UNCTAD and UNCITRAL

1. UNCTAD: origin

Developing countries complained in the 1950s and early 1960s that GATT was a club of industrialised States, built around tariff bargaining on manufactures, which did little for exporters of primary commodities facing falling prices. The Argentine economist Raúl Prebisch argued that the terms of trade moved steadily against producers of raw materials. Their pressure led to the first United Nations Conference on Trade and Development at Geneva in 1964. The General Assembly then made UNCTAD a permanent organ by resolution 1995 (XIX) of 30 December 1964. The Group of 77 developing countries was formed at the same conference and remains UNCTAD's main negotiating bloc. Prebisch was its first Secretary-General. Its headquarters are in Geneva.

2. Objectives and functions

• To promote international trade with a view to accelerating economic development, particularly of developing countries.
• To formulate principles and policies on international trade and related problems of economic development.
• To initiate action for the negotiation of multilateral trade agreements in its field.
• To act as a centre for harmonising the trade and development policies of governments and regional groupings.
• Today, research and analysis (the World Investment Report, the Trade and Development Report, the Review of Maritime Transport), technical assistance, and consensus-building on debt, investment, commodities and the digital economy.

3. Structure

• The Conference, of all member States, meeting normally every four years. It is UNCTAD's highest policy-making body.
• The Trade and Development Board, which carries on the work between Conferences, with commissions and expert meetings under it.
• The Secretariat, headed by a Secretary-General appointed by the UN Secretary-General and confirmed by the General Assembly. It forms part of the UN Secretariat.

4. What UNCTAD achieved

• Generalised System of Preferences (GSP). Agreed in principle at the second Conference held at New Delhi in 1968. Developed countries grant non-reciprocal tariff preferences to imports from developing countries. GATT accommodated it first by a waiver in 1971 and then by the Enabling Clause of 1979, an exception to most-favoured-nation treatment.
• Part IV of GATT (Trade and Development, 1965) was added under the same pressure.
• Commodity agreements and the Integrated Programme for Commodities (1976), with the Common Fund for Commodities.
• Global System of Trade Preferences among developing countries (1988), to which India is a party.
• Codes and conventions: the Code of Conduct for Liner Conferences (1974); the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices (1980); the draft International Code of Conduct on the Transfer of Technology, negotiated for years but never adopted; and the UN Convention on International Multimodal Transport of Goods (1980), which has not entered into force.

Assessment. UNCTAD has no power to bind States and no dispute settlement. Its influence is through ideas, data and coalition. After 1995 the WTO took over the negotiating role, and UNCTAD's work moved towards analysis and capacity-building for developing countries.

5. UNCITRAL: origin and mandate

The United Nations Commission on International Trade Law was established by General Assembly resolution 2205 (XXI) of 17 December 1966. Its mandate is the progressive harmonisation and unification of the law of international trade. Differences between national laws of sale, carriage, arbitration and payment were an obstacle to trade, and UNCITRAL was created to reduce them. It is the core legal body of the UN system in this field, and its secretariat is the International Trade Law Division of the UN Office of Legal Affairs, located in Vienna.

6. How UNCITRAL works

The Commission is composed of member States elected by the General Assembly for six-year terms, chosen to represent the world's regions and legal systems; its membership has been enlarged from the original 29. Preparatory work is done in working groups on topics such as arbitration, insolvency, electronic commerce and investor-State dispute settlement reform, and the Commission adopts texts by consensus at its annual session. It uses several kinds of instrument:

• Conventions, binding on States that ratify them;
• Model laws, which States may enact with or without changes;
• Legislative guides and recommendations; and
• Contractual rules, such as the Arbitration Rules, which parties adopt by agreement.

7. Principal texts

• United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980; CISG), the subject of Unit III. India is not a party.
• Convention on the Limitation Period in the International Sale of Goods (1974).
• UN Convention on the Carriage of Goods by Sea (Hamburg Rules, 1978) and the Rotterdam Rules (2008), the latter not yet in force.
• UNCITRAL Arbitration Rules (1976, revised 2010 and 2013) and the Model Law on International Commercial Arbitration (1985, amended 2006).
• Model Law on Electronic Commerce (1996) and on Electronic Signatures (2001).
• Model Law on Cross-Border Insolvency (1997).
• United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention, 2018), which India signed in 2019.
• The Rules on Transparency in Treaty-based Investor-State Arbitration (2014) and the Mauritius Convention giving effect to them.

8. UNCITRAL and Indian law

The Arbitration and Conciliation Act, 1996 is based on the Model Law and the Conciliation Rules, as its Preamble says. The Information Technology Act, 2000 was enacted to give effect to the Model Law on Electronic Commerce, as its Preamble also records. India has not adopted the CISG or the Cross-Border Insolvency Model Law, although the Insolvency Law Committee has recommended the latter.

How this is examined

For a short note on UNCTAD: origin in 1964 and the Prebisch argument, the objectives, the three-part structure, the GSP (New Delhi, 1968) and one line of assessment. For UNCITRAL: the 1966 resolution, the harmonisation mandate, the kinds of instrument, and the CISG, the Model Law on arbitration and the e-commerce Model Law, each linked to its Indian counterpart where there is one. A question on “institutions of international trade” expects UNCTAD, UNCITRAL and GATT in turn.