All of the world's agreements intended to stabilize production and prices of raw commodities have one thing in common: None of them is working.
Nevertheless, the United States last week unexpectedly presented a preliminary proposal to a meeting of the United Nations Conference on Trade and Development (UNCTAD) in Geneva that could lead to creation of a one-million-metric-ton buffer stock to smooth the wild swings in world copper prices.
The proposal was a major reversal of past U.S. policy, which had assumed that no agreement on copper between producing and consuming nations would be possible. Some Carter administration officials remain skeptical that the proposal ever will lead to an agreement because the U.S. still opposes any use of export controls to put a floor under prices -- something on which the exporting nations are likely to insist.
At present prices, it would cost about 1.5 billion to establish the copper buffer stock, which would be used to keep prices within a band 20 percent above or below some reference point. Copper from the buffer stock would be sold to hold down the price and, when prices are weak, copper would be bought on the open market and added to the stock.
Currently copper costs about $1 a pound compared to just over 60 cents a year ago.
The key to the success of any commodity agreement is the size of the buffer stock. In 1977, for example, world tin prices shot up so fast the mangagers of the International Tin Agreement sold all its buffer stock in an unsuccessful bid to hold down the price. Now the price stands at 7.3 cents a pound, far above the upper limit called for in the agreement.
The Carter administration still is seeking congressional authorization to contribute about 5,000 tons of tin from government stockpiles to the international buffer stock. President Carter committed the U.S. to such a contribution in 1977, but so far Congress has not acted.
The International Coffee Agreement has some similar troubles. Signed by producing and consuming nations in 1975, the pact hasn't gone into effect because coffee prices never have fallen enough from their lofty heights to trigger its provisions.
Last month, the Carter administration finally submitted implementing legislation to Congress allowing the U.S. to honor its obligations under the coffee agreement, something that had not been done because of adament congressional opposition brewed by those same high prices.
In 1977, the U.S. also helped conclude the International Sugar Agreement. So far, Congress has refused even to consider ratifying its provisions for stabilizing world sugar prices until domestic sugar producers get price guarantees that will make their current levels of production profitable.
Sen. Frank Church (D-Idaho), who has many high-cost sugar beet growers in his state, is chairman of the Senate Foreign Relations Committee which must pass on the sugar agreement. To break the impasse, President Carter recently agreed to a formula guaranteeing a U.S. raw sugar price of at least 15.8 cents a pound, while the world price is less than 9 cents.
But if the several commodity agreements that have been concluded have not worked, other attempts at agreements so far have come to naught.
The first session of a new round of talks aimed at concluding an agreement on cocoa ended in stalemate.
Administration sources have said there is a consensus that a buffer stock should be set up, but there is sharp disagreement over the high floor price some producers are demanding.
A similar disagreement has hung up efforts to work out a pact covering natural rubber. Another round of negotiations on rubber will begin March 27, but neither the floor price nor the size of a buffer stock has been settled.
None of the failures is as striking, however, as that on a new International Wheat Agreement.
After the food shortages and soaring prices that followed crop failures in many parts of the world in 1971 and 1974, the U.S. and many other nations agreed at a World Food Conference in Rome that a large world wheat reserve should be built.
Reserves, in fact, have been growing, but not because of any wheat agreement. Many wheat-importing nations are unwilling to hold any reserves, which they, of course, would have to buy. There are also disagreements about the stabilization price band and provisions for Third World participation.
Part of the problem with wheat, cocoa, or any other commodity is that many less-developed countries who produce so-called primary products see commodity agreements as a way to transfer wealth from the industrial nations to the LDCs. The U.S. and most other industrial countries, on the other hand, want to stabilize prices at a level no higher than is necessary economically to assure adequate supplies.