CHANGE AND THE NEW INTERNATIONAL ECONOMIC ORDER

CHANGE AND THE NEW INTERNATIONAL ECONOMIC ORDER

TILBURG STUDIES IN ECONOMICS 20

CHANGE AND THE NEW INTERNATIONAL ECONOMIC ORDER JAN A. VAN LITH Editor Tilburg School of Economics, Social Sciences and Law The Netherlands Springer-Science+ Business Media, B. V.

Library of Congress Cataloging in Publication Data Main entry under title: Change and the new international economic order. (Tilburg studies in economics; v. 20) "Published under the auspices of the Department of Economics, University of Tilburg." 1. International economic relations-addresses, essays, lectures. 1. Lith, Jan A. van. II. Katholieke Hogeschool. Economisch Instituut. III. Series. HF1411.C4163 382.1 79-22888 ISBN 978-94-017-1013-8 ISBN 978-94-017-1011-4 (ebook) DOI 10.1007/978-94-017-1011-4 Copyright 1979 by Springer Science+Business Media Oordrecht Originally published by Martinus Nijhoff Publishing in 1979 Softcover reprint of the hardcover 1 st edition 1979 No part of this book may be reproduced in any form by print, photoprint, microfilm or any other means, without written permission from the publisher.

PREFACE In the academic year 1977-1978 Tilburg University celebrated its fiftieth anniversary. The commemoration involved specific scientific activities. The theme of 'Innovation', broadly defined as 'developments in sciences and society', offered the scientific framework in which these activities took olace. The present volume is one of the results. It consists of the texts of a series of lectures held at the Department of Economics of Tilburg University. The Department's Colloquium Committee, set up to organize discussions on current research, arranged the lectures. On this occasion, the committee decided to draw attention to the multidisciplinary character of research in the area of NIEO, the New International Economic Order. The collection of papers that eventually resulted is published in this volume. - Gratitude is owed to the people, thanks to whom this volume could be published: to Mr. Ad Janssen, head of the Office of the Department of Economics for offering the secretarial facilities needed to 'process' the book, despite an understaffed office already facing excessive work; to the 'Fifty Years Tilburg University' Committee for creating the financial ways and means; to Mr. Jan Vingerhoets of the Development Research Institute of Tilburg University for his most valuable advice and help; to Mr. McGivern who gave the book its final form in English. Thanks also are due to Mr. Hans Sinner, responsible for Tilburg University Press; to Mr. van Vloten, publisher, Martinus Nijhoff, and to Mrs. Hinkenkemper, Miss Annelies Vugs and Dr. George Embree. Especially, gratitude is due to Miss Nanda Boers who, entirely voluntarily, offered assistance, and to Mrs. Gonny de Rooij Smits from the Department of Economics. Together they orepared the camera-ready copy for the book. Their enthusiasm and efficiency helped the publication along substantially. The book is published under the auspices of the Department of Economics, University of Tilburg. The editor is a member of the Department's Colloquium Committee. Tilburg, October, 1978. v

TABLE OF CONTENTS PREFACE v ABOUT THE AUTHORS LIST OF ABBREVIATIONS INTRODUCTION X vii viii 1 The Changing Structure of the International Economic Legal Order 1 Pieter VerLoren van Themaat 2 Economic Self-Determination and Human Rights: Some Remarks 26 Gert-Jan Veerman and Pau1ien van der Ploeg-van Oort 3 Specific Tensions in the Relationship between Multinational Enterprises and Developing Countries 46 Sylvain R. P1asschaert 4 Labour Unions and the NIEO Programme. Some Remarks on the Position of Labour in Industrialised Countries 74 Kurt P. Tudyka 5 International Industrial Relocation. Some Factors of Change 88 Ben H. Evers 6 World Food Problems and the New International Economic Order 107 Antoine J. Groosman 7 Primary Commodities and the New International Economic Order 131 Wouter Tims 8 The North-South Dialogue: Another Confrontation or a Basis for a New International Economic Order? 150 Edmund P. We11enstein vi

ABOUT THE AUTHORS 1. Pieter VerLoren van Themaat, Professor of economic law at the University of Utrecht. 2. Gert-Jan Veerman, Home Office, Department of Constitutional Affairs; Paulien van der Ploeg, Legal Advisor of the Dutch Labour Party in the 'Provincia Ie Staten'. 3. Sylvain R. Plasschaert, Professor at the University Faculties St. Ignatius of the University of Antwerp; visiting professor at the University of Leuven and the College of Europe, Bruges. 4. Kurt P. Tudyka, Professor of political science and international relations at the Catholic University of Nijmegen. 5. Ben H. Evers, Director Development Research Institute, Tilburg University. 6. Antoine J. Groosman, Research Fellow at the Development Research Institute of Tilburg University. 7. wouter Tims, Professor at the Free University of Amsterdam and director of the Centre for World Food Studies, Free University, Amsterdam. 8. Edmund P. Wellenstein, Former Director-General External Relations of the European Communities. vii

LIST OF ABBREVIATIONS CIEC COMECON DC EEC FAO FDI GATT IAEA IBRD ICFTU IEA IFAD ILO IMF LDC LLDC CONFERENCE ON INTERNATIONAL ECONOMIC CO-OPERATION COUNCIL FOR MUTUAL ECONOMIC AID DEVELOPED COUNTRY EUROPEAN ECONOMIC COMMUNITY FOOD AND AGRICULTURAL ORGANIZATION FOREIGN DIRECT INVESTMENT GENERAL AGREEMENT ON TARIFFS AND TRADE INTERNATIONAL ATOMIC ENERGY AGENCY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS INTERNATIONAL ENERGY AGENCY INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT INTERNATIONAL LABOUR ORGANIZATION INTERNATIONAL MONETARY FUND LESS DEVELOPED COUNTRY LEAST DEVELOPED COUNTRY MNE MULTINATIONAL ENTERPRISE MSA-cQuntries = MOST SERIOUSLY AFFECTED COUNTRIES OECD OEEC OPEC SELA SITC UN UNCTAD ORGANIZ'ATION FOR ECONOMIC CO-OPERATION AND DEVELOP MENT ORGANIZATION FOR EUROPEAN ECONOMIC CO-OPERATION ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES LATIN AMERICAN ECONOMIC SYSTEM (SISTEMA ECONOMICO LATINOAMERICANO) STANDARD INTERNATIONAL TRADE CLASSIFICATION UNITED NATIONS UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT viii

LIST OF ABBREVIATIONS ix UNDP UNEP UNESCO UNIDO UNRISD USDA WFC WHO UNITED NATIONS DEVELOPMENT PROGRPMME UNITED NATIONS ENVIRONMENT PROGRAMME UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION UNITED NATIONS RESEARCH INSTITUTE FOR SOCIAL DEVELOP MENT UNITED STATES DEPARTMENT OF AGRICULTURE WORLD FOOD COUNCIL WORLD HEALTH ORGANIZATION

INTRODUCTION It is a tradition in the Department of Economics of Tilburg University to organize general discussions on current research for the Department's entire academic staff. Thus researchers are given the opportunity to present their research and staffmembers are enabled to exchange view on research directly or indirectly related to their field of interest. Within the wide range of subjects offered the general set-up is to combine the 'supply' of current research with the 'demand' of interested Department staffmembers. The resulting 'output' is a more or less chaotic series of research discussions on completely unrelated subjects. At the commemoration of Tilburg University's fiftieth anniversary, this tradition was slightly altered by setting a theme for these discussions. For the jubilee year was graced by special scientific activities within a theme chosen for the occasion, namely 'Innovation'. The Department's general discussions on research were put within this 'scientific framework' and attention was focussed on what was broadly defined as 'the innovative aspects of the so-called New International Economic Order'. Within the given parameters of time, money and indicated interests, attention was called to the multidimensional character of current NIEO research. As is clearly reflected in the composition of this volume, it was neither the intention, nor was it possible in the given set-up, to organize discussions in a more coherent way. An attempt made in this volume to make a classification of the research discussed, resulted in a division into three groups of papers: the legal aspects of the NIEO [Chapters land 2]; aspects related to, broadly speaking, industry and labour [Chapters 3, 4 and 5]; commodities and agriculture in the NIEO [Chapters 6 and 7]. Chapter 8, finally, is a paper apart in the sense that it is not only the result of research but also an analysis of the North-South Dialogue by an important participant in the Paris Conference. As said, the general research discussions of the Department of Economics are set up to present scientists and their research activities to the Department's staff. Accordingly, it should be considered an omission not to introduce the authors to the reader. Following is such a chapterwise introduction. In Chapter 1 international economic law research is presented. This research focusses on the specific legal problems with which a developing NIEO will be confronted. An important part of the research is the attempted development of a general theory of international economic organizations. A series of studies has already been published by this research group, which is composed of lawyers from the universities of Utrecht and Leiden. In this contribution to the volume, Professor Verloren van Themaat, the project-manager and general-editor of the research, summarizes the methods and provisional results. Dr. Veerman, in Chapter 2, deals with economic self-determination. In his book 'Self-determination and Human Rights' (Het Zelfbeschikkingsrecht der Naties en de Rechten van de x

INTRODUCTION xi Mens), published in 1977, Veerman analyzed the concept of political self-determination in international law. The very personal and interesting vision developed in this book constitutes the basis for analysis here of economic self-determination. Together with co-author Paulien van der Ploeg, who wrote a paper about the NIEO, he has also published a book on human rights and law for use by members of Amnesty International (Een Recht, Twee Averecht). In the author's conception economic self-determination is the pendant of the political self-determination. Starting from article 1.2 of the Covenants on Human Rights (1966), Veerman goes into the meaning of his concept of economic self-determination. Professor Plasschaert did extensive research in the Third World Center (Centrum Derde Wereld), the University Development-Research Institute in Antwerp. He is a former official and consultant of the IBRD (the World Bank). From 1972-1977 Professor Plasschaert was Director of the Third World Center. His main interests in development research are related to aspects of fiscal policy, the MNE and the international monetary system. In Chapter 3 he analyses the specific tensions as they exist in the relationship between MNE and LDC's. Professor Tudyka, author of Chapter 4, is Chairman of the Center of Peace Research of the Institute of Political Science of the University of Nijmegen, and head of the Institute's 'International Relations' section. The extensive research done at these centers, during the last years has concentrated mainlyon the international activity of labour unions, especially their policy towards MNE and related problems. In his 'Labour Unions and the NIEO', Tudyka describes what he considers their negative perception of international economic relations. He outlines and comments on the labour unions' proposals for a new policy for the developing and industrialised countries and concludes with the role and functions labour unions see for themselves with respect to the NIEO. Chapter 5 is based on work done by a research group on 'Industrial Re-adjustment and the International Division of Labour'. This group is composed of researchers from the Development Research Institute of Tilburg University. Evers, the author of Chapter 5, directs the Institute, and this research. The aim is to analyse causes and effects of the changes taking place in the international division of labour. The analysis focusses on the effects for both developing and industrialised countries, in particular with regard to trade in manufactured products. The research is meant to provide assessment elements for formulating a more efficient anticipatory industrial readjustment policy which takes into account the interests of developing countries and of the Netherlands as adequately as possible. In his contribution in Chapter 6, Groosman analyses world food production and trade. A description is given of past, current and expected trends and the U.N. strategy in the establishment of a NIEO is analyzed. Groosman's effort is aimed at outlining the future role of the agriculture of Third World countries in what he calls an 'international framework'. Groosman's

xii INTRODUCTION contribution is based on research in the field of international trade in food and agricultural requisites. The author, Research Fellow at the Tilburg Development Research Institute, has published works on the international structure and organization of the world fertilizer industry and on trade relations between developed and developing countries in the field of agricultural requisites. Professor Tims, former Director of the Economic Analysis and Projections Department of the World Bank, is now Director of the Center for World Food Market Studies of the Free University of Amsterdam. Under his supervision a project-group on the 'World Food Problem' is conducting research into the longterm pattern of agricultural development and food supply, with emphasis on alternative national and international policy plans. In this research attention is paid to the determinants and effects of income distribution and distribution of power within the countries concerned. In Chapter 7, on 'Primary Commodities and the NIEO', Professor Tims analyses the role of primary commodities in world trade and their significance for developing countries. He discusses present policy proposals and possible alternatives on the basis of the analysis made. Chapter 8 is the contribution of the former Director-General, External Relations, of the European Economic Communities, Dr. Wellenstein, author of the well-known report on the NIEO to the Dutch Society for International Law. Wellenstein, an insider in the EEC negotiating system, headed the negotiations on British entry into the EEC and, as EEC representative and Co-chairman of the Development Commission of CIEC, participated in the CIEC talks held in Paris between December,1975 and June, 1977. Given his insights and experience, Dr. Wellenstein was invited to elaborate on the question of whether, in his view, the North-South Dialogue was just another confrontation or a starting point for a new NIEO. At the end of each chapter is a reference section containing a selection of works suggested by the author for further study.