INTERNATIONAL ISSUES MONTHLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00912A002300010014-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 20, 2016
• Document Release Date: June 6, 2006
• Sequence Number: 14
• Publication Date: January 25, 1978
• Content Type: REPORT

National J Secret
pp yy j,For Release 2007/03/06: CIA-RDP79T00912A0pL~30 1-4-
Assessment 7)
Center
International Issues
Monthly Review
25 January 1978
State Dept. review completed
Secret
RP IIMR 78-001
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II
INTERNATIONAL ISSUES MONTHLY REVIEW
25 January 1978
CONTENTS
CURRENT TRADE TENSIONS: A POLITICAL ECONOMY
APPROACH . . . . . . . . . . . . . . . . . . . .
Recent protectionist pressures are rooted
in Long-term, structural changes in the
world political economy and do not simply
reflect cyclical growth problems in the
industrial countries. These pressures
should be viewed as one among several in-
dications of a broader challenge to the
Liberal, postwar Western trade order and
the close economic interdependence it has
fostered. The result is a trend toward
politicization of trade relations that
both reflects and further encourages gov-
ernment policies of economic nationalism.
LDC PERSPECTIVES ON CONVENTIONAL ARMS TRANSFER
RESTRAINTS . . . . . . . . . . . . . . . . . . . 9
This article combines an overview of the
subject with five brief case studies (Yu-
goslavia, Saudi Arabia, Brazil, India,
and Malaysia). While intended to provide
some observations about LDC attitudes and
perspectives that could prove useful in
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connection with the forthcoming UN Gen-
eral Assembly Special Session on Disarma-
ment, its primary purpose is to Zook be-
yond that forum and to offer a rudimen-
tary analytical framework for charting and
assessing alternative follow-on strategies
for garnering LDC support for conventional
arms transfer restraints.
THE INTERNATIONAL NUCLEAR FUEL CYCLE EVALUATION:
A PRELIMINARY ASSESSMENT . . . . . . . . . . . . 26
The international nuclear fuel cycle eval-
uation, a US initiative to bolster non-
proliferation through a comprehensive re-
view of alternative nuclear power systems,
has moved into the technical studies phase
of its two-year mandate. Although it has
gained a measure of acceptance as a techni-
cal forum, lingering political doubts
about the ultimate objectives of the eval-
uation are working to undercut its useful-
ness in fostering nonproliferation.
THE UNCTAD INTEGRATED PROGRAM FOR COMMODITIES:
PROGRESS AND OUTLOOK . . . . . . . . . . . . . . 31
Because the common fund and the UNCTAD in-
ternational commodity agreements involve
distinctly different LDC players and in-
terests, the likely progress in the months
ahead on the ICA talks will not facilitate
agreement on the common fund.
32ND UN GENERAL ASSEMBLY: THE BYWORD WAS
COOPERATION . . . . . . . . . . . . . . . . . . . 35
Compared to most recent sessions, the 1977
General Assembly was largely free of
acrimony between the LDCs and the indus-
trial states. Although the cooperative
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tone will probably carry over into forth-
coming UN meetings, the atmosphere is
fragile. LDC frustration over Zack of
progress in obtaining their goals could
turn the newly created overview mechanism
for North-South issues into a forum for
confrontation.
This publication is prepared by the International Issues Division, Office of Regional
and Political Analysis, with occasional contributions from other offices within the
National Foreign Assessment Center. The views presented are the best judgments of
individual analysts who are aware that many of the issues they discuss are subject to
alternative interpretation. Comments and queries are welcome. They should be
directed to the authors of the individual articles.
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Current Trade Tensions: A Political Economy Approach
Political analysts are increasingly called upon to
help clarify the sources and possible impact of the
growing tensions in trade relations, and in particular
the apparent widespread rise in protectionist pressures
among the OECD countries. This article attempts to gain
perspective on the problem by examining it in the context
of broader trends in current international relations.
The article suggests that recent protectionist pressures
are rooted in long-term, structural changes in the world
political economy and do not simply reflect cyclical
growth problems in the industrial countries. Further-
more, these pressures should be viewed as one among sev-
eral indications of a broader challenge to the liberal,
postwar Western trade order and the close economic inter-
dependence it has fostered. The result is a trend toward
the politicization of trade relations that both reflects
and further encourages government policies of economic
nationalism.
Protectionism and Politicization
A number of developments have combined in recent
years to alter the economic, political, and strategic
framework of OECD trade relations in ways that have re-
duced these countries' "tolerance" for relatively un-
restrained free trade and interdependence. While an
improvement in OECD growth and employment prospects would
mitigate the impact of some of these developments, the
global environment would nonetheless remain in many
respects unfavorable to broad progress toward further
trade liberalization. The most important trends include
the following:
-- The rise of OPEC has dramatized the risks and
vulnerabilities of interdependence, while
high energy costs have retarded growth,
magnified balance of payments pressures,
and aggravated differences between strong
and weak economies among the OECD countries.
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-- The greater role of some Third World countries
as exporters of manufactured goods portends
a basic shift in the global division of
labor requiring very difficult long-term
adjustments in the OECD countries.
-- The greater assertiveness of the Third World,
the emergence as "second order powers" of
various resource-rich and industrially
dynamic LDCs, and the growth of East-West
trade have made significant participants
of countries that were once peripheral to,
or passive subjects of, the OECD trade and
monetary order. The resulting increase in
political and economic diversity has
magnified the impact of counterpressures
on a liberal trade framework.
-- There has been a perceived contraction in
the external political-security role of the
liberal order's main sponsor and its
preeminent power, the United States.
Perceptions of a decline in US ability
and/or willingness to uphold that order
have been significantly reinforced by the
energy crisis and by the erosion of the
"free trade consensus" among domestic US
interest groups.
The collective impact of these trends has been to
weaken the conditions that helped insulate OECD trade
relations from political controversy during much of the
postwar period and hence, to obscure the boundary between
routine economic transactions and questions of "high
politics" and security. As a corollary of this "polit-
icization" of trade relations, the role of the state
has become more prominent in international economic
relations.
It is frequently noted that foreign policy, espe-
cially in the OECD countries, is increasingly devoted
to the pursuit of economic objectives. Equally sig-
nificant, however, is the converse proposition that to
an important degree foreign economic policy is now devoted
to the pursuit of traditional "high politics" interests--
power, security, autonomy, access. That is, contrary
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to the view that the nation-state is declining in impor-
tance as world politics becomes concerned with the issues
of interdependence, there is a strong "neo-mercantile"'
countertrend that finds governments attempting to gain
greater influence over economic transactions and the
institutional frameworks in which they are conducted
and using economic policy to advance specifically na--
tional interests.* This broadening of the stakes in
trade relations to include basic interests and principles
rather than simply the allocation of goods within a
fixed system is a central feature of the politicization
of economic issues.
From this perspective, recent OECD protectionist
pressures are one manifestation of a trend that, while
partly rooted in the growth and employment problems
facing Western governments, transcends these problems:
the trend toward the subordination, or attempted sub-
ordination, of international economic transactions to
political control, regulation, or management. Attempts
on the part of governments to escape the effects of
free market interdependence are pervasive and of in-
creasing political importance. They sometimes reflect
domestic interests--as in the case of OECD unemployment
problems--and sometimes "state interests"--as in much
of the Third World pressure for a New International
Economic Order (NIEO) or OECD efforts to secure access
to raw material supplies or regulate arms transfers.
In some cases, the objective is to curtail interdependence
(e.g., through traditional trade restrictions or attempts
to reduce energy dependence), while in others the aim is
to alter its terms (e.g., OPEC or the UNCTAD integrated
commodity program). The common theme, however, is the
substitution of a political or social logic for the logic
of the market.
*Note that this is not inconsistent with the notion of
pervasive governmental weakness among the OECD countries.
On the contrary, weak governments are less able to resist
domestic pressures for trade restrictions than are strong
ones, as current trade negotiations frequently demonstrate.
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The Logic of Political-Economic Bargaining
The perspective outlined above contains certain
implications for the analysis of contemporary trade
issues. At the most general level, it cautions against
a chain of reasoning that leads from economic "givens"
to the examination of political consequences. Instead,
it is often necessary to begin by examining the interests
and incentives behind the essentially political acts
by which governments attempt to shape their economic
environment. This focus in turn directs analytical
attention to the logic of interaction in a politicized
economic system.
Free market principles provide an "objective"
mechanism that insulates issues of prices, production,
and trade patterns from political conflict. If the
legitimacy and "objectivity" of this mechanism are widely
questioned, however, these issues become subject to
political-economic bargaining in which not only specific
cases but precedents for related issues are implicitly
at stake. The logic of such bargaining--its underlying
rationality and the resources and incentive structures
of the participants--may differ significantly from that
of narrowly defined economic bargaining. For example:
-- Under a liberal order, where trade is largely
determined by comparative advantages, tastes,
and the like, political differences among
the participants tend to be submerged. In
contrast, the more prominent role of the
state in a politicized system enhances
the influence of distinctively national
interests (e.g., stemming from strategic
or resource vulnerabilities) and idiosyncratic
domestic conditions (cultural values, re-
gional or ideological factionalism) as crucial
factors in economic relations and bargain-
ing. Analytically, this draws attention
to important differences among states
that reveal a grouping like the OECD to
be considerably less homogeneous than it
might otherwise seem.
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-- Relative strengths and weaknesses of states
may differ substantially depending upon
whether one is concerned with a narrow
economic or a broader political-economic
setting. For example, Japan's economic
strength--as measured by conventional
economic indicators--is deceptive. It
depends upon the maintenance of certain
political-economic conditions--especially
reliable access to energy and raw materials--
that cannot be taken for granted. This
potential vulnerability, combined with
an exposed strategic position, makes it
questionable to treat Japan as a "strong"
country and to expect it to respond as
if from a position of strength and con-
fidence to pressures for economic con-
cessions. The negotiability of its ex-
port performance or its economic growth
rate--both of which are linked directly
to the vital question of energy imports--
is subject to a different set of criteria
than would be the case for a more self-
sufficient economy. By contrast, the
strength of the US economy, despite its
problems, is much less contingent upon
the maintenance of a favorable set of
environmental conditions.
-- Behavior that appears to contradict economic
self-interest may appear rational (and
so more susceptible to accurate inter-
pretation and prediction) if viewed from
a political-economic perspective. For
example, LDC solidarity with OPEC, which
makes little sense from a strict economic
standpoint, is more easily explained if
seen as an attempt to uphold the prin-
ciples--central to a "new international
economic order"--of national sovereignty
over natural resources and the legitimacy
of market control by LDC producer associa-
tions.
-- Many disputes in a politicized system are
in essence conflicts over competing sets
of rules. Which principle should guide
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trade in nuclear technologies: liberal
nondiscrimination, technology transfer
to LDCs, or nonproliferation of nuclear
weapons? Can "energy power" override
customs union interests and win concessions
from the EC for the entry of OPEC petro-
leum products? As such examples suggest,
the issue is seldom as clearcut as a
conflict between free trade and protection,
but is rather between competing alterna-
tives to free trade--i.e., a classic polit-
ical question of defining rules.
-- Finally, a good deal of international
economic behavior in a politicized sys-
tem involves the use of linkage strategy.
Again, this significantly affects the in-
terpretation of motives and the assessment
of bargaining resources. In linkage stra-
tegies, economic concessions are tied to
performance in other areas (e.g., Middle
East or human rights policy) or, conversely,
political support of various kinds is
tied to economic concessions (e.g., on the
NIEO).
Implications
One of the main purposes of political economy stud-
ies should be to improve our estimative capabilities re-
garding the nature and scope of realistic international
agreements on current trade issues. With this goal in
mind, the following discussion offers some tentative
hypotheses and illustrates the kinds of topics that could
usefully be addressed in empirical research.
The erosion of the political-economic underpinnings
of the postwar trade regime seems unlikely to be followed
closely by the establishment of a new order of comparable
stability and endurance. The necessary agreement on first
principles--on basic tasks, rules, and procedures--will
be lacking for the foreseeable future. As a result, there
is likely to be an extended period of politicization and
conflict among competing principles of order and legiti-
macy in which efforts to restore a measure of routine and
regularity to economic transactions will be highly pre-
carious.
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This environment will be much more complicated than
either the open liberal system envisaged by GATT or the
deterioration into trade wars between competing regional
blocs or cartels predicted by some observers. It is likely
to frustrate comprehensive approaches such as the Multi-
lateral Trade Negotiations (MTN) or the NIEO and instead
favor the proliferation of "partial economic orders."
These partial orders may involve particular sectors (energy,
steel, textiles), subsectors (within the energy sector,
the rules for oil and uranium are quite different), or
countries (the Euro-Arab dialogue, the FRG-Brazil relation-
ship). Exceptions to the principles of nondiscrimination,
universality, and free trade will become increasingly
attractive as political-economic factors argue for dif-
ferent rules for different partners and important trans-
actions are frequently conducted on a government-to-gov-
ernment basis with implicit noneconomic dimensions.
Thus, while lip service may be paid to the importance
of a successful MTN or North-South Dialogue, states may
in fact be operating on the assumption that such talks
are unlikely to succeed and may be seeking to preserve
their options for responding to changing world economic
conditions or to opportunities for entering into limited
contractual arrangements or "special relationships" with
important trade partners. They may accordingly see little
to be gained by making significant concessions in a multi-
lateral process that is essentially peripheral to the main
action.
Finally, a politicized system of partial orders
seems likely to be less favorable to the application of
US influence and leverage than the liberal order of which
the US has been in effect the sponsor and guardian. In
part, this is due to the fact that the US is often per-
ceived as unable to lessen the risks and vulnerabilities
of its OECD partners (most dramatically, in the case of
energy dependence). Greater responsiveness to key sup-
pliers of raw materials and energy, as well as preoccupa-
tion with domestic political and economic weaknesses,
makes other states less responsive to the kinds of pres-
sures and inducements that the US can bring to bear.
This problem is reinforced by perceptions that US
domestic pressures (and global -trends generally) may be
leading toward a new wave of protectionism regardless of
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official US policy. There is evidence of foreign re-
luctance at MTN, for example, to make commitments to
liberalization (implying difficult adjustments) that the
US may be unable to reward with corresponding concessions.
Similarly, LDC reluctance to take a stand against OPEC
partly reflects the belief that the OECD countries, given
their own problems, would be unlikely to reward such a
shift very generously.
In place of one overarching order in which the US
was the predominant power, there are a multiplicity of
orders, with leverage and resource patterns varying among
them. In these circumstances, influence and credibility
need to be established on a case-by-case basis, and there
is a diminution of the generalized deference that the US
formerly commanded.
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LDC Perspectives on Conventional Arms Transfer
Restraints
The US approach to reducing conventional arms trans-
fers (CAT) is of necessity a three-pronged effort: the
imposition of more stringent restrictions on US trans-
fers, the persuasion of other suppliers to exercise
similar restraint, and the encouragement of recipient
states to limit their arms purchases through voluntary
abstention and regional accords. Up to now, the diplo-
matic initiatives associated with this strategy have
focused primarily on the principal supplier states. In
contrast, the final two meetings of the preparatory
committee for the UN General Assembly Special Session
on Disarmament (SSOD) that are scheduled from 24 January
to 24 February and 10-21 April and the five-week-long
SSOD plenary that opens on 23 May will give the US a
unique opportunity to argue its case for CAT restraints
before a wide assemblage of LDC disarmament specialists.
The modesty of the tentative US objective--to have
some general language endorsing supplier-recipient co-
operation in restraining CAT included in the final con-
ference documents--reflects a basic appreciation of the
resistance that these arguments are likely to encounter.
While this paper is intended to provide some additional
observations about LDC attitudes and perspectives that
could prove useful in the context of the Special Session,
its primary purpose is to Zook beyond that forum and to
offer a rudimentary analytical framework for charting
and assessing alternative follow-on strategies for
garnering a necessary minimum of LDC support for CAT
restraints.
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The three strands of the US strategy for curtailing
CAT are interdependent. But despite their complementary
aspects, they are also to some degree contradictory.
For example, US restraint is both a prerequisite for
successful efforts to persuade other suppliers to curb
their arms sales and an incentive for the expansion of
such sales. Another and more fundamental area of con-
flict stems from the fact that the effective initial ob-
jective of the US approach--to limit arms transfers to
LDCs--is inherently discriminatory.* Hence, unless they
are carefully designed, energetic steps to press forward
on this course will risk endowing the CAT limitation
issue with a North-South dimension that could easily
stiffen the resistance of many developing countries that
might otherwise be sympathetic (or at least indifferent)
to the idea of curbs.
This risk has been enhanced by a number of develop-
ments affecting the overall international environment,
particularly:
-- The seriousness of LDC demands for a re-
distribution of both economic and polit-
ical (i.e., decisionmaking) power in the
international system.
-- The growing sensitivity among LDCs to
linkages (real and perceived) among US
policy initiatives in the fields of arms
transfers, human rights, and nuclear
proliferation and between these and the
fundamental thrust of the North-South
dialogue.
These trends have not, of course, been reflected
in the behavior of every LDC. But whatever combination
of factors has been responsible in any given case, it
*Japan, Australia, New Zealand, and NATO members are by
and large exempted from the dollar volume restraints
and other new controls that have been imposed on US arms
transfers. By implication, arms transfers among members
of the Warsaw Pact also fall outside the purview of cur-
rent US CAT limitation efforts.
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should be borne in mind that many of the most influential
developing nations--countries like Mexico, Iran, Indo-
nesia, India, and Nigeria--are currently proponents of
major political chap e. And even those that are not
can be expected to react adversely
to moves appearing to threaten their sovereign preroga-
tives or restrict their prospects for achieving a greater
voice in international institutions and councils.
Under these circumstances, US initiatives to reduce
transfers of conventional arms will have to overcome
considerable initial skepticism and suspicion among the
LDCs. Specifically, US assurances of intent to bring in
the LDCs as full partners in the CAT limitation process
will be carefully weighed against such seemingly counter-
vailing evidence as discriminatory US unilateral re-
straints and parallel efforts to foster supplier collab-
oration in ways that raise the specter of the controvers-
ial London Club in the nuclear field. Similarly, most
LDCs will be inclined to discount the significance of
pledges to meet the "legitimate security needs" of all
nations so long as it appears that the reality and ex-
tent of a country's requirements for conventional weapons
will be determined by other powers--whether acting singly
or in concert.
In any event, the dynamics that drive the arms trans-
fer process are complex. US efforts to curb arms sales
will affect almost every key LDC differently, and the
motives and sensitivities of each must be taken into ac-
count if the demand side of the equation is to be con-
trolled. Although failure to rein in demand would prob-
ably be of little consequence at first, in the longer
run it would threaten to:
Exacerbate strains among major suppliers.
Accelerate the development of indigenous
arms industries and the growth of arms
trade among the LDCs themselves.
Create tensions that could adversely af-
fect US initiatives and interests in
such diverse fields as human rights,
nuclear proliferation, basic human needs,
energy, and law of the sea.
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General Observations
On 23 November 1976, Japan introduced a draft reso-
lution at the UN dealing with the "international transfer
of conventional arms," thereby focusing the General As-
sembly's attention on that subject for the first time in
roughly eight years. Ultimately cosponsored by 17 other
states (including 11 LDCs), the resolution did little
more than request the Secretary General to prepare a
factual study of the problem for consideration at the
next session of the UN General Assembly. Nevertheless,
the Japanese initiative was killed just 10 days later in
the First Committee of the General Assembly when a motion
by India to adjourn debate carried by a wide margin (51
to 32, with 33 abstentions).
The voting pattern registered on that occasion is
instructive. A total of 42 LDCs (including one sponsor
of the Japanese resolution, Cameroon) voted in favor of
the Indian motion to adjourn the proceedings--as did the
USSR and most of its allies. An additional 24 LDCs ab-
stained. Only 17 joined Japan, the US, the UK, and a
handful of other industrialized states in voting against
the motion.*
Although clearly an imperfect barometer, the ballot-
ing on the fate of the Japanese resolution suggests that
some LDCs, particularly those that are poor in resources
and threatened by more powerful neighbors, view the lim-
itation of CAT as a matter of some urgency in its own
right. But most, including many of those that are genu-
inely concerned about the implications of the flow of
Soviet and Western arms into areas of tension, believe
that the more awesome threat of strategic weapons should
be tackled first. In any event, they tend to view the
control of CAT as a problem that (like most other aspects
of disarmament) should be addressed primarily in terms
of its East-West dimensions. It follows that efforts
to slow or halt the qualitative and quantitative conven-
tional arms competition between NATO and the Warsaw Pact
'The LDCs that voted against the Indian motion were
Bolivia, Chile, Colombia, Ecuador, EZ Salvador, Ghana,
Liberia, Nepal, Paraguay, the Philippines, Sierra Leone,
Singapore, Swaziland, Thailand, Tunisia, Uruguay, and
Venes ue Za.
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would probably be widely welcomed (particularly if it
appeared that at least some of the savings realized would
be diverted to development aid).* Conversely, any pro-
posal that seemed aimed primarily at restricting the
overall ability of LDCs to import or export conventional
arms would be almost certain to receive a cool reception.
In short, LDCs are more than ever concerned with
preserving and enhancing their freedom of maneuver. They
tend to see the greatest threat to world peace--and to
their general political and economic prospects--in the
continuing efforts of the major industrialized nations
to arm themselves and to expand their influence to all
corners of the globe. Moreover, as far as most develop-
ing countries are concerned, the best way to defend
themselves against the danger of "neocolonial" arms-based
dependencies--or the hazard of East-West entanglements--
is not to cut back on arms purchases but to diversify
sources of supply.
Beyond these general positions, consensus rapidly
declines, for each LDC has its own domestic and foreign
concerns that color its position on CAT. Some are emerg-
ing arms exporters searching for markets that will permit
economies of scale. Others must cope with regional con-
flicts or armed insurgency. Still others are seeking
greater prestige abroad or, through placating a restive
military establishment, greater stability at home.
Together with the persistent intrusion of broader
North-South considerations, the diversity of these con-
cerns suggests that no generalized approach to securing
LDC support for curbing CAT (or at least none that the
various industrial powers are likely to find acceptable)
will by itself suffice to win over more than a handful
of the key members of that group. To be more widely
effective, such a policy would almost certainly have to
be supplemented by individually tailored "incentives"?
including some, such as security guarantees and exten-
sive military renovation or construction programs, that
the US could find difficult to deliver for reasons of
cost or political sensitivity (including human rights
concerns).
'China, which for obvious reasons would prefer to see
the Soviets preoccupied with the "NATO threat," is a
notable exception in this regard.
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Gaining an appreciation of just what may be needed
to obtain a necessary minimum of LDC support for CAT
limitations will require judicious identification of the
countries that warrant special attention--including those
"opinionmakers" (e.g., established or aspiring regional
powers and respected Nonaligned or Group of 77 spokesmen)
that are not themselves actively engaged in buying or
selling arms--and painstaking case-by-case analysis.*
The objectives of this brief paper are much more modest.
Nonetheless, the representative country sketches that
follow are intended to provide both a preliminary explora-
tion of the problem and a framework for follow-on
analysis.**
Yugoslavia
Yugoslavia is an active and influential charter
member of both the Nonaligned Movement and the Group of
77. One of the most developed of the developing coun-
tries, it is both an importer and exporter of conventional
arms. While Belgrade is still reliant on outside sup-
pliers (primarily, but not exclusively, the USSR) for
such technically complex arms as high performance air-
craft and tanks, its burgeoning arms industry now manu-
factures a wide array of military equipment ranging
from small arms to submarines and jet fighters. This
development has, in turn, fostered an increasingly
vigorous effort to market Yugoslav military equipment
abroad. In 1976 (the last full year for which data are
currently available), Yugoslav military deliveries to
non-Communist countries totaled over $100 million. Dur-
ing the same 12-month period, Belgrade signed a number
of new agreements with non-Communist states that con-
tracted it to provide more than $500 million in military
goods and services over the next few years. Character-
istically, the vast majority of these export transactions
involved LDCs.
'TThis effort should not be restricted to those countries
that are considered to be "potential converts," for the
likely behavior and influence of such near-certain re-
calcitrants as Algeria and Libya also need to be assessed.
**Work on one such "second generation" study--an ap-
praisal of the problems ZikeZy to be encountered in ef-
forts to curtail arms transfers to South Asia--is al-
ready under way.
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For the Yugoslavs, the import of sophisticated mili-
tary hardware--on which they currently spend between $100
and $300 million a year--is both a temporary necessity
and a sovereign prerogative.* But in keeping with their
general world view (which attributes most of the world's
ills to "bloc divisions" and an inequitable interna-
tional order dominated by the industrialized states),
they seek to bolster their security and independence by
achieving self-sufficiency in arms production by the
year 2000. Together with basic economic imperatives
born of chronic balance of payments and unemployment
problems (as well as with the political concerns reflected
in Belgrade's perennial campaign to enhance its standing
as a Third World spokesman), this objective provides a
powerful incentive for further efforts to expand arms
sales to--and to engage in more defense-related joint
production ventures with--other leading LDCs. Indeed,
the Yugoslavs would seem to have little alternative if
they hope to achieve the economies of scale (and to ob-
tain the infusions of capital) that will be required to
move significantly closer to self-sufficiency than they
are today.**
In light of the above, Yugoslavia's seminal role
in the genesis of the SSOD may seem somewhat odd. But
the prism through which the Tito regime views the world
dispels the apparent inconsistency between Belgrade's
longstanding and active interest in disarmament and its
growing role as an arms supplier. Simply put, Belgrade
believes that if the LDCs act in concert, the disarma-
ment process offers a unique and promising means for
undermining the industrialized nations' dangerous and
unjust monopoly of military, political, and economic
power. The emergence of alternative arms suppliers
among the LDCs tends to advance these same goals and
thus is seen as a useful (and even necessary) adjunct
to the overall disarmament effort.
*YugosZav arms purchases are driven primarily by BeZ-.
grade's unique security concerns. To some degree, how-
ever, they are also motivated by prestige goals and a
desire to sustain the undivided loyalty of a military
establishment that might be called upon to play a key
stabilizing role in the post-Tito period.
**The Yugoslavs claim that their industrial plant can
now supply about 85 percent of the military materiel
that their armed forces need.
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Belgrade is on record as being generally receptive
to proposals for the control of conventional arms, but
it has expressed fundamental skepticism about "unbalanced"
schemes that are limited in scope or geographic area.
From the Yugoslav point of view, the resolution on con-
ventional arms transfers that Japan introduced during
the 31st Session of the General Assembly fell squarely
in the latter category. As a result, Yugoslavia not only
voted for but seconded the motion that killed Tokyo's
initiative in early December 1976.*
Given the negative Yugoslav reaction to the Japanese
resolution (and the higher priority it attaches to other
disarmament issues), Belgrade's action scarcely three
months later in recommending to the Nonaligned SSOD
Steering Committee that CAT be included on the Special
Session agenda as a separate topic was probably little
more than a tactical maneuver designed primarily to win
Western support for that gathering. Similarly, Belgrade's
motives and objectives in subsequently suggesting to the
UN Secretary General (in a letter concerning the SSOD)
that arms transfers to areas of crisis or conflict should
be restricted, bear cautious appraisal--particularly
since regional tensions or strife have rarely inhibited
Yugoslavia's own arms sales efforts.
In sum, US and Yugoslav views on the proper scope
and focus of both unilateral and multilateral efforts
to limit CAT differ significantly and will probably con-
tinue to do so for the foreseeable future. Yugoslavia
has, however, pledged to pursue a "realistic and moderate"
approach at the SSOD--and to encourage its Nonaligned
partners to follow suit. Hence, the practical signifi-
cance of these differences to US policies and interests
may not become fully apparent until after that meeting
is over and follow-up efforts have begun.
*Yugoslavia's inclination to resist conventional arms con-
trol proposals that seem to sustain or enhance the military
superiority enjoyed by the industrialized powers has been
reinforced by what it perceives as the discriminatory na-
ture of the current international nonproliferation regime.
Moreover, Belgrade's freedom of maneuver on CAT issues is
constrained by its desire to maintain LDC solidarity. While
generally an advocate of moderation in the overall North-
South dialogue, Belgrade has repeatedly demonstrated its re-
luctance to risk splitting either the Nonaligned Movement
or the Group of 77--and weakening its influential position
therein--by confronting the radicals head-on.
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Brazil is a rapidly growing, relatively wealthy LDC
aiming at a predominance within Latin America that is
challenged primarily by Argentina. Both a major purchaser
and growing supplier of arms, it is firmly opposed to any
uni- or multilateral restraints on conventional arms trans-
fers. It views them in much the same way as it sees curbs
on nuclear fuel cycle development--as unacceptable infringe-
ments on its national sovereignty and obstacles to its
drive to maintain and enhance its status as a major re-
gional power. The proclivity of military regimes to bol-
ster their arsenals also underlies Brazil's wish to re-
tain unfettered access to arms supplies.
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During the first 20 years after World War II, Brazil--
like the rest of Latin America--relied almost exclusively
on the US for its armaments. In the mid-1960s, it began to
diversify its sources of supply. American limitations
on the sale of high technology weapons in particular
meant that Brazil had to find such arms elsewhere, and
it became increasingly skeptical of US reliability as an
arms supplier. In addition, its growth in regional power
and influence probably made it more restive at any depend-
ence on the US.
By the early 1970s, Brazil was receiving most of its
conventional arms from West European suppliers, which
were more eager to sell and less likely to impose future
restrictions than the US. By abrogating its 1952 military
assistance agreement with the US in response to disputes
over human rights and nuclear reactor development, Brazil
served notice of its intent to guard its national sover-
eignty and exercise its freedom in choosing arms suppliers
Thus, it maintains a military purchase mission in Washing-
ton despite the cancellation of the assistance agreement.
Brazil is not only diversifying sources in its effort
to gain secure arms supplies. It is also trying to es-
tablish itself as a conventional arms manufacturer and
exporter. Although the effort is still limited, Brazil
is striving to attain military self-sufficiency and the
political and economic benefits associated with being an
arms exporter.
Brazil's position on CAT issues is consistent with
its general aims in the Group of 77. Although its own
interests as an "upper-tier" LDC lead it to take moderate
positions on most North-South economic matters, it supports
many claims of poorer, more radical developing countries
in order to verify its LDC credentials and to maintain
Group of 77 solidarity. Brazil's perceived interests on
CAT issues are probably too strong to allow it to make
compromises in this sphere, but neither are they likely
to be necessary for the sake of LDC unity at the SSOD.
Even though its views opposing CAT restraints coin-
cide with those of many G-77 members, Brazil will probably
maintain a low profile in CAT discussions. The power and
prestige motivations underlying its opposition to CAT
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restraints are seen as too threatening by its Latin Ameri-
can neighbors for it to adopt a more active role. It is
noteworthy that seven of the 17 LDCs that supported the
1976 Japanese General Assembly resolution were South Ameri-
can neighbors of Brazil. The only South American countries
to oppose the resolution were the continent's leading arms
importers--Brazil, Argentina, and Peru.
India
Despite India's carefully cultivated pacifist image,
New Delhi has firmly opposed measures that might restrict
its ability to acquire conventional arms. Its action in
torpedoing Japan's General Assembly CAT resolution in
late 1976 was consistent with this stance. By way of
justification, Indian spokesmen argue that CAT restraints
are inherently discriminatory because they reinforce the
advantage enjoyed by states that produce their own weapons
and ensure the continued vulnerability of those that do
not. New Delhi further contends that proposals for limit-
ing conventional arms transfers are often advanced by
nuclear-weapons states to divert attention from nuclear
disarmament.
India is a major purchaser of arms and has a grow-
ing capacity to manufacture military materiel. At present
its defense industries produce several major weapon systems,
but much of India's domestic weapons output is produced
under foreign licenses, almost entirely from the Soviet
Union. In addition, the growth and improvement of the
Indian armed forces depend on substantial direct imports
of Soviet weapons. India is attempting to expand its
defense industry and diversify its sources of supply in
order to reduce this dependence. Nevertheless, it will
probably continue to rely on substantial Soviet military
assistance for equipment, spare parts, and technology
for at least another decade.
Security concerns firmly grounded in regional ten-
sions provide the principal motivation for India's efforts
to build up its military arsenal. India and Pakistan have
fought three wars since becoming independent in 1947; India
and China fought a border war in 1962. Although relations
with both Pakistan and China have improved recently, New
Delhi continues to regard its neighbors as potential
threats.
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Indian military capabilities are also important in
connection with the country's regional aspirations.
India has long considered itself the natural leader of
the subcontinent, and it believes that its victory over
Pakistan in the 1971-72 war that resulted in the independ-
ence of Bangladesh confirmed this role. Similarly, it
believes that maintenance of its current military pre-
eminence in South Asia is essential to preserve its
position.
Finally, New Delhi regards military might as a means
for enhancing its status as a leader of the Third World.
India was one of the charter members of the Nonaligned
Movement. More recently, it has played an active role
in the Group of 77 and has been an outspoken advocate of
solidarity among the developing nations. It has, however,
taken a generally conciliatory approach in the North-South
dialogue.
Although the new Indian Government has given no
evidence of being less opposed to generalized CAT limita-
tions than its predecessor, the present Prime Minister has
welcomed Washington's efforts to restrain US arms transfers.
India does not receive military equipment from the US,
but Pakistan does. Hence, as illustrated by Washington's
recent refusal to sell A-7 aircraft to Pakistan, the US
restraints effectively favor India by reducing Pakistan's
access to Western arms while not constraining Indian
options.
In sum, Indian opposition to CAT curbs (except those
that clearly disadvantage a potential enemy) promises
to persist. As in the past, however, New Delhi will prob-
ably claim to be championing the moral and political rights
of all LDCs.
Malaysia
The Malaysian Government has yet to manifest a clear
position on CAT curbs. It is, however, an outspoken
advocate of a Southeast Asian zone of peace, freedom, and
neutrality--a scheme that it hopes would remove that region
from the arena of great power rivalry. Since Kuala Lumpur
probably recognizes that the regulation of international
arms transfers could facilitate realization of that vision,
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it may favor some restraints on "escalatory" transfers
on the assumption that such restrictions would not adversely
affect its own ability to purchase military equipment
abroad.
This last qualification is important. Malaysia main-
tains a relatively low military profile, but like other
members of the Association of Southeast Asian Nations
(ASEAN), it is plagued by an incipient Communist insur-
gency and is therefore determined to secure a continuing
supply of the materiel it requires for internal security.*
Although the Malaysian Government appears to have the
situation well under control, it--and its ASEAN allies--
are sensitive to the potential threat the various South-
east Asian insurgencies pose for regional stability. In-
deed, following the Communist victories in Indochina,
ASEAN members expressed considerable anxiety over the
possibility that an aggressive Vietnam might employ cap-
tured American arms to assist revolutionary movements in
neighboring countries. Even though this particular concern
appears to have decreased, Kuala Lumpur has launched a
drive to build up its conventional forces, including its
amphibious warfare capability.
Malaysia is increasingly shifting its basic military
purchases from the UK to the US. Kuala Lumpur is currently
considering the purchase of additional F-5 fighters from
the US to supplement the fleet of 16 F5-Es they acquired
under a small Foreign Military Sales program in 1972.**
In addition, Malaysia acquires some small arms and ammuni-
tion from its regional partners and has expressed interest
in developing a coordinated ASEAN regional arms production
scheme.
Whatever Kuala Lumpur's natural inclinations with
respect to CAT curbs may be, however, they may not be
fully reflected in the behavior of the Malaysian delectation
to the Special Session on Disarmament. Malaysia is the
only member of ASEAN on the SSOD preparatory committee
*ASEAN members are Indonesia, Malaysia, the Philippines,
Singapore, and Thailand.
-'These aircraft constitute its most sophisticated equip-
ment and are employed in operations against Communist
strongholds along the northern border.
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and is thus likely to feel constrained to represent the
interests of the regional grouping as a whole, rather
than its own. Within ASEAN, Indonesia and the Philippines
both import large quantities of military equipment. Manila
has thus far managed to overcome US curbs on conventional
arms transfers through exploitation of US interest in
maintaining military bases in the Philippines. Jakarta,
on the other hand, has been shopping around for arms to
offset decreasing military supplies from the US. Although
Indonesia and the Philippines--like Malaysia--generally
adopt moderate positions in multilateral forums, they can
be expected to join radical LDC opposition to measures
that might lead to international regulation of their
conventional arms acquisitions.
ASEAN and G-77 solidarity are both very important
to Malaysia. The interests of the regional grouping and
the larger LDC caucus coincide in this case, a coincidence
that will increase the likelihood that Malaysia will oppose
any broadly conceived attempts to regulate conventional
arms transfers that may emerge at the Special Session.
Conclusions and Implications
The difficulty of developing a constructive dialogue
on CAT restraints at the SSOD will be compounded by the
global nature of the forum. The chemistry of such
gatherings generally prompts most LDCs to place a high
priority on maintaining a solid front in defense of their
interests against the industrialized states. Under these
circumstances, efforts to incorporate language in the
final conference document that indirectly implies LDC
coresponsibility for both the CAT problem and its solution
may meet with stiff resistance. Similarly, predictable
LDC attempts to link CAT to other--and from the US point
of view, more sensitive--aspects of the disarmament
issue (e.g., MBFR and SALT) could be particularly trouble-
some.
The post-SSOD period will offer opportunities for
potentially more productive bilateral discussions on CAT
with key LDCs. The climate for these talks might be
measurably improved if some movement could be demonstrated
in East-West arms control negotiations. Even so, progress
is likely to be slow. In particular, the US objective of
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promoting effective regional agreements to restrict arms
imports--which could then be "honored" by major arms
suppliers--is likely to remain elusive until ways can be
found to ease local tensions and to narrow the gap be-
tween the perceptions and interests of the LDCs and those
of the industrialized states with respect to curbing trans-
fers of conventional arms.
As indicated earlier, the costs to other US interests
of lingering LDC resentment over seemingly discriminatory
supplier restraints and cartels could be high. But be-
cause of the diversity of LDC problems and interests, some
of these costs can probably be averted or much reduced
through trade-offs and diplomacy. Designing and imple-
menting such a strategy will be one of the more challeng-
ing problems faced by US policymakers in the years just
ahead.
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The International Nuclear Fuel Cycle Evaluation:
A Preliminary Assessment
The International Nuclear Fuel Cycle Evaluation
(.INFCE), a US initiative to bolster nonproliferation through a
comprehensive review of alternate nuclear power systems,
has moved into the technical studies phase of its two-
year mandate. The eight technical "working groups"* set
up by the 40-nation Washington Conference in October are
well into their assignments of reviewing particular stages
of the nuclear fuel cycle. In December, the Technical
Coordinating Committee, which is composed of the 22 nations
charged with directing specific technical studies, set
forth a formal work schedule and selected a temporary
chairman.
INFCE, like US nonproliferation policy generaZZy,
generated considerable foreign skepticism when first pro-
posed last April. Many countries--developed and develop-
ing alike--saw the proposal as an effort by the US to
vindicate its own opposition to the "plutonium economy"
of fast breeder reactors and spent fuel reprocessing.
Such sentiment has dissipated somewhat in the wake of the
October conference. Participants agreed that INFCE would
be restricted to technical considerations, would not in-
terfere with existing national energy programs, and would
not make binding decisions. Its membership was broadened
to include current and potential nuclear consumers from
advanced and developing nations.
In sum, INFCE has gained a measure of acceptance as
a technical forum with a potential for resolving some of
the tough problems facing the countries using nuclear
reactors to generate power. But lingering political doubts
*The working groups are on fuel and heavy water avail-
ability; enrichment availability; assurances of long-term
supply of technology, fuel, and heavy water and services;
reprocessing, plutonium handling, and recycling; fast
breeders; spent fuel management; waste management and
disposal; and advanced fuel cycle and reactor concepts.
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about the ultimate objectives of the evaluation are work-
ing to undercut its usefulness in fostering nonprolifera-
tion.
Nearly all countries profess an awareness of the
dangers posed by totally unfettered commerce in nuclear
equipment and technology. For many, however, the need
to ensure long-term energy needs and orderly economic
development more than offsets the perceived risks of
weapons proliferation engendered in the use of nuclear-
generated power. In fact, the energy deficient countries
increasingly equate assurance of energy supplies with
national security and view with alarm any effort to tamper
with their control over such supplies.
The advanced nations--especially Japan and those
West European countries that depend heavily on imported
energy sources--show little inclination to abandon their
huge investments in fast breeder technology and recycled
fuel management systems. Such capabilities are seen as
their best hedge against a 1973-style energy embargo---be
it from an oil or a uranium cartel. The developing
countries are equally determined not to let a monopoly
of the so-called new nuclear technology be used by the
advanced countries to maintain their edge in economic
and political relations with the Third World.
Many countries continue to harbor suspicions that
INFCE is an effort by the major nuclear suppliers--chiefly
the US and Canada--to legitimize unilateral changes in
international nuclear agreements. This perception has
been strongly reinforced by current US and Canadian in-
sistence on the renegotiation of existing nuclear agree-
ments as a precondition for continued nuclear supplies.
Particularly unsettling has been the North Americans"
willingness to use restrictive measures--such as export
embargoes--to force compliance.
The Key Issues
One of the key issues under evaluation is the re-
processing of spent nuclear fuel, which many West European
governments and Japan see as currently the most feasible
waste management strategy. The prevailing view of these
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governments holds that by separating the contaminated
waste into constituent parts, the residue is rendered
more manageable for handling and storage purposes. This
also eliminates the need for continued storage of large
amounts of spent fuel.
More important to advocates of energy independence,
however, is the fact that reprocessing--by enabling nu-
clear fuel to be recycled--helps to reduce dependence on
imported sources. The EC countries depend on imports
for 80 percent of their uranium supplies. Moreover, re-
processing provides feedstocks for the new generation of
fast breeder reactors expected in the next decade. Such
considerations are behind recent OECD recommendations
to member states to choose reprocessing over the "throw-
away" or storage methods.
The continued development of the plutonium-fueled
fast breeder reactor is another major issue. The West
European states (notably the French and West Germans),
Japan, and the USSR are putting heavy stress on fast
breeders to meet future energy needs. A prime selling
point for the fast breeders, according to the EC, is their
ability to use uranium 60 times more efficiently than the
reactors currently in use. Breeder development has been
given further impetus in the energy-deficient EC countries
by estimates that uranium stocks may be largely used up by
the late 1990s--little more than a decade after a sus-
tained shortage of oil supplies is forecast.
The proliferation dangers of such a so-called plu-
tonium economy are seen as less problematic than the
dangers of interruptible and/or high cost foreign energy
supplies. The French, who along with the Soviets have
made the heaviest investment in fast breeder technology,
claim that fast-breeders are needed for viable commercial
nuclear power. Such sentiments strike a responsive chord
among other West Europeans and the Japanese,'who depend
on imports for 90 percent of their energy needs.
The Quest for Parity
The developing countries see INFCE as another barrier
to their efforts to gain economic and political parity
with the advanced nations. For many--such as Argentina
and Pakistan--the primary issue is access to assistance
for developing their own nuclear program.
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Many developing countries have long argued that the
major nuclear suppliers' group--the so-called London Club--
is in effect a cartel that has arbitrarily constrained
commerce in nuclear dealings for economic reasons. The
greater the emphasis on nonproliferation requirements,
in this view, the more it appears that the suppliers are
buttressing the advantage they already hold.
The developing countries believe that the technical
judgments in the working groups may have great influence
on the transfer of technology and the provision of nuclear
fuel and other supplies. As a result, they have pressed
for broad participation in order to wield maximum influence
on the outcome of INFCE.
There is also the question of international "trust"
and national sovereignty. Stong resentment persists in
some quarters over what is seen as the nuclear powers'
efforts to maintain complete fuel cycles while denying
similar options to others on the basis of nonprolifera-
tion concerns. The developing countries believe that
there should be equal participation in all facets of
the nuclear business, from the enforcement of safeguards
in the IAEA to the conduct of nuclear commerce in the
London Club.
Expectations
Most countries expect INFCE to result in an unquali-
fied affirmation of nuclear power as an energy resource.
The major industrial countries--Western Europe, Japan, the
USSR--will work hard to get their national energy priori-
ties vindicated in the technical studies. The French
and the West Germans, for example, are looking for a
go-ahead for fast breeders and reprocessing. Japan hopes
to get favorable results on uranium enrichment and assured
fuel supplies. For the Soviets, better and more efficient
waste management methods would fill a major gap in their
nuclear power system.
Both advanced and developing countries want some sort
of a guarantee of nondiscrimination. Some developing
countries appear willing at least to consider forgoing
the acquisition of the more sophisticated parts of the
nuclear fuel cycle--reprocessing and fuel enrichment--if
they can get assurances of continued technical assistance.
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As with the industrial countries, perceived national energy
interests are likely to weigh heavily in an individual
country's attitude toward the outcome of the evaluation.
There is support for the US-proposed concept of re-
gional nuclear fuel cycle centers as a way to resolve some
of the proliferation concerns arising from the spread of
fuel enrichment and reprocessing technologies. Such
centers are especially attractive to the smaller West
European states, such as the Netherlands and Sweden,
which cannot afford to build self-sufficient nuclear
power systems. These countries are reluctant to continue
their dependence on waste disposal arrangements that give
other nations control over material for nuclear weapons.
Regional nuclear centers are also seen as a way to
satisfy the demands by both advanced and developing coun-
tries for assured supplies and technical assistance. The
West Europeans generally favor this approach, but the
Latin American and some Asian countries are reluctant
to commit themselves unless the centers are truly multi-
national in control and operation. Some insist that it
would be necessary to place the centers in neutral loca-
tions if the nuclear powers are not to retain undue in-
fluence.
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The UNCTAD Integrated Program for Commodities:
Progress and Outlook
The UN Conference on Trade and Development integrated
program for commodities is to include both a common fund
and individual international commodity agreements (ICAs).
Since the common fund talks are temporarily suspended,
attention will focus increasingly on the ICA negotiations.
Because the two sets of negotiations involve significantly
different LDC participants and interests, the progress
that is likely in the months ahead on the ICA talks will
not facilitate agreement on the common fund.
The Integrated Program for Commodities
An integrated program to improve substantially the
terms of trade for those basic commodities that form a
large percentage of LDC exports was formally called for
by the UN General Assembly in 1974. At UNCTAD IV in May
1976, it was decided that a negotiating conference on
implementing the integrated program would be convened by
the end of 1978, and a series of preparatory commodity
consultations held before February 1978.
The UNCTAD IV resolution outlined six elements for
an effective integrated program, but attention has con-
centrated on the two that the developed states seem most
likely to accept--the common fund and the ICAs. The fact
that the Group of 77 (the developing nations' caucus) has
chosen to put off the other four elements of the original
integrated program resolution (most notably, an indexation
mechanism) makes them all the more determined to achieve
the common fund and the ICAs.
The common fund conferences in March and November-
December 1977 failed to reach agreement on the role and
financing of the fund. A series of consumer-producer
meetings have been held on most of the 18 commodities
scheduled for ICAs. With the exception of the recent
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agreement on sugar and a likely one on rubber next month,
discussions are still in the preparatory stage and will
not be completed by the February 1978 deadline.
The common fund and the ICAs interest quite different
groups of developing countries. The ICA negotiations
involve primarily the relatively wealthy, politically
moderate commodity producers of the Group of 77. The
poor, commodity-consuming majority of developing countries
do not stand to benefit from the ICAs and have placed their
hopes on a common fund that would play a major economic
development role.
The Common Fund*
Many moderate LDCs have serious doubts about the
economic feasibility of the common fund, but they are also
committed to Group of 77 unity. They have therefore
gone along with the hardline poorer LDCs' demands that
the common fund be financed by direct government con-
tributions and fund "other measures" such as export
diversification, infrastructure development, and market
promotion. When the industrial states refused to accept
those provisions, the Group of 77 suspended the November-
December UNCTAD conference and secured the passage of a
UN General Assembly resolution that reiterated its de-
mands and blamed the developed states for the failure
of the talks.
Both sides now appear quite happy to accept a rather
lengthy cooling-off period in order to enhance the chances
for agreement if and when the common fund talks resume.
The Group of 77 resolution adopted in the General Assembly
set no specific date for resumption, but directed the
UNCTAD Secretary General to undertake consultations early
in 1978 to assess the prospects for resuming the talks.
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Further consultations will include bilateral exchanges,
a Group of 77 "roving mission" to key industrial nations,
and a ministerial meeting of Group of 77 members in March.
The Group of 77 will probably also use the UNCTAD Trade
and Development Board ministerial meeting in March to
give a political boost to common fund negotiations. Both
LDC and industrial state observers now expect that formal
negotiations will resume in late 1978.
The International Commodity Agreements
Although many LDCs warn that the failure thus far
to reach agreement on the common fund will jeopardize
the ICA negotiations, that is not. likely to be the case.
On the contrary, the temporary moratorium on the common
fund negotiations will allow increased concentration on
the ICAs. Preparatory meetings between producer and
consumer nations will continue at a rapid rate. Emphasis
will be placed on dispensing with time-consuming studies
and on proceeding toward the anticipated negotiating
stage for at least several commodities--rubber, jute,
and tea are most likely.
Whereas the common fund negotiations often had a
political and confrontational tone, moderation will
probably prevail at the ICA meetings, since many of the
Group of 77 participants in these talks are wealthier,
commodity-producing countries. They are concerned with
their vital interests as producers, have developed the
expertise to deal effectively with the economic and
technical issues involved, and are moderate on most
North-South economic issues. Hence, they are not likely
to politicize the atmosphere of the commodity talks over
the common fund or any other general North-South question.
The industrial states will as usual be concerned with
limiting the economic costs of any agreement. But, they
do not view the ICAs as the "bottomless pit" they fore-
see in the commond fund and would like to enhance their
reputation for responsiveness to LDCs by agreement on
the ICAs.
The expected progress on ICAs is not likely to ease
the pressure on the industrial states in regard to the
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common fund. The establishment of ICAs would only in-
crease the insistence of the poor, commodity-consuming
majority of LDCs that a common fund be implemented that
would further some of their interests, most notably
through the financing of "other measures."
Most developed countries do not want a common fund,
but are unwilling to take the economic and political
risks associated with opposing all LDCs on the issue.
They therefore now seem willing to accept a common fund
with limited direct government contributions and volun-
tary financing of other measures. These concessions
would fall short of the hardliners` demands, but would
probably eventually be accepted by the Group of 77, since
the LDCs recognize that domestic economic constraints
effectively prevent the industrial countries from grant-
ing anything more at this time. In addition, LDC leaders
believe that these concessions would constitute an opening
wedge for more substantial mandatory funding arrangements
in the future. F7 I
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UN General Assembly: The Byword Was Cooperation
Previous articles in this publication
ave iscusse the emerging pragmatic
approach to multilateral negotiations with the
industrial states and the underlying tensions that could
spark a return to confrontation. This article describes
how these trends were manifested in the 32nd UN General
Assembly.
Compared to most recent sessions, the 1977 General
Assembly was largely free of acrimonious contention
between the LDCs as a bloc and the industrial states.
In most cases, even the usuaZZy divisive issues (such
as the Middle East, southern Africa, economic development,
and disarmament) were debated in an atmosphere of accom-
modation.
Forthcoming UN meetings between LDCs and industrial
states are likely to benefit from this conciliatory
spirit. The 6-10 March UNCTAD session on debt relief
will not resolve that issue to the LDCs' satisfaction?
but it is unlikely to spark a return to confrontation;,
partly because the developing countries tack a unified
position on the issue. The cooperative tone of the
disarmament debates in the General Assembly should also
carry over, at least initially, to the May Special Ses-
sion on Disarmament.
Although both the developing and the industrial
states are striving for acceptable compromises on the
issues in contention, the atmosphere is still fragile.
Over time, the considerable gap between LDC expecta-
tions and demands and the concessions most industrial
states are willing to make will probably increasingly
strain relations between them.
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Although the General Assembly is often used as a
forum in which to vent LDC hostility and frustration,
this year's deliberations reflected a search for prac-
tical solutions through give-and-take bargaining that
has characterized negotiations between developing and
industrial states over the past year. Even especially
divisive issues were debated in a tentative spirit of
cooperation--albeit sometimes quite heatedly.
Several factors contributed to the conciliatory
mood evident at this session. Among them are the more
flexible attitudes among major industrial states toward
meeting some aspects of LDC demands for a new interna-
tional economic order, seeming progress outside the UN
system on the Middle East question, and the greater con-
cern among non-OPEC LDCs about their immediate economic
future and thus their need to mend fences with the
industrial states.
This session opened in the wake of what most LDCs
viewed as a disappointing conclusion to the Paris Con-
ference on International Economic Cooperation (CIEC).
But the LDC polemics that some observers expected to
surface in the General Assembly as an expression of this
disappointment never materialized. Through the 18 months
of CIEC and other negotiations, some LDCs developed
a sharpened sense of give-and-take bargaining, and many
came to realize that confrontational tactics only polar-
ized attitudes and delayed desired agreements. Addi-
tionally, LDCs obtained some concessions from the in-
dustrial group at CIEC and generally wished to preserve
an atmosphere of cooperation. At the General Assembly,
behind-the-scenes bargaining paid off on many issues,
allowing nearly two-thirds of the more than 200 resolu-
tions adopted to be approved by consensus, thus indi-
cating that the wording of many resolutions was ac-
ceptable (or at least not offensive) to a majority of
the members.
The UN has not been effective in dealing with such
problems as southern Africa or the Middle East and has
often served only as a forum for radical rhetoric. The
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exasperation felt by the Arabs and black Africans on
the lack of progress in negotiations involving the parties
usually resulted in inflammatory resolutions in the UN
that allowed no bargaining room and served only to strain
relations between the LDCs and industrial states. Addi-
tionally, the tensions engendered often affected debates
on other issues. In the wake of a sweeping crackdown in
October 1977 by the South African Government on the black
consciousness movement, however, the Security Council for
the first time voted mandatory sanctions against a UN
member. The arms embargo against South Africa that finally
emerged from Council deliberations was seen by most black
African members as a significant and positive first step.
The atmosphere in which the Middle East issues
were debated was probably the least cooperative.
But unlike 1975, when the "Zionism is Racism" resolu-
tion brought strong reaction from Western states, this
year the resolutions critical of Israel and favoring
Palestinian political rights did not divide the Assembly.
A major factor in.the diminished impact of the anti-
Israeli resolutions was the split in Arab ranks between
the moderates and the hard-liners. Some Arab states
understand that the Assembly is not the forum for set-
tling that dispute and may have been concerned that
inflammatory resolutions might interfere with negotia-
tions occurring outside the UN.
North-South Issues
.Economic development issues were largely debated
in a cooperative mood. The suspension by the LDCs of
the Geneva common fund negotiations on 1 December, how-
ever, somewhat spoiled the atmosphere. Angry members
of the LDC caucus initially proposed a resolution
reiterating their demands and criticizing the "recal-
citrant" industrial states. After informal discussions
between representatives at the UN, the final resolution--
although still critical of the industrial states--was
softer in tone, and its primary objective was the resump-
tion of the negotiations.
The question of establishing a mechanism within the
UN to oversee North-South economic negotiations also
posed a North-South clash of interest. Most members
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agreed that the dialogue opened at CIEC should continue
under UN auspices, but disagreed over the size and
authority of any monitoring body. The developing coun-
tries want to give the General Assembly--through a
committee of the whole--political control over various
negotiations now conducted in specialized agencies.
The industrialized states were concerned that such a
mandate would give the committee too much control and
possibly impede technical negotiations. Ultimately,
the industrial states agreed to the structure proposed
by the LDCs and to a carefully worded mandate, but the
agenda and procedures of the committee remain to be de-
fined. The new body brings the dialogue back into the
UN system, though agreement on the issues depends more
on political decisions by the industrial countries than
on the creation of new consultative mechanisms. Never-
theless, the overview committee represents a serious at-
tempt to keep the dialogue on a constructive path.
The scope and complexity of economic and social
problems confronting the UN, along with pressures for
fiscal austerity, prompted a study to rationalize UN
management of development assistance. After two years
of difficult negotiations, an ad hoc committee sub-
mitted its proposals to streamline and strengthen the
economic and social sectors of the organization. Until
almost the last day of the Assembly, the differences in
both the perceptions and the needs between LDCs and
the industrialized states seemed insurmountable.
A particularly contentious issue was the creation
of a high-level Secretariat position to oversee economic
matters--a position some industrial states feared would
become an economic czar.* Even though the implementation
of the committee's proposals remains to be negotiated,
the Assembly's acceptance of the recommendations and
the creation of a position indicates the importance
both the LDCs and the industrial states attach to mak-
ing the UN system better able to deal with development
problems in a comprehensive and effective manner.
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Other Issues
The Assembly, in the wake of the October JAL and
Lufthansa hijackings, adopted a resolution condemning
hijackings and calling for ratification of three exist-
ing conventions on hijacking. While several amendments
sponsored by Third World nations altered the tone of
the Western-initiated resolution, its passage underscored
a growing trend toward cooperation against terrorism.
Whereas previous disarmament discussions produced
desultory debate and LDC-sponsored resolutions aimed at
pressuring the major powers to disarm, this year the LDCs
were heartened by signs of progress in disarmament nego-
tiations between the US and the USSR. Resolutions on
such important issues as SALT and a comprehensive nuclear
test ban were adopted for the first time practically
unanimously. An additional motivation for calm in the
debates was the strong desire to avoid hardening att_i'-
tudes before the May-June Special Session on Disarma-
ment.
Some familiar issues that continually plague the
UN also seemed to benefit from the positive atmosphere.
Continuing negotiations by the five Western members of
the Security Council seemed to produce some positive
results on the question of Namibia, while pressure
for a Rhodesian settlement was intensified. Although
the creation of a post of high commissioner for human
rights was deferred, and only slight progress was made
in broadening criticism of human rights violations, the
atmosphere in which the issues were debated had improved,
and the gap of misunderstanding between the industrial
countries and the LDCs seemed smaller. Whether this
represents real change or simply a desire not to disrupt
the "tranquility" of the session will become apparent at
the forthcoming Human Rights Commission meeting.
Although the tone of multilateral politics at the
Assembly tends to reflect general trends in international
relations, it would be misleading to assume that a quiet
session indicates that the underlying tensions between
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the LDCs and the industrial states have eased. The ne-
gotiations in the months ahead will test the patience
of both groups. In the short term, an accommodating
spirit will probably prevail. In the longer term, how-
ever, a deterioration in the economic situation or LDC
perceptions of lack of progress in obtaining greater
political authority over international institutions may
contribute to a belief that cooperation has not achieved
satisfactory results. Under these circumstances, the
General Assembly overview committee for North-South
issues could become a forum for LDC criticism of indus-
trial countries, rather than a body for maintaining the
dialogue between the two sides.
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