UNCTAD: UN Conference on Trade & Development

Committee Overview:

Following the events of World War II, the rapid decolonization of colonial empires around the world led to a swell of brand-new countries that were welcomed to the United Nations. Furthermore, the growing rivalry between the two Cold War powers and the high cost of allying with either led to the establishment of the Non-Aligned Movement (NAM). Many of the states that were part of the NAM were newly independent and still developing post-colonial countries. This group of developing countries then moved to establish the Conference on Problems for Developing Countries, held in Cairo in 1962, at which they called for an “international conference within the framework of the UN on all vital questions related to international trade, primary commodity trade and economic relations between developing and developed countries.” The consensus reached at this conference resulted in the first meeting of the United Nations Conference on Trade and Development (UNCTAD) in Geneva, Switzerland in 1964.

Topic A: Reducing Offshore Capital (Capital Flight) in African Countries

Capital flight is defined as unrecorded and illicit outflows of capital from a country. It is measured by discrepancies between recorded inflows of foreign exchange and recorded uses of these resources. In Africa, the UN estimates that the loss from capital flight is USD 50 billion annually. This is approximately twice the total development assistance that Africa receives each year and the annual payments on international debt. However, this number may still underestimate the magnitude of the problem due to a lack of accurate data. Capital flight prevents African countries from improving their internal economy or paying off debts, impairing development efforts across the continent. Capital flight is a much more prominent issue in Africa than elsewhere, as a result of low compliance checks, a lack of transparency on the part of African banks, and complicit officials and politicians who often benefit from capital flight. This problem is also addressed directly by SDG 16: Peace, Justice and Strong Institutions, which has Target 16.4: “to significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime.” Capital flight can only be solved once all parties—African and Western—actively work towards a common solution.

Topic B: The Effects of Increasing Protectionism in Global Trade

“Trade wars” have been capturing global headlines in recent years, particularly as tensions increase between China and the United States. Trade wars often stem from increased protectionism. Protectionism is a trade policy that heavily taxes imported goods to protect domestic industries and limit dependence on foreign trade. This protectionist agenda, achieved through the imposition of tariffs, quotas, and other restrictive trade policies, has the potential to alienate former economic allies and to place ever-increasing pressure on emerging economies to become self-sustaining or find other, more stable opportunities for growth. Trade wars can also have civilian implications, as they may reduce public access to food, medicines, and pharmaceuticals, natural resources, and sources of energy. In societies that are already fragile, these trade restrictions could cause a humanitarian crisis related to nutrition, healthcare, minimum standards of living, and more. Trade wars also can pose a threat to the owners, operators, and employees of small- and medium-sized enterprises, which will be less capable of surviving dramatic price changes in the goods that they need to operate. Given rapidly declining trade relationships around the world, it is crucial that members of the international community work together to determine the optimal future for stable and productive economic collaboration, interdependence, and global trade.