UNCTC Evolution

The initiative to create a Programme on Transnational Corporations and, in particular, to formulate a Code of Conduct on Transnational Corporations, was part of a broader drive towards the establishment of a New International Economic Order (NIEO). The objectives set by the NIEO through United Nations resolutions on the Code of Conduct reflected the general perceptions of the time, triggered by political and economic events. The focus was on controlling the political ad economic activities of TNCs, out of the concern of developing countries about their sovereignty.

The work of UNCTC and the Commission on Transnational Corporations was also affected by the cold war climate of confrontation and mistrust. In the 1980s, the focus of attention increasingly changed towards the positive impacts of FDI and TNCs on development. This change in attitude towards TNCs contributed to the stalling of the Code negotiations in the Commission on Transnational Corporations.

Regarding UNCTC, its work reflected the changing times and became more focused on the positive, rather than the negative, effects of FDI and TNCs. Thus, UNCTC continued its work to address the needs of developing countries but in a context in which they were unilaterally opening up to FDI. The questions addressed in its analytical work revolved around how to attract FDI and benefit from it. The proliferation of bilateral and regional investment agreements and the launching of the Uruguay Round of Multilateral Trade Negotiations under GATT -- with the inclusion of new projects to negotiate international agreements on trade in services, on trade-related investment measures and on trade related aspects of intellectual property rights -- provided a new impetus and orientation to the work of UNCTC towards assisting developing countries in the negotiation of these agreements.

UNCTC was thus able to contribute its wealth of experience in dealing with FDI and TNC issues and international negotiations. As part of the reorganization of the economic sector of the UN,  the UNCTC was dissolved in 1993 and the Programme on TNCs was transferred to UNCTAD where it continues to grow and develop according to the needs and priorities of the international community. The work on FDI at UNCTAD is complemented by work on technology and enterprise development.