WORLD TRADE CONFERENCE
By Fernand Charlier
"He discovered in short that in the final analysis
what destroys the beauties and innate harmonies of capi-
talist production is commerce! Another step, and he will
perhaps discover that the real drawback in capitalist
production is capital itself." -- Karl Marx(1)
The World Conference on Trade and Development opened March 23 at Geneva, bringing together for twelve weeks, under the auspices of the United Nations, some 1,500 delegates and observers from 123 coun-
(I)karl Marx: Apropos the "vulgar" American economist H. Carey -precursor among other things of the theory of the relation between wages and productivity. In Le Capital, Livre I, t.2, p.234. (Hditions sociales, Paris, 1948.) [We are retaining the author's original French citations; and, since we lack easy access to the standard. Eng~ lish translations, we are offering our own. Publications that use this article, especially if they translate it into other languages, toe t check. our translations: against | the standard sources, ~~ din tor. a
tries and international organizations, The assembly is a consequence of the rise of the colonial revolution and the winning of at least political independence by a large number of former’ colonies, These governments supported the proposal made by the Soviet Union to hold such a conference, They wish, in fact, to discuss the principles and methods utilized in world trade.
The USSR, which stands only sixth in world trade, is seeking to improve its position, The fact is that the Soviet Union does not export more than three per cent of its domestic production, With this aim in mind, the Soviet government is demanding an end to the discriminatory practices of the imperialist powers.
The problem faced by the semicolonial countries, politically independent to various degrees, is to recuperate part of the solon= ial super profits, particularly commercial super profits, to benefit | their national economy,
This is the origin of such super profits, as explained by Marx: "Capital invested in foreign trade is able to yield a higher rate of profit because first of all they enter into competition with countries whose means of commodity production are lower, so that the more advanced country sells its commodities above their value, al-. —~ though it offers them at a lower price than competing countries, To the degree that the labor of the more developed country is utilized as labor of higher specific weight, the rate of profit increases; the labor which is not paid as labor of superior quality being sold as such, The same situation can occur vis-a-vis countries where commodities are shipped and from which they.are received; the latter furnishing more materialized labor in natura [in kina] than it receives in return and yet obtaining commodities at a lower price than would be possible if it produced them, It is quite like the manufacturer who, utilizing a new invention before it has become widespread, sells at a lower price than his competitors and nevertheless above the individual value of his commodities; that is, utilizing like surplus labor the specifically superior productivity of an ype which he employs. He realizes a kind of super profit."(2
Marx therefore placed this aspect of foreign trade among the causes that counteract the law according to-which the rate of profit tends to. fall. oo ee oo we
Besides this phenomenon -~ a simple result of the law of value -- the underdeveloped countries are deprived of'a part of their possibilities of development by the unfavorable evolution of the terms of exchange; in other words by the "scissors" phenomenon, or again by the. fact that the prices of raw materials which they
“)Karl Marx: (Editions sociales,
Le Capital, Livre III, t.l, p.250. Paris, 1957,
export drop, while the industrial products which they import increase, This phenomenon is called the “Prebisch effect," from the name of the Secretary General of the United Nations Conferencs on Trade and Development,
- At a meeting of the International Monetary Fund, the representative of Colombia gave a striking example of this, In 1954, he said, Colombia had to produce 19 bags. of coffee in exchange for one automobile, Today it takes 32,
A drop in the prices of raw materials is felt with all the more acuteness when it occurs, since from one-half to nine-tenths of the exports from underdeveloped countries in general center around a single raw product. Industrial products (besides metals) constituted only 12.1% of the exports of these countries in 1959, Finished products amounted to only 7.6%.(3) This is due to the fact that these countries are characterized by. an economy of monoculture or of monoproduction. We can say with Bukharin(4) that "international exchange rests on the international division of labor," ,
In addition, the share of the colonial and semicolonial oountries in world trade has been decreasing since the rise in the production of synthetic products in the imperialist centers, From 1950 to 1960, it fell from 30% to 20% of world trade, The share of the underdeveloped countries in exports to the EEC LEuropean Economic Community -- better known as the Common Market] in particular fell from 27% to 18% between 1958 and 1962, According to the GATT [Gen~ eral Agreement on Tariffs and Trade] report for 1962, 69% of the exchanges among the capitalist industrial countries were "internal". (68% of the exchanges among the workers states were likewise "internal"); 4% of the exchanges of the industrialized capitalist countries went to the workers states (and, reciprocally, 0.19% of the exchanges of the workers states), In short, 27% of the exchanges of the developed capitalist countries were with underdeveloped countries (13% of the exchanges of the workers states). But the exchanges be~ tween the workers states and the underdeveloped countries, unlike those involving the imperialist countries, did not suffer from the strengthening of mutual ties.(5)
These changes in world commerce thus brought about an aggra~ vation of the deficit in the trade balance, a process of inflation
(3), Stanovnik: "Commerce, aide et développement économique," — Revue de la Politique Internationale, No, 353, Belgrade, 1964,
(4)N. Boukharine: L'économie mondiale et l'impérialisme, p.15. (Editions. Sociales. Internationales, Paris, (5)A. Bykov: “Le Conseil d'Entraide Economique et la coopération économique internationale," La Vie International, No. 2, Moscow,. ~ 1964, aaa me
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and a slowing down of the modest industrialization of the colonial and semicolonial countries,
The gap between the revenues of these nations and that of the industrialized countries widened. (6)
In fact, the fundamental cause of these phenomena resides in the economic structure of these countries, It is because they are underdeveloped that they lack, given their economic structure, a market which would make industrialization profitable from the capitalist point of view. That is why they remain underdeveloped, Their internal resources ~~ the social surplus. product --— thus are never invested in the industrial sectors but in enterprises that are more profitable for the national bourgeoisie, The underdevelopment is thus at once both cause and consequence of the unfavorable situation of these countries on the world market within the capitalist framework, beoause the economic traits of each country are, in the oapitalist epoch, determined by the historically defined relation that ~ links them to the world economy, — _
This brief consideration of the data of the problem permits us to see how the representatives of the various countries are weighing the problems at this "technical" conference, in relation, of _ course, to the class character of the regimes which they represent,
- It is evident that the approach to the key questions posed at the conference is not a matter of bringing technical research or goodwill to bear in seeking solutions,. The approaches, to a much more important degree, are a matter of political decisions,
Looked at in this way, the proposal of the Soviet Union, visualizing the. creation of a world trade organization that would function in a permanent way, does not. +. fundamentally modify the terms of these problems,
But the interest in such an undertaking, although not high, is real enough. It can perhaps be judged from the barrage with which the imperialist countries sought to. oppose the conference when the USSR proposed it.
These countries prefer to limit the discussion to trade problems within the GATT, where they blow hot and cold, The GATT is not an “organization, ft put an agreement which has existed since the © Havana conference of 1947 and which is based on equal competition among its unequal partners, The conferences of the GATT are gener-
(6)these phenomena were considered by the Fourth International in the theses of the fifth and sixth world congresses (see Quatridme Internationale, special numbers of 1957 and 1961,) Also see E, Germain: "Ttindustrialisation des pays arriérés" in Quatridme Inter~ nationale, No, 5, 1959,
ally devoted to the.interimperialist commercial conflicts, For ex~ ample, the current meeting of the GATT, which opened at the begin- | ning of May, is taking up the struggle between the USA and the EEC countries over lowering tariffs ("the Kennedy round"),
Among the workers states, only Cuba (since Batista) and Czechoslovakia are formally members. And at. his press conference ~~ ~ a little after the opening of the World Conference on Trade -~ Che © Guevara moreover called.for an end, pure and simple, to the GATT,
It should be noted, however, that the USSR agreed to give up insisting both on its criticisms of the GATT and its proposal for the immediate creation of a world trade organization. What is involved is. a concession to the colonial bourgeoisies who are advanoing proposals of a more moderate character,
The USA, supported by Great Britain, Canada, Japan, rejeoted the. Soviet proposal in preference for the idea of a. conference held every three years and a commission in which half -the delegates would be from the industrialized countries. The U.S. is particularly opposed to any infringement of the powers of the GATT,
If the answers given by the various countries to the numerous questions of world trade are socially determined, no important results can thus be expected from this conference which is nothing, soto speak, but a round table bringing together the workers ‘States, the exploiters and the "representatives" of the exploited. Its deoisions will not even take the form of international agreements, but _ only recommendations, according to the proposal made by the Bureau . of the Conference,
Moreover, it cannot be considered a complete "world" gather~ . ing. Neither China, nor the people's republics of Korea and Vietnam,: nor Outer Mongolia nor the German Democratic Republic are present, the USSR having made its proposal within the framework of the United Nations, It was not until later that the conference was unilater~ ally widened, from the capitalist side, Py the inclusion of: West Ger-~ many and other countries,
Let us now turn to a brief examination of the wide range of positions displayed ab the conference. Positions . of the Workers States
A joint proposal: was made by the Soviet Union, Czechoslovakia and Poland to create a. permanent world organization, as we have noted, We have noted as well the real sim of this proposal whioh | has now been withdrawn.
The Soviet Union also proposed to limit the rate of interest. on loans to underdeveloped countries,
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The Soviet Union likewise announced a measure of more spec tacular character: the abolition of taxes on all imports coming from these countries, effective January 1, 1965.
Rumania proposed setting up a fund for underdeveloped countries by reducing military expenses among all countries according to a percentage to be fixed, A similar proposal was likewise made by other countries -- Ghana and Guinea -~- but the novelty in the Rumanian proposal was that industrial equipment obtained on credit could be paid off with goods produced with such equipment.
Aside from opposition to the GATT, the Cuban positions have not. been publicized, But they appear to be more positive than the Soviet position which tends to seek accommodation with the status quo and to adjust to established positions, (7)
As for Yugoslavia, its declarations put it to the right anong the workers states, With the exception of its rather modest role in the initiatives for calling the conference, its position is defined in a resolution passed by the Yugoslav Federal Assembly February 13 which is content. to vaguely demand a "new international division of labor" and the setting up of development funds, however without any concrete proposals,(8) oo
Imperialist Positions
As was to be expected, the greatest difference among the imperialist countries appeared between the two big European adver-~ saries, France and the United Kingdom,
Since General de Gaulle!s trip to Latin America, France has taken pains to present itself to the "third world" [colonial, and semicolonial countries] as a warehouse of therapeutics,
(7)the Soviet economist V. Rymalov attempts to elevate this tendency into a "theory" by stating that a new phenomenon has appeared in recent years: the gap between the capitalist. industrialized countries and the underdeveloped countries is no longer widening! To "prove" his thesis, V. Rymalov leaves out of account the gap in industrial production and considers only the gap in the rates of growth, This distorts the perspeotive in a singular way; moreover, it discounts the rate of growth of the industrialized countries, This new "theory" aims at providing justification in the ficld of economic theory to | the rightist. theses on the possibilities of development among the colonial and semicolonial countries within the framework of "national democracy," leaving out an immediate socialist perspective. See V. Rymalov: "Un bon départ -- Tendance nouvelle dans la production industrielle des pays en voie de développement," La Vie Internationale, No, 4, Moscow. 1964, (8)Revue de la Politique Internationale, No, 553, Belgrade, 1964,
m2g-
The French propose "to organize the markets," and in line with this André Philip presented a whole plan, For him, in faot, "pure liberalism is bankrupt," because "we no longer live in the’ nineteenth century," According to him it is necessary to revise the agreements on raw materials so as to adjust price mechanisms and to assure more remunerative levels, France is supported in these views by a series of its colonies such as Dahomey and Gabon,
If France is willing to take up the current prices of pro-~ ducts, Great Britain proposes in opposition.a kind of free-trade program; that is, they advocate doing away with customs duties on tropical products and raw materials from underdeveloped countries, Increases in the prices of .these products cannot be accepted, according to this thesis, except where the price level is not "unfavorable to consumption." The line of the British delegates is supported by India, Nigeria, New Zealand, etc,
But the two. countries, both France and Great Britain, despite their differences stand.on common ground: they are for the status quo, For them, the underdeveloped countries must continue to base ’ themselves on the production of raw materials, No one takes up the real problem, the question of the economic independence of these countries, The way in which France considers international development funds should be set ‘up is significant in this respect! The French propose that such funds be derived from the difference between the current prices of exports from the ‘underdeveloped countries and the future readjusted prices. In brief, the underdeveloped countries are to be compelled to finance their own development. ..
The Belgian minister Brasseur proposed for his part a plan bearing his name and which is supported by the EEC countries, The gist is to give preference to underdeveloped countries in order to enable them to sell manufactured goods in the industrialized countries produced under "healthy economic conditions." The promise to buy would be related to "discipline" in the quantity ({) as well as the quality of production, The laok of precision in these state~ ments clearly leaves room for all kinds of discriminatory measures,
This poses the whole problem of preferences along with that of customs policy. The discriminatory practices of the EEC in tariffs is indicated by the simple. fact that import taxes among the Common Market countries increase in proportion to the degree in which the imported products have been worked up. Bukharin indicated(9) the character of this policy which was completely modified with the rise of imperialism. "If the former customs duties had a defensive aim, this no longer holds with the present duties, which have an offensive aim. . . Today. . . precisely those branches of. industry best able to compete are the ones that are protected," It is this kind of protection that is aimed at by the countries that support
(S)N, Boukharine: L'économie mondiale et 1'im 6rialisme, p. 68,
Internationales, Paris, 1988.) (Editions Sociales
the Brasseur plan; -by means of preferences they want to assure what was formerly accomplished by tariffs, POLY Cone lus ions
mis sketch ‘of the various positions “permits us to draw some: preliminary conclusions. about this conference whose work is to con= tinue until mid June.
Thus, as has. been said, the problems of world commerce relate to the international division of Tabor. —
“The: conditions of the latter are obviously of two orders: natural conditions and social conditions, but the former are being relegated more and more to the background,
We are thus dealing with problems that can be handled only by the Glass struggle and not by conferences of this type. At the most they can eliminate certain price distortions, compel recognition’ of prices on the world market, or even stabilize certain prices,
The latter problem, however, was felt with less acuteness during the months preceding the conference, prices of raw materials having gone up during 19635 ~- above all mineral products -- due to the favorable economic cycle.
“But partial solutions leave untouched the root of the proplem} that is, the present international division of labor. Consequently the imperialist exploitation of countries of lower productivity continues through the purchase of raw materials, the export of industrial products and the export of capital from the imperialist countries,
“Is a more vigorous attitude open to the workers states? Evidently so, Imperialism not only had to concede on a series of points out of fear that the semicolonial countries might increase trade with the workers states, but also in the case of setbacks, the workers states could utilize the conference as a tribune to proolaim that these problems cannot be resolved except by considering world economy as a whole; that is, brought within the framework of a single plan, which implies a socialist solution,
In short it is not a question of trade that is involved but relations of production; and the point of Marx's banter, cited at the beginning, retains all its sharpness. May-12, 1964
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