Terms Of International Commodity Agreement
Created in 1960, the Organization of the Petroleum Exporting Countries (OPEC) is a special case. It violates, so far without appeal, the provisions of the Havana Charter that require consumer representation. It uses a process of collective bargaining, not with importing countries, but with producers and distributors of companies largely controlled by the citizens of advanced industrialized countries, in particular the United States, the United Kingdom, the Netherlands and France. Perhaps the time has come for a truly international oil company. An internal rationing system in the United States, on behalf of domestic producer groups, has already and inevitably led to a system of import controls and a strong argument can be made for import quotas to be imposed by a multilateral instrument and not by a unilateral instrument. Germany, Italy and Japan, for example, have very little direct control over oil supply, but are large consumers and importers. The fact that oil-exporting countries include relatively prosperous members of the less developed world, while the poorest members are heavily dependent on oil imports, also reflects a certain reluctance to exercise negotiating power by OPEC. (1) Non-elastic application. If narrow substitutes are available, market price support for a single commodity will certainly have immediate and significant negative effects. The existence of synthetic rubber explains the total absence of a post-war agreement for the natural product; agreements restricting competition for individual oilseeds are excluded by the existence of a large list of substitute seeds and by competition from butter; But sugar has applied since 1937 for a continuous succession of agreements.
While it is generally true that prices on national markets tend to fluctuate less strongly than the prices of products sold unprotected on the remaining „free“ markets, it does not in any way follow that the prices of the free market as a group are necessarily less stable than those of primary raw materials subject to world market conditions (primary raw materials, whose prices differ throughout the non-communist world, mainly in transport costs combined with nominal tariffs). In the past, cocoa, natural rubber and wool tend to be among the raw materials that experience the most significant variations in market prices, mainly for reasons of supply integrity, reinforced by the elasticity of demand in the case of cocoa and, in the case of natural rubber and wool, by fairly large cyclical fluctuations in demand. While sterling producers are the dominant exporters in all three countries and the sterling zone`s foreign exchange reserves therefore tend to fluctuate depending on their current strength or weakness in the market, no deal was regulated in the post-war period. . . .