Commodity Agreements Research Articles

International Commodity Agreements and Cartels: Lessons and Policy Implications

International Commodity Agreements and Cartels: Lessons and Policy Implications

How to halt deforestation in the Amazon? A Bayesian process-tracing approach

In this paper, we employ for the first time a Bayesian process-tracing approach to assess the role of different interventions designed to halt deforestation. We applied the methodology to six initiatives implemented between 2006 and 2019 in the municipality of São Felix do Xingu, namely: (i) institution of protected areas, (ii) environmental monitoring and enforcement, (iii) credit restrictions, (iv) commodity agreements, (v) multi-stakeholder processes, and (vi) value chain projects. Bayesian process tracing is an alternative to traditional counterfactual approaches that allows the gleaning of in-depth insights into ‘causal chain’ mechanisms and complex interrelationships in individual cases, rather than identifying common or cross-cutting features across different cases. Contrary to traditional process-tracing methodologies, the Bayesian approach provides analytical transparency and replicability through a formal and fine-grained assessment of the strength of the evidence. We assessed 31 individual pieces of evidence, developed using data collected through a variety of quantitative and qualitative methods. We grouped these into interventions spanning three periods of time and traced the causal mechanisms linked to their success or failure. In total, we developed nine theory components. Our results reveal that we are practically certain that four theory components are true. We are also reasonably certain or highly confident that four other theory components are true, and only cautiously confident that one component is true. Drawing on the nine components, we offer a composite theory explaining deforestation outcomes. Our findings provide four implications for global debates. Namely, they provide a strong case for the importance of conceptually distinguishing: the types of actors targeted (e.g., smallholder or medium-to-large landholders) and the frontier status (i.e., whether interventions take place in active frontiers or in consolidated areas). They also prove that interventions may be well implemented for a certain period but can lose effectiveness over time. Finally, our findings call attention to synergies among interventions, and in particular to the combination of regulatory interventions to halt frontier expansion with market-based approaches to incentivize non-deforestation behaviour.

INFLUENCE OF THE WTO'S AGREEMENT ON AGRICULTURE (AOA) POLICY ON INDONESIAN COFFEE IMPORTS 2007-2013

As one of the policies issued by the World Trade Organization (WTO), the Agreement on Agriculture is an agricultural commodity agreement that binds all WTO member countries. As the fourth largest coffee producer globally, Indonesia must accept this policy as the exit to Indonesian coffee to various countries around the world. The study's findings get three things that influence agreement on agriculture (AoA) on Indonesian coffee imports. First, the opening of market access; Second, the reduction of domestic subsidies; Third, the removal of export subsidies. The method used in this study is qualitative-transcribed.

Digitalisation as a critical tool in resource asset valuations, acquisitions and dispositions

Digital twins and digital ‘solutions’ have become increasingly common in recent years, as companies recognise the benefit of greater visibility and control into their operations. When built and implemented properly, a digital twin (DT) offers the potential for significant cost savings, coupled with attractive add-on value in safety, operational integrity and predictive maintenance, all of which can also result in increased production. DTs are also critical for effective portfolio management, in allowing a full understanding of asset or field value, upside, and long-term potential. By identifying areas for optimisation, a DT can help the operator prioritise investment, and accurately understand which assets to keep or monetise. Through building DTs for operating properties, Nova Systems and PTC have gained a deep understanding of the upside potential inherent in the technology. This also means that DT technology can be invaluable in asset acquisitions. During merger and acquisition (M&A) analysis, a company typically looks for technical, operational and financial leverage which can unlock potential not seen by the current owner. These can be commercial (commodity contract, price deck and agreements), technical (e.g. engineering approach and models, and subsurface), operating synergies (common services, facilities and duplication) and digital solutions. While most companies utilise traditional and tested approaches to asset valuation, new digital solutions offer the opportunity for break-out higher valuations which can drive an entirely new approach to M&A growth. In today’s competitive marketplace, the company with an innovative digital solutions skillset will have the advantage.

Expanding Histories of International Law

Much of the recent surge of interest in the history of international law has been fed by postcolonial attitudes in the legal academy. In the footsteps of Antony Anghie’s Sovereignty, Imperialism and International Law ,1 new works have examined international law’s role in facilitating or reforming the structures of Western rule in the colonies or in the global south before and after formal colonialism. Some of these have focused on the 19th century uses of legal techniques such as extraterritoriality or arbitration to guarantee the predominance of Western—European or American—interests in the Middle East, in Africa, or Latin America.2 Early 20th century international institutions—the League of Nations, commodity agreements, aspects of multilateral treaty-making—have been examined with the view to understanding their role in the perpetuation of the global preponderance of the West. Other studies have focused on the struggles of the third world in the decolonization period—the formation and work of the ‘G-77’ in the aftermath of the Bandung Conference (1955) and the rise and fall of the ‘New International Economic Order’ in the 1970s and 1980s.3 The history of human rights, a real cottage industry nowadays, has likewise attracted postcolonial examinations of the role of subjective rights in the consolidation of Western economic or ideological hegemony.4 Such studies differ in many ways from older histories of the field that were either more neutral in conception or associated the growth of international law with peace and enlightenment. The first professional histories of the field, such as the works by the Belgian Ernst Nys or the Franco-German Robert Redslob at the end of the 19th and beginning of the 20th century presented the law of nations in its many permutations as an instrument of progressive humanitarianism, international solidarity, and lawfulness in the conduct …

Douglas Henry McKAY, CBE, 1923-2012

Douglas Henry McKAY, CBE, 1923-2012

The International Coffee Agreement and the Production of Coffee in Guatemala, 1962—1989

From 1962 to 1989, the coffee-producing and coffee-consuming nations created a commodity agreement limiting the amount of coffee a nation could export in order to correct two structural deficiencies: global overproduction of coffee and drastic price movements associated with weather-related phenomena. During the 27 years of this quota agreement, Guatemala had a unique opportunity to get farmers to diversify from coffee to other export commodities and allow farmers to use new technology to improve their profitability. The Asociación Nacional del Café (ANACAFE) administered these diversification and technification programs, while the London-based International Coffee Organization (ICO) regulated the international coffee trade. However, the ICO achieved more success in reducing overproduction of coffee and stopping downward price movements than ANACAFE did in implementing diversification and technification. Because ANACAFE failed to disseminate technification to the vast majority of the small coffee-producers, when the ICO allowed quotas to expire in 1989 the vast majority of the Guatemalan coffee growers found themselves not as price-competitive as their Central American neighbors.

How did the demise of international commodity agreements affect volatility of primary commodity prices?

This article has used the T-GARCH and E-GARCH models to answer the following two questions regarding the pattern of volatility of commodity prices following the demise of international commodity agreements (hereafter ICAs) in five key commodities: firstly, the question of whether the collapse or suspension of ICAs contributed to asymmetry in price volatility and secondly, the question of whether the collapse or suspension of ICAs led to an increase in persistence in price volatility. The results show that breakdown of ICAs was generally followed by higher degree asymmetry in price volatility but lower persistence in volatility.

How cartels endure and how they fail: studies of industrial collusion

Introduction: What Do We Mean by Cartel Success? 1. Studies of Cartel Stability: A Comparison of Methodological Approaches 2. Decreasing Average Cost and Competition: A New Look at the Addyston Pipe Case 3. The Stability of Ocean Shipping Cartels 4. Why One Cartel Fails and Another Endures: The Joint Executive Committee and the Railroad Express 5. A Practice without Defenders: The Price Effects of Cartelization 6. If Cartels Were Legal, When Would Firms Fix Prices? 7. The Difference Government Policy Makes: The Case of Japan 8. Political Constraints on Government Cartelization: The Case of Oil Production Regulation in Texas and Saudi Arabia 9. International Commodity Agreements as Internationally Sanctioned Cartels 10. Response to Decline in the Western European Synthetic Fibre Industry: An Investigation of a Crisis Cartel 11. Collaborate to Collude? Multimarket and Multiproject Contact in R&D Index

Commodity futures markets in LDCs: a review and prospects

Recent moves by the World Bank to devise market-based approaches for dealing with commodity price risk provide a fresh impetus for research in the area of commodity futures markets as a policy option. Since the collapse of the International Commodity Agreements there has been little progress in finding a solution to the perennial problem of price risk arising from price volatility. This paper aims to provide a background to the more general issue of development and growth in less developed countries (LDCs) by examining past and current policy attempts to reduce the effects of price volatility in primary commodity markets.

The demise of commodity price agreements: the role of exchange rates and special interests

We derive the equilibrium joint distribution of exchange rate and commodity price in a two-country rational expectations model. The correlation between commodity price and exchange rate appears crucial for the stability of commodity markets. This result arises from the common practice to quote commodity prices in consuming countries' currency, which subjects producing countries to the currency risk. Welfare results of commodity price stabilization are obtained and facilitate the interpretation of the position taken by industrialized countries long opposed to international commodity agreements. We apply our model to the Philippines and investigate the potential effects of the International Sugar Agreement (ISA) on the various conditional volatilities of the model. We conclude on the relative ineffectiveness of these agreements in limiting fluctuations of sugar prices.

RAFFAELLI, Marcello. Rise and Demise of Commodity Agreements. An investigation into the Breakdown of International Commodity Agreements. Cambridge,Woodhead Publishing Ltd., 1995, 240 p.

RAFFAELLI, Marcello. Rise and Demise of Commodity Agreements. An investigation into the Breakdown of International Commodity Agreements. Cambridge,Woodhead Publishing Ltd., 1995, 240 p.. Un article de la revue Études internationales (Volume 27, numéro 3, 1996, p. 485-722) diffusée par la plateforme Érudit.

Rent Seeking and International Commodity Agreements: The Case of Coffee

Although quotas are known to create opportunities for rent seeking, such effects have not been examined in the context of international commodity agreements. We hypothesize that export quotas imposed by the International Coffee Agreement (ICA), by creating quota rents in coffee-exporting countries, encourage directly unproductive (DUP) behavior by domestic groups seeking to capture such rents.' Such behavior can cause substantial economic waste and undesirably alter income distribution. The allocational and distributional effects of even moderate rent-seeking behavior could be sufficient to transform a coffee-exporting country's expected welfare gain from ICA quotas into a welfare loss. An understanding of these effects and a measure of their magnitude is crucial to any evaluation of the ICA. The classic analyses of international commodity agreements have focused on how such agreements affect the commodity terms of trade and export revenue instability.2 Surprisingly little work exists on the welfare effects of commodity agreements within exporting countries, particularly on the income-distribution effects or DUP activity the agreements might engender.3 The papers by G. McMahon and H. Dick and colleagues are partial exceptions.4 McMahon shows that Kenya's response to ICA quotas (the government banned new coffee plantings in an effort to control output) was inefficient and had regressive income effects. Dick and colleagues compare the effects of buffer stocks and export quotas on a domestic economy using a general equilibrium model and find that quotas are better because they shift resources from

International Commodity Agreements: An obituary notice

It is widely believed that International Commodity Agreements have lapsed because they have failed. The reality is more complex. The tin agreement did collapse, but for sugar and cocoa adverse market conditions and lack of general support made stabilization impractical. Control of the coffee market ceased largely because of disagreements both between and within the producing countries on the division of the benefits resulting from higher prices. Overall, commodity control fits uneasily in an increasingly globalized and competitive world, and this perception has resulted in a diminished willingness to resolve the practical difficulties of price stabilization.

Can international commodity agreements work?

Commodity agreements have been discussed for many years. However, only two agreements (for cocoa and rubber) have been concluded that do not rule out success in advance. Using an annual model of the cocoa market, the viability of the instruments agreed upon is analyzed, and ways and means to improve the functioning of commodity agreements are explored.

Price instability and commodity futures markets

The inability of individual developing nations to provide widescale commodity price support and the continual renegotiation of international commodity agreements have engendered a search for alternative mechanisms to reduce price volatility for soft commodities. One possibility is the use of futures markets. This paper takes four commodities, cocoa, coffee, sugar and wheat and analyzes the efficiency of associated futures markets in terms of price discovery and risk reduction. In essence, all four markets exhibit efficiency and therefore provide, in theory, a viable policy alternative for developing economies.

The quest for order: a review of international sugar agreements

Sugar has been the subject of multilateral intergovernmental commodity agreements intermittently since 1864, although inherently unsuited for international market regulation. Obtainable from tropical and temperate plants grown over a wide range of natural conditions (and now vulnerable to replacement by alternative sweeteners), it invites countries to seek self-sufficiency on the supply side, while its role as a staple food encourages autarkic impulses from the demand side. A secular decline in the ratio of international trade to global production has been accompanied by the compartmentalization of markets and a dispersal of power both among exporters and importers, eroding the basis for consensus among a heterogeneous population of market participants. In addition to structural obstacles, asymmetric and conflicting supply and demand responses stand in the way of effective international market management. Since 1985, the International Sugar Organization has existed by virtue of administrative agreements without regulatory clauses. While a return to market controls is unlikely, the organization fulfils monitorial and investigative functions not provided by commercial information services, all the more needed owing to developments which may upset the current relative stability of the market.

Evaluating the Behavior of International Cartel Members

Some phenomena of interest in international trade can be understood by looking at only one country, pushing others into the background. Sometimes, though, to preserve the essence of a problem one must attempt to take explicit account of the interaction of nations. This viewpoint invites one to treat a collective body-in this case a group of countries-as a deciding unit. There is no shortage of applications that call for such thinking. Among them are the GATT negotiations and NAFTA, international commodity agreements, and international cartels. In each of these, the idea of treating the collective as an organic decision-maker is alluring, and to be sure much has been gained in this fashion. There are also dangers that attend adopting such a modeling strategy. Our purpose is to lay out these dangers-their source and effects-and then to introduce briefly some remedies that have become available lately. Does a group optimize? The essence of the methodology of economics inheres in the treatment of decision-makers as optimizers, attributing to them an objective criterion and the impulse to behave optimally. Can this methodology be used in studying group decision making? Arrow showed that in a certain formal sense it can-

Protectionism in agriculture: Slow progress towards freer trade in agricultural products

Protectionism is widespread in agricultural trade. As a consequence, world markets are distorted and unstable. Earlier attempts to negotiate commodity agreements have failed to address the root problem: the domestic farm policies in industrial and middle-income countries. Constraints on these policies are now openly being discussed in the GATT Uruguay Round. Regional trade blocs are also coming to terms with the problems of agricultural trade. And a number of countries are unilaterally liberalizing agricultural trade as a part of their economic reform program. Despite this activity, high protection levels are still evident in the middle-income developed countries.

Developed country policies and biological diversity in developing countires

A vigorous effort will be required to negotiate and implement international commodity agreements which would stabilize and maximize the earnings of developing countries from the export of primary products. Success will enable them to evolve and develop from a more balanced base and to manage their natural resources in a sustainable manner. This article examines ways developing countries are interlocked with wealthy nations in terms of agriculture practices, how that affects biodiversity and habitat conditions in developing countries, and how developing countries could develop agricultural policies and strategies that would address and correct the loss of biological diversity. Agricultural trade policies, agricultural assistance policies, and potentials within these for changes are examined in terms of achieving sustainable approaches to agriculture. Some general principles are apparent, and the combined effects from certain policies are clear. Protectionism depletes the resources of the developing world; it accelerates the loss of biological diversity and reduces the ability of poorer nations to create a context in which future development could occur. Developing countries become forced to respond to foreign rather than local conditions. The success of agricultural development will depend on linkages with natural areas important for biological diversity. Therefore, agricultural development projects supported by agencies of developed nations must consider the larger ecosystem, the parts in context with the whole. Since current models of economic and ecological systems are disconnected, a monitoring and research program should be established to determine the effectiveness of alternative policies and organizational structures. Nonetheless, economic restructuring offers opportunities to direct efforts towards conservation of biological resources, sustainable agriculture, and training in principles of conservation. Opportunities for innovative initiatives exist through debt reduction or exchanging debt for biological conservation. This could lead to sound agricultural systems, reduce government deficits, and protect biological diversity. The global climate debt, incurred by wealthy nations, could be managed to the benefit of developing countries. It is suggested that nations develop a “Foreign Policy on Agriculture and the Environment” stating national objectives in both trade and aid, in relation to agriculture.