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ACTION IO-10
INFO OCT-01 ISO-00 IOE-00 AF-06 ARA-06 EA-06 EUR-12 NEA-09
SSO-00 NSCE-00 USIE-00 INRE-00 SP-02 AID-05 EB-07
NSC-05 CIEP-01 TRSE-00 SS-15 STR-01 OMB-01 CEA-01 L-02
H-02 PA-01 PRS-01 CIAE-00 INR-07 NSAE-00 COME-00
FTC-01 JUSE-00 /102 W
--------------------- 124509
O 191613Z MAR 75
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC IMMEDIATE 9573
LIMITED OFFICIAL USE USUN 886
E.O. 11652: N/A
TAGS: EINV, UN
SUB: UN COMMISSION ON TRANSNATIONAL CORPORATIONS
1. BRIEF OPENING SESSION OF COMMISSION HELD MORNING
MARCH 17. AFTER SHORT STATEMENT BY UN UNDER SECRETARY-
GENERAL VAN LAETHEM, THE INDIA REPRESENTATIVE, R.S. BHATT,
CHAIRMAN, INDIA INVESTMENT CENTER, WAS ELECTED CHAIRMAN OF
THE COMMISSION. AGENDA WAS ADOPTED AS PROPOSED.
2. R.H. WYNDHAM, A MEMBER OF THE AUSTRALIA PERMANENT
MISSION TO THE UN WAS SELECTED TO BE THE WEO CANDIDATE FOR
RAPPORTEUR OF THE COMMISSION. US DEL EFFORTS TO INTEREST
GERMAN DELEGATE, EBERHARD GUNTHER, IN THE JOB WERE UNAVAILING.
GREEK DELEGATE, ANGELOS ANGELOPOULOS, HAD PERMITTED HIS NAME
TO BE PUT FORWARD BUT SUDDENLY WITHDREW IN FAVOR OF WYNDHAM.
3. IN SECOND MEETING TUESDAY MORNING, COMMISSION ELECTED
VICE-PRESIDENTS ERGENEY MATEEV (BULGARIA), JUAN MANUEL
FIGUERERO (ARGENTINA), AND LOUIS K. MWANGAGURUNGA (UGANDA)
AND RAPPORTEUR WYNDHAM. US NOMINATED FIGUERERO AT HIS
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REQUEST.
4. BHATT THEN SUBMITTED FOR DISCUSSION PROPOSAL THAT
COMMISSION BREAK UP INTO FOUR WORKING GROUPS DURING
AFTERNOON MEETINGS TO DISCUSS FOUR MAJOR ISSUES BEFORE
COMMISSION: (1) SECTORAL STUDIES (BANKING, INSURANCE,
TOURISM, ETC.,; (2) CASE STUDIES; (3) CODE OF CONDUCT
FOR TNCS; AND (4) WORK OF THE INFORMATION AND RESEARCH
CENTER. THIS PROPOSAL WAS RESISTED BY MOST DELEGATES AS
PREMATURE, INCLUDING THE 77 WHO EVIDENTLY ARE NOT WELL
PREPARED FOR MEETING.
5. WE ARE PLEASED WITH STANCE TAKEN SO FAR BY MOST WEO
REPRESENTATIVES; EVEN AUSTRALIA AND CANADA HAVE BEEN CON-
STRUCTIVE (CANADA NOTED DELICATELY, HOWEVER, THAT CODE OF
CONDUCT SHOULD "AVOID ENCOURAGING THE EXTRATERRITORIAL
APPLICATION OF LAWS.") AUSTRALIA NOTED THAT, IN AREAS
SUCH AS RESTRICTIVE BUSINESS PRACTICES AND CONSUMER PRO-
TECTION, LAWS SHOULD APPLY EQUALLY TO DOMESTIC AND FOREIGN
CORPORATIONS. JAPAN HAS NOT YET SAID A WORD. SWEDEN, HOW-
EVER, CAME OUT WITH STRONG STATEMENT EMPHASIZING NEED FOR
CODE OF CONDUCT APPLICABLE TO TNCS (ALTHOUGH ACKNOWLEDGING
POSSIBILITY OF SOME GENERAL DISCUSSION OF PRINCIPLES FOR
GOVERNMENTS TOO), AND TECHNICAL COOPERATION. SWEDEN ALSO
OPPOSED VIEW OF MANY WEOS THAT INFORMATION CENTRE SHOULD BEGIN
WITH REVIEW OF EXISTING DATA, ARGUING THAT AVAILABLE MATERIAL
ON TNC ACTIVITIES IS INADEQUATE AND THAT CENTRE SHOULD SEEK
TO COLLECT DETAILED AND RELEVANT INFORMATION DIRECTLY FROM
TNCS AGGREGATING DATA ON CATEGORIES OF COMPANIES ON A
WORLD-WIDE BASIS. SWEDES GIVE EVERY INDICATION OF ACTIVELY
SUPPORTING CERTAIN BASIC LDC OBJECTIVES.
6. PREDICTABLY, LDCS ARE BEING LED BY LATIN AMERICANS. TO
QUOTE LANGUAGE USED BY FIGUERERO, THEY FEEL SECRETARIAT
DOCUMENTS CONCENTRATE TOO HEAVILY ON "FACT-FINDING" AND
"OPERATIONS," TOO LIGHTLY ON STANDARDS; PRIORITY SHOULD BE
PRIMARILY ON CODE OF CONDUCT FOR TNCS, INFO-GATHERING SHOULD
SUPPORT WORK IN THE OPERATIONAL AREAS. BRAZIL, HOWEVER,
SUPPORTED STUDIES ON ECONOMIC ISSUES, PARTICULARLY RESTRICTIVE
BUSINESS PRACTICES, INCLUDING EXPORT RESTRICTIONS, MARKET
ALLOCATION, AND TRANSFER PRICING, BUT NOT ON TECHNOLOGY
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TRANSFER, AS THIS IS BEING STUDIED IN UNCTAD.
7. ON MODALITIES OF WORK, SWEDEN SUPPORTED 5-5-5 FORMULA
FOR ADVISERS, STRESSING IMPORTANCE OF TRADE UNION CONTRIBUTION.
CALLED FOR ACTIVE ROLE FOR ADVISERS; RIGHT TO HOLD SEPARATE
MEETINGS FROM COMMISSION, COMMENT ON COMMISSION REPORTS TO
ECOSOC; "DOES NOT EXCLUDE" POSSIBILITY OF PARTICIPATION IN
COMMISSION MEETINGS. THESE COMMENTS FOLLOWED ARGENTINA EX-
PRESSION OF CONCERN THAT THE COMMISSION NOT BECOME THE PRISONER
OF THE EXPERTS AND SUGGESTION THAT EXPERTS SHOULD BE SELECTED
ON AD HOC BASIS AS NEEDED FOR DISCUSSION OF PARTICULAR
SPECIALIZED TOPICS. FRG, AUSTRALIA, KUWAIT ALL SUPPORTED THIS
ARGENTINA PROPOSAL. US INDICATED WE SEE MERIT IN THIS AP-
PROACH.
8. THE DCS INCLUDING CANADA AND AUSTRALIA, APPEAR TO
BE FAIRLY WELL UNITED ON THE NEED FOR A CAREFUL INFORMATION-
GATHERING EFFORT, THE UK AND FRG MENTIONING A "CLEARINGHOUSE"
FUNCTION FOR THE CENTRE.
9. IT IS APPARENT THAT THIS MEETING IS FLOUNDERING AND
WILL HAVE DIFFICULTY COMING TO GRIPS WITH BASIC QUESTIONS.
TOGETHER WITH UK AND FRG, WE HAVE COME TO VIEW THAT THIS
SESSION COULD MOST USEFULLY FOCUS ON GUIDANCE TO CENTRE FOR
ITS FIRST YEAR OF WORK AND THAT THE CENTRE'S INITIAL EFFORT
SHOULD BE TO ASSIST COMMISSION IN FORMULATING DETAILED WORK
PROGRAM AT ITS NEXT MEETING (PRESENTLY SPRING 1976). TO
THIS END, WE WILL ENCOURAGE FORMATION OF TWO WORKING GROUPS
TO DEAL WITH (1) GUIDANCE TO CENTRE, AND (2) MODALITIES OF
WORK. IF THIS APPROACH SUCCEEDS, THERE WILL BE LITTLE TIME
TO FOCUS ON CODE OF CONDUCT AND AGREEMENTS AND WE MAY BE
ABLE TO BASE COMMISSION'S REPORT ON THESE MATTERS ON SECDOC
E/C.10/2. THERE APPEARS TO BE WIDE SUPPORT AMONG
WEOS FOR OUR IDEAS THAT CENTRE SHOULD BEGIN WITH ROUNDUP OF
EXISTING INFORMATION AND PREPARATION OF SPECIFIC PROPOSALS
FOR RESEARCH IN GENERAL AREAS INDICATED BY COMMISSION.
HOWEVER, WE HAVE HEARD FEW IDEAS ON SUBSTANTIVE PRIORITIES
TO BE INDICATED BY COMMISSION.
10. ACTION REQUESTED: WOULD APPRECIATE VIEWS OF DEPARTMENT
ON (1) NEW SECRETARIAT PAPER E/C.10/2/ADD.1; (2) BRAZIL'S
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PROPOSAL FOR PRIORITY WORK ON ECONOMIC MATTERS BEGINNING
WITH RESTRICTIVE BUSINESS PRACTICES; (3) ANY ADDITIONAL
AREAS OF STUDY WHERE WE WOULD WELCOME CENTRE WORK.
SCALI
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