Trade: When Poor Meets Rich

There is an old Middle Eastern story about the beggar who boasts in the bazaar that he is going to marry the sultan's daughter. "I've decided to do it, and I have my parents' consent," said he. "All I have to do now is get her agreement—and the sultan's."

That tale was wagged around the corridors of Geneva's Palais des Nations last week, as the first great confrontation of the world's rich and poor nations reached its final hours. For three months at the U.N. Conference on Trade and Development, 75 underdeveloped nations squared off against 29 industrialized nations, which had been shotgunned into the meeting in the first place. At issue was how to improve the poorer nations' dwindling share of world trade. The underdeveloped bloc came up with a list of extravagant demands that would boggle even a sultan: preferential tariff treatment for their manufactured goods, abolition of all barriers against their raw material exports, high fixed commodity prices. Predictably, the wealthy nations did not buy.

North v. South. By sheer weight of numbers, the underdeveloped nations got their way in the endless committee meetings. But the resolutions meant little without the backing of the industrial nations that carry on 80% of the world's trade. Working against the June 15 adjournment deadline, the conference's president, Egypt's Deputy Premier Abdel Moneim El-kaissouni, and secretary general, Argentine Economist Raul Prebisch, used their skills as suave fixers ,to salvage some things. The industrial nations' delegates made several soft compromises. By supporting proposals to reconvene the trade meeting every three years and to set up a small secretariat at Geneva, they moved toward creating what someday could become a new trading organization for the world. They also agreed to "recommend" that the World Bank grant loans to countries that suffer from commodity-price declines, and that the industrial nations set a foreign aid goal of 1% of their "national income," that is, the sum of their personal income and corporate profits.-

More important was the fact that the underdeveloped nations moved toward creating a new alliance—along economic, not ideological lines. Though they bickered among themselves, they held fairly firm against the richer lands, both free and Communist. Said U.S. Delegate Richard N. Gardiner: "This is the first major international conference in which the East-West confrontation has been submerged by the North-South divisions."

Get that GATT. Failure of the U.N. conference to produce a quick cure for trade deficits only strengthened the 62-nation General Agreement on Tariffs and Trade (GATT), the single permanent machinery for lowering barriers and expanding trade. GATT carries the hopes of industrial nations for freer trade, but is by no means ignoring less developed ones. In the continuing "Kennedy Round" of negotiations, GATT ministers aim for 50% across-the-board tariff cuts that would be extended to underdeveloped countries on a nonreciprocal basis.