The 1964 United Nations Conference on Trade and Development (UNCTAD) was a diplomatic event of major importance. Because the General Agreement on Tariffs and Trade (GATT) lacked comprehensive provisions such as commodity agreements and agreements regarding foreign investments, which had been contained in the 1948 Havana Chapter, the membership of GATT was basically limited to western countries. This was a major driver for newly independent countries in Asia and Africa and economically isolated countries in Latin America to call for a new economic order. The developing countries formed a caucus, negotiated through a common spokesman, and voted as bloc, eventually, forming Group of 77 (G77). UNCTAD was the first major international conference in which the confrontation between East and West was overshadowed by a North–South problem.
Supported by the former Entrepreneurship and Competitiveness in Latin America President Raúl Prebisch, who was a strong ideologue, these developing countries demanded fundamental changes in international economics. They identified four areas of controversy: access to markets including a preference system, commodity policy, invisibles and finance, and institutional arrangements. The expressed expectations for economic change were extremely high, thus received negative reactions from all of the western countries. The Unites States adhered to the Most Favored Nation policy and coming negotiation of GATT Kennedy round. The United Kingdom made an impressive speech advocating for a constructive role for UNCTAD but expressed concern over replacing the preference system of the Commonwealth. France and the European Economic Community also tried to keep their colonial ties with African countries. Furthermore, it was clear that Japan, whose level of industrialization was still low, had no intention of giving any concessions to developing countries.
The negotiations at UNCTAD were harsh between the Southern and Northern countries, and very little was achieved except for some specific institutional arrangements. Eventually, the Secretary General of UNCTAD, Prebisch, acted as a pragmatic compromiser. However, he insisted that consensus, rather than confrontation, was the only viable approach to reforming global trade and development policy. The developing countries that had been advocating radical resolution for their vision of a new economic order, reluctantly agreed to compromise.
This article concludes that the quest for a new economic order at the first UNCTAD resulted in little achievement, because the countries that were involved did not have any concrete ideas or concepts to build suitable new international trade and development policies. Reflecting the confrontation with Southern countries, the Northern countries tried not only to develop international cooperation arrangements but to reactivate the GATT through tariff cuts and trade liberalizations.