Talk of a breakthrough developed as delegates from 79 nations gathered here today for a second round of negotiations on a new international sugar agreement.
The enthusiasm was not shared by the United States.
The old sugar agreement, negotiated in 1977, expires at the end of this year. The first round of negotiations on a new pact, intended to be in effect during burgeoning world supply and thus boost prices in the $9-billion-a-year sugar export business, ended inconclusively in May.
The president of the sugar conference, Jorge Zorreguieta, an Argentine former minister of agriculture, ascribed yesterday's upbeat mood to agreement to start serious talks on a new mechanism to control supply of sugar on the world market.
Zorreguieta, the author of the proposed mechanism that will be under discussion here between now and the end of the current round of talks on Sept. 30, described it as a "common denominator" between the export quota system used under the old sugar agreement and "buffer-stocking," a system that soaks up surpluses favored by the Australians and the European Community.
The main attraction of the Zorreguieta proposal is that it appears amenable to the E. C., which is the world's number two exporter of sugar but until now has not been a party to international agreements to control supply and prices. It is generally conceded that a new international sugar pact would be unworkable without E. C. support.
A spokesman for one major international sugar trading firm has said that the world price for sugar could jump from the current 10 to 11 cents a pound to 30 cents a pound within a month on the strength of E. C. support alone.
Not everyone is happy with the sugar negotiations. The United States, the world's major sugar importer, ahead of the Soviet Union and Japan respectively, has occupied an ambiguous position since the sugar talks opened in May.
Rolinde Prager, counsel for the U.S. Trade Representative's office in Washington and head of the U.S. delegation at the talks, said, "We're not here to make proposals but to see how the talks develop," Prager explained.
The U.S. delegation appears to face the dilemma of believing it is a good idea to bring the European Community into a sugar pact to stabilize world sugar supplies and prices, while it cannot reconcile this with the kind of reliance on buffer stocks that the E. C. sees as the only way to achieve such stability.
The dilemma is fundamental: the United States relied on a quota system to regulate sugar imports into its economy while the 10 nations of the E. C. use buffer stocks exclusively to soak up surplus production of a host of export commodities, including sugar.
Given this, the position held by the United States in the sugar talks so far looks confusing. The U.S. delegation yesterday described the old sugar agreement, which relied largely on export quotas to control supply, as "on the face of it, a good agreement," and, at the same time, praised the new proposals for a supply control mechanism, which relies to a great extent on stockpiling.
To further obscure the U.S. position, Prager, the head of the U.S. delegation, commented yesterday that "it's no secret that this administration, like other administrations, has now viewed commodity agreements in a positive light."
Despite today's enthusiastic mood, it seems that agreement on a new international sugar agreement is unlikely before the end of the year.
The head of the Australian delegation to the talks, Deputy Secretary for Trade Colin Teese, predicted the current round of talks will end in an agreement along the lines of the one under discussion, which he termed the "key to everything else."
"Everything else," still to be negotiated, includes such matters as the world price range and and measures to control artificial sweeteners.