ABSTRACT
CURRENT interest in international commodity agreements (icas) is very high as a result of the economic integration of Europe and as a result of a decline in the prices of the commodity exports of underdeveloped countries over the last ten years. Both these phenomena give rise mainly to schemes for price support or market rationalization rather than for the moderation of short-term fluctuations, which is the main concern here. In fact, most recent discussions of icas seem to postulate their main role as that of supporting commodity prices at levels higher than such prices would reach in an open world market. 1 icas thus become a form of economic aid which transfers resources via higher prices from consumers to producers. Discussion of this form of ica is postponed till the second section of this chapter.
