Courtesy Reuters

A World of Preferences

Virtually last among the world's major industrial nations-but by no means least-the United States has now agreed to offer some form of tariff preferences to imports from developing countries. President Nixon's Latin American policy address last October, followed by his statement on November 10, signaled what amounts to a major shift in U.S. policy by calling for a broad system of generalized preferences, with the proviso that if this cannot be achieved, the United States may extend regional preferences to Latin America alone.

The President's statements represent a significant departure from earlier U.S. views. When the less developed countries (LDCs) raised this issue as their major demand at the first U.N. Conference on Trade and Development in 1964, the United States-unlike the majority of the world's other rich nations-was resolutely opposed. Indeed, George Ball, then Undersecretary of State and Chief U.S. Delegate to the Conference, left little doubt about the intention of the United States to resist what he considered a policy shift unrelated to real economic development needs and undesirable from almost every other economic, political and commercial policy standpoint.

In subsequent years, U.S. opposition notwithstanding, the pressure for preferences as a major means by which the rich nations would contribute to economic development in Latin America, Africa and Asia grew more insistent. It remained the single most important question debated at the second U.N. Conference at New Delhi and was pressed by Latin American countries in regional councils and in meetings with U.S. officials.

During the last two or three years, under mounting pressure and increasingly isolated from developed and developing countries alike, the United States gradually shifted its position. As the world's most important industrial nation, virtually alone in opposition to the LDCs' insistent demands, with various regional preference arrangements a fait accompli and facing the threat of undesirable extensions, Washington found itself in an increasingly onerous and untenable situation. Hence, when a Special Committee on Preferences was created within the OECD after

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