation. While the charter was being prepared, members of the preparatory committee decided to proceed with tariff negotiations among themselves instead of waiting for ITO to come into existence. The tariff negotiations were held at Geneva from 10 April 1947 to 30 October 1947, when the participants signed a final Act which authenticated the text of GATT. The charter for ITO, which later received consideration by member States, failed to secure the required number of ratifications and can be regarded as defunct.
New Zealand was one of the original contracting parties to GATT. The articles of the Agreement reflect the international trading experience of the participating countries in the years before the Second World War. After the gold standard was abandoned in the early 1930s conditions of international trade were exceptionally unstable. Countries vied to depreciate their exchange rates, bilateral trading and finance agreements became common, many exchange restrictions were imposed, some so stringent as to enforce the spending of export earnings in the country blocking exchange. The GATT nations were naturally anxious to have mutually advantageous rules and principles instead of the former trade chaos.
GATT aims broadly to raise living standards, to promote high levels of employment, to develop the world's resources, and to expand trade. The members undertake to use the Agreement to reduce trade barriers and to cut out discrimination in international commerce. But New Zealand's experience shows that tariff concessions negotiated in GATT are often frustrated by industrial countries' maintenance or imposition of quantitative restrictions on imports of agricultural products. It seems that nations find it harder to bring about changes in the pattern of their agricultural production than in the pattern of their industrial production. For that reason, dismantling of various forms of restriction of trade in agricultural products has been slower than for industrial products. Nevertheless, New Zealand continues to regard GATT as a forum for promoting the cause of liberal trade policies.
A conference on food and agriculture, which met in May 1943 in Hot Springs, Virginia, U.S.A., set up an interim commission to make plans for a permanent Food and Agriculture Organisation. The interim commission prepared a draft constitution. After this had been accepted by more than 20 governments FAO came into being on 16 October 1945. FAO has a threefold aim: to raise levels of nutrition and standards of living of the peoples of the world; to improve the efficiency of the production and distribution of all food and agricultural products; and to improve the condition of rural peoples. Because half the people in the world are undernourished or badly fed, the work of FAO is widely supported and is considered most important by many nations with deficient or ill developed agricultural resources.
In the course of its work in the less developed countries FAO has noted the problems of unstable markets for agricultural produce. Most of these countries depend on exports of primary (mainly agricultural) produce for much of their foreign exchange. Market instability therefore hinders their orderly economic growth; and without orderly growth they find it most difficult to change agricultural patterns in a way which would increase productivity and thus raise standards of living.
New Zealand has been represented at each of the 13 FAO conferences held to date and has been elected on several occasions to membership of the FAO Council which is responsible for the oversight of the Organisation between the biennial conferences.
In 1947 FAO set up a Committee on Commodity Problems (CCP), as a standing committee of its council. New Zealand has taken a close interest in the work of this Committee, and has been an elected member since 1955. Much valuable work has been done by commodity groups established by CCP for the study of problems of the production, marketing, grading, and trade in individual agricultural commodities. CCP has also set out guiding principles for formulating and administering policies of price stabilisation, support, and disposal of agricultural surpluses.
Some countries have accumulated large surpluses which, if released on the world markets, could severely damage the export trades of the primary-producing countries, including those of some of the underdeveloped countries which export soft grains. This threat to normal trade in agricultural products was so great that in 1954 CCP established a Consultative Subcommittee on Surplus Disposal (CSD), which meets about once a month in Washington D.C. New Zealand has taken a leading part in the deliberations of CSD. The Committee enables countries to cooperate in the matter of surplus disposals to reduce any possible damage to their international trade.
The work of both committees will probably grow in importance as the General Assembly of the United Nations becomes more acutely aware of the need for measures to divert the surplus production of industrial countries to quicker production and alleviate the desperate want in the less developed countries. Both committees have made and still can make useful contributions to any new scheme initiated in the General Assembly. New Zealand hopes to continue to play its part in both these FAO committees.
The Economic and Social Council of the United Nations found that several economic problems could best be dealt with regionally, It decided, therefore, to set up regional economic commissions, comprising members of the United Nations in the areas concerned and other members having special interest in those areas. Non-member States and territories of the regions may be elected as associate members. Economic commissions have been established for Europe, for Latin America, for Africa, and for Asia and the Far East. New Zealand's regional interest lies in the last commission. ECAFE was set up in 1947 and has developed a series of subsidiary bodies, including a Committee on Trade and a Committee on Industry and Natural Resources. The deliberations and findings of these committees could affect New Zealand's trade interests in the region. New Zealand therefore takes part in their work. For though New Zealand's economy differs greatly from that of some of its regional neighbours it shares with them a dependence on export trade to earn foreign exchange. This supreme importance of trade enables New Zealand to do specially useful work in ECAFE by attempting to remove barriers to the free trade in primary products in collaboration with its neighbours.
The value of the trade of the less developed countries is eight times greater than total aid given them. As direct aid can often be wiped out in a bad trading period, they consider it important that attempts be made to ease trade in primary products. New Zealand aims to cooperate with its regional neighbours in ECAFE in their efforts to raise their standards of living by faster economic growth based on expanding international trade.
The twenty-first ECAFE Conference was held in Wellington in 1965.
The United Nations Conference on Trade and Development held in Geneva in 1964 was the culmination of a long period of preparation and of pressure by the poorer nations of the world for international recognition of their economic problems and of the relationship between trade and economic development. The genesis of the Conference is complex. It reflects, among other things, an obvious change in world economic and political contexts since the Second World War, and a shift in thinking about the handling of human and material resources; hence the difference in names of the last world economic conference in Havana in 1948 – the United Nations Conference on Trade and Employment – and the 1964 Geneva meeting.
One hundred and twenty countries, including New Zealand, were represented at the Conference. They faced an ambitious programme of wide scope, covering trade and shipping matters, the coordination of trade and aid policies, and the drawing up of general principles for the expansion of international trade.
The examination and identification of fundamental trading and economic issues became the basic task of the Conference. In clear-cut political terms this issue emerged as the transfer of resources from rich countries to poor countries; but the inevitable confrontation between industrialised and developing countries did lead ultimately to certain limited compromise agreements.
In view of the complexity of the issues, the size of the Conference and the difficulties in preparing adequately for it, it is not surprising that only limited progress in trade and economic matters was achieved. Nevertheless important recommendations were agreed that would enable the work started by the Conference to proceed. These included the establishment of the Conference as a continuing organ of the United Nations General Assembly (to be convened at intervals of not more than three years) and the setting up of a representative 55 nation Trade and Development Board. These recommendations were adopted by the General Assembly.
New Zealand was elected to the Trade and Development Board and is a member also of committees established by the Board to carry out studies and make recommendations on questions of international commodity trade and shipping.
by John Joseph Bryant, B.A., Trade Officer, Department of Industries and Commerce, Wellington.