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54. The fact that these costs remain hidden means that developing countries are able to attract more investment to export manufactured goods than they would under a more rigorous system of global environmental control. Many Third World policymakers see this as beneficial in that it gives developing countries a comparative advantage in 'pollution-intensive' goods that should be exploited. They also see that passing along more of the real costs could reduce the competitive position of their country in some markets, and thus regard any pressure in this direction as a form of disguised protectionism from established producers Yet it is in developing countries' own long-term interests that more of the environmental and resource costs associated with production be reflected in prices. Such changes must come from, the developing countries themselves.
2.4 The Mandates of Multilateral Trade Forums
55. Although a number of UNCTAD research projects have considered the links between trade and environment, these issues have not been taken up systematically by intergovernmental organizations. The mandates of these organizations – principally GATT and UNCTAD – should include sustainable development. Their activities should reflect concern with the impacts of trading patterns on the environment and the need for more effective instruments to integrate environment and development concerns into international trading arrangements.
56. International organisations dealing with trade will find it easier to reorientate their activities of each nation designates a lead agency with a broad mandate to assess the effects of international trade on sustaining the environmental and resource base of economic growth. This agency could be responsible for raising sustainability issues in the work of UNCTAD, GATT, OECD, CNEA, and other relevant organizations.
3. Ensuring Responsibility in Transnational Investment
57. Overseas investment activity by companies in market economies has grown substantially over the past 40 years. (See Box 3–3.) Foreign affiliates now account for 40 per cent of sales. 33 per cent of net assets, and 56 per cent of net earnings for 380 of the largest industrial corporations in the market economies, according to data compiled by the UN Centre for Transnational Corporations.[1] A high proportion of transnational investment is within industrial market economies, another aspect of the growing integration of these economies.
58. Transnationals play an important role as owners, as partners in joint ventures, and as suppliers of technology in the mining and manufacturing sectors in many developing countries, especially in such environmentally sensitive areas as petroleum, chemicals, metals, paper, and automobiles. They also dominate world trade in many primary commodities.
59. In recent years, many developing countries have begum, to take a more positive view of the role TNC investment can play in
- ↑ UN Centre on Transnational Corporations. Transnational Corporations in World Development Third Survey (New York: UN. 1986)
