RESOLUTION EC-331

FORUM: ECONOMIC COMMITTEE

QUESTION OF: The question of diversifying supply chains

SUBMITTED BY: Ethiopia

CO-SUBMITTERS:Argentina, Bosnia & Herzegovina, Central African Republic, Cuba, Germany, Greece, Holy See, Latvia, Nigeria, Malaysia, Mongolia, Myanmar, Pakistan, Philippines, Sudan, United States of America.

STATUSPassed

THE ECONOMIC COMMITTEE, 

Recalling the conclusions drawn by the 105th session of the General Conference of the International Labor Organization in Geneva 2006 on the topic of “Opportunities And Challenges For The Realization Of Decent Work And Inclusive Development Emerging From Global Supply Chains”,

 

Alarmed by the effects of the pandemic and its responses in complicating the flexibility of supply chains and forcing businesses into the vulnerable single-channel ones,

 

Cognizant of the need for diversification into multi-channel supply chains or even supply webs, given the increased resilience these offers when compared to their single-channel counterparts,

 

Recognizing the increased flexibility and diversification enabled by the competition developed through free trade when compared to protectionist models which artificially reduce competition through the imposition of tariffs,

 

Aware of the increasing concern for supply chain transparency by consumers and states, and understanding it as a way to avoid the outbreak of trade wars,

 

Recalling that many companies around the world depend on a supply chain around the globe,

 

Aware that the trade war between the USA and China have generated huge market uncertainties and made a diversification of the supply chains of many companies necessary,

 

Concerned that the COVID-19 pandemic, which implicated massive restrictions, has further lead to difficulties for many companies due to the dependence of their supply chain on a few countries,

 

Considering that it’s of great interest to many companies to increase the variety and flexibility of their supply chains, especially in view of the enormous uncertainties nowadays,

 

Appreciates that progress was made by many companies like creative and agile solutions,

 

  1. Encourages all nations to reduce excessive practices of economic protectionism in order to develop the creation of multichannel supply chains, a process that requires the liberalization of international trade and hence the reduction of tariffs;             
  2. Calls upon the international community to develop and adopt international payment technologies to facilitate international transactions, allowing for the development of more intricate and resilient supply chains;
  3. Requests all United Nations (UN) member states to work with the World Trade Organization (WTO) to establish consultation services for companies and government officials on contacting or switching to new suppliers;
  4. Calls on all UN member states to recognize the importance of diversified supply chains of their domestic companies and cooperation and that they lead to greater security despite increasing global uncertainties and as a chance for further development of domestic industry by:
    1. identifying their potential economic areas and areas for diversification with the help of research groups in the UN
    2. further supporting companies in diversifying their supply chain by reminding each economic entity to pay attention to potentially possible subordinate suppliers, complete the overall evaluation of the whole supply chain, and avoid affecting the overall production due to the problems of individual hidden subordinate suppliers,the overall evaluation should be focused on these aspects: i. the proportion of domestic independently supplied products ii. the proportion of products depend on foreign supply chain iii. the amount of the foreign supply chain iv. the plan to diversify the supply chain
    3. participating in multilateral instead of bilateral trade agreements to enhance multi-national diversity rather than single-national reliance;
  5. Further recommends businesses that have seen their supply links affected due to trade conflicts to work closely with supply chain diversification experts, present capacitation programs to employees and executives of the firm about the topic, and study new markets where stability is not threatened by the trade war and varied trade options are available; 
  6. Further calls upon the World Bank to aid Least Economically Developed Countries (LEDCs) in funding infrastructure projects, in order to make member states more attractive to multinational companies for production, by: 
    1. investing in education in the form of:
      1. global supply chain management courses for underprivileged individuals, by methods such as but not limited to using United Nations Educational, Scientific and Cultural Organization (UNESCO) international or WTO guidelines
      2. solving communication and cultural barriers through language and enhanced global geography courses
      3. courses with the goal of making businesses familiar with the business rules and customs around the world
    2. investing in trading hubs, especially in coastal areas as well as other cities with potential
    3. investing in transportation infrastructure such as but not limited to
      1. Roads
      2. Railways
      3.  maritime sea routes in, for example establishing or maintaining sea routes
      4.  air transport
    4. following the UN’s 17 Sustainable Development Goals as presented by A/RES/70/1;
  7. Calls on member nations to maintain transparency in supply chains as a way to prevent the future outbreak of trade conflicts by:
    1. implementing systems of external private audit that work with states
    2. strengthening and publicizing the relationship between suppliers and buyers in order to guarantee and flexibilize supply
    3. considering the future application of blockchain-related-technology between members of a supply chain, where information, inventory, and financial flows are registered and no parties are left blind to other operations within the process which will:
      1. Be created by a programming group employed by the members of the supply chain implementing the system
      2. Require a previous agreement between all parties that will participate in it where they commit to share the information and transactions in this blockchain-like-system
      3. Be used by companies to identify their strong economic sectors, this way during a trade war companies will be able to find more buyers and diversify supply chains;
  8. Calls all member states for a series of quarterly conferences with any additional meetings if needed , discussing the topic and creating new alternatives and solutions for the lack of diversity in supply chains, as well as:
      1. Resolving any issues relating to current trade conflicts
      2. proposing a system about the LEDCs’ economic issues by getting monetary support from MEDC’s, the World Bank, the IMF, and the WTO.