Negotiations between rich and poor nations here to set up an international system of price supports for commodites broke down today with a spokesman for developing countries claiming that it was "futile to continue [the talks] until the developed countries demonstrate the necessary political will to make future negotiations meaningful."
The negotiations, sponsored by the United Nations Conference on Trade and Development (UNCTAD), is an attempt by Third World countries to rig prices for as many as 18 raw or semi-processed materials.
The unanimous decision of the so-called Groups of 77, a collection of Asian, African and South American countries and Yugoslavia, to suspend the talks follows over three weeks of disagreement over how to finance a fund for buffer stocks that could be drawn upon to maintain comodity prices within certain levels. The group announced it would formally propose suspending the negotiations at Thursday's session.
The developing countries proposed that money to establish the Common Fund should come directly from the governments of members countries (intially $1 billion, growing to $6 billion). This would place the main burden for financing the price support arangement on the industrialized countries argued instead that the money for buffer stocks should be generated from agreements between producers and consumers on individual commodities, such as the pact presently existing on sugar. Each commodity pact would put into a pool of funds 75 per cent of the money it has collected to pay for buffer stocks, according to the developed countries proposal. These commodity agreements could then draw up to 125 per cent of the pool to maintain prices.
There was also fundamental disagreement over whether a common fund should finance measures other than buffer stocks to ensure a more stable market for commodity producing countries. Developing countries felt that they should be able to draw money from the Common Fund to pay for such programs as product diversification and better market research, but the developed countries replied that there are already ways to accomplish such goals through the World Bank and other international organizations.
[In Washington, the State Department expressed regret at the break.]