Commodity Agreements And Price Stabilization

This book deals with commodity price stabilization. It explores the contemporary changes in global trade agreements and their relationship to the ongoing changes in international and regional trade structures and economic integration. It takes a wholistic, interdisciplinary approach, including economic, legal and political aspects; examines the EC and NAFTA as important trade blocs, and their impact on global economies. Investigates the Chinese approach to trade management, the oil price stabilization policies, and seabed minerals; discusses discrimination in international trade. The interdisciplinary nature of the book is given prominence through the layout of the various parts. Part I examines the legal issues of commodity trade, investigating the debate over whether international trade agreements create hard law or soft law. Part II discusses the political economy of contemporary global trade issues, including the rise of intraindustry trade and discrimination in international trade. Part III addresses the recent trend towards regionalism and trade blocs, focusing on the EC and NAFTA, and their economic implications. Finally, Part IV presents the issues of commodity trade stabilization for minerals and oil, including both land-based and seabed commodities.

In Agriculture, Price Stabilisation and Trade Rules, Irene Musselli offers a comprehensive doctrinal and historical analysis of stabilisation tools and approaches in agriculture. Using her extensive practical experience in the field, she takes up the interface of the tools discussed with trade rules and offers the first comprehensive analysis of WTO rules from the perspective of stabilisation policies. This volume offers a fresh look at the tool box of managed trade in agricultural commodities and develops new and refined solutions that take into account the legal role of equity and of graduation. Musselli offers new insights and is able to invigorate a debate caught in overly ideological entanglements between market oriented and interventionist schools.

International commodity markets have traditionally attracted the attention of economists, econometricians, and policy makers especially in and following politically tumultuous times. For instance, the primary commodity price boom of 1973/74 and the subsequent period of highly volatile world market prices initiated increased research on commodity markets which quickly focused on possible price stabilization schemes, particularly on buffer stocks. Simultaneously, the issue clearly advanced in priority on the political agenda, such that the United Nations Conference on Trade and Development (UNCTAD) proposed an "Integrated Program for Commodities" (IPC) intended to stabilize the world market prices of ten so-called "core commodities"l (UNCTAD (1974, 1976a), Behrman (1979)). Many developing nations welcomed the IPC almost enthusiastically, but it did not receive more than lukewarm support by major industrialized countries, apparently due to the experience with some thirty international commodity agreements past World War II2. Critical evaluations have, among others, been presented by McNicol (1978), Gordon-Ashworth (1984), and Macbean & Nguyen (1987). The most detailed of these studies is Gordon-Ashworth's, who concludes that "on balance ... the performance of international commodity agreements has been too unreliable and their distributive effects too uneven to secure the development goals that have been set" (1984, p. 284)3. Consequently, the IPC turned out to be quite controversial a topic on the UNCTAD's 1976 meeting in Nairobi and has not been able to gain any impetus since. lThese were cocoa, coffee, copper, cotton, jute, rubber, sisal, sugar, tea, and tin.

A detailed examination is provided of the circumstances which led to the negotiation of each of the international commodity agreements with economic provision included since the end of World War II. How such agreements operated and the causes for difficulties in their implementation and the reasons for their failure is also discussed. It concentrates on four specific agreements; cocoa, coffee, sugar and tin; and as a contrast to these commodities a chapter is dedicated to OPEC. Written by an insider who was actually present at the 'creation', a first-hand view is given of how commodity agreements are actually arrived at during the course of negotiation and implementation.

To emphasise the working and effects of the tools used in various commodity agreements, and discuss the implications of compensatory finance against factual description of the operation of recent commodity agreements.