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Southern bargaining in north-south trade : the case of tin Saravanamuttu, Jayaratnam 1972

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SOUTHERN BARGAINING IN NORTH-SOUTH TRADE: THE CASE OF TIN by JAYARATNAM SARAVANAMUTTU B .Soc . S c i . (Hons . ) » U n i v e r s i t y o f S ingapore , 1969 „ A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n the Department of P o l i t i c a l Sc ience We accept t h i s t h e s i s as conforming to r e q u i r e d s tandard THE UNIVERSITY OF BRITISH COLUMBIA A p r i l , 1972 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f t h e r e q u i r e m e n t s f o r an advanced degree a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I agree t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r ag ree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by t h e Head o f my Depar tment o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Depar tment o f P o l i t i c a l S c i e n c e The U n i v e r s i t y o f B r i t i s h C o l u m b i a V a n c o u v e r 8 , Canada Date May 1, 1972 ABSTRACT T h i s s tudy exp lore s the k i n d s of b a r g a i n i n g s t r a t e g i e s which have been used and can be used by the l e s s developed c o u n t r i e s , des ignated as " the S o u t h " , i n t rade n e g o t i a t i o n s w i t h the developed c o u n t r i e s , des ignated as " t h e N o r t h " . I t takes as i t s p o i n t of departure the North-South a x i s o f c o n f l i c t i n i n t e r n a t i o n a l r e l a t i o n s , namely, the c o n f l i c t between the r i c h , advanced and i n d u s t r i a l n a t i o n s and the poor , newly emergent and deve lop ing n a t i o n s . I t focuses s p e c i f i c a l l y on Southern b a r g a i n i n g i n one sub-area of Nor th-South t rade - i n t e r n a t i o n a l t i n accords . The study i s presented i n three chap te r s . The f i r s t chapter presents an overview of North-South t rade r e l a t i o n s h i p s and i s s u e s . The second chapter begins a case study of Nor th-South c o n f r o n t a t i o n i n t i n agreements. The f i n a l chapter concludes w i t h a c h e c k - l i s t of b a r g a i n i n g s t r a t e g i e s which have been employed or may be employed by Southern producing c o u n t r i e s i n t i n n e g o t i a t i o n s . The major f i n d i n g o f the s tudy i s tha t Southern b a r g a i n i n g i n t i n accords has r e l i e d most h e a v i l y on s t r a t e g i e s o f normative appeal based on the UNCTAD ' e t h o s ' . In p a r t i c u l a r , b a r g a i n i n g s t r a t e g i e s which appeal to Nor thern a l t r u i s m and democrat ic norms are e s p e c i a l l y p o p u l a r . The second most used group o f s t r a t e g i e s are those which appeal to s e l f - i n t e r e s t . 0 I n g e n e r a l , i t was found tha t Southern b a r g a i n i n g has not i i been v e r y e f f e c t i v e . I t i s t h e r e f o r e recommended t h a t Southern c o u n t r i e s should (1) employ more i n t e n s i v e l y s t r a t e g i e s o f normative appeal o ther than tho se based on the UNCTAD e t h i c ; (2) employ more i n t e n s i v e l y s t r a t e g i e s which appeal to s e l f - i n t e r e s t s o f Nor thern c o u n t r i e s ; and (3) employ s t r a t e g i e s which demonstrate commitment to b a r g a i n i n g p o s i t i o n s , and i f need be , to demonstrate such commitment by the use of t h r e a t s . i i i TABLE OF CONTENTS CHAPTER PAGE INTRODUCTION . . . . 1 I THE NATURE AND ISSUES OF NORTH-SOUTH TRADE 6 The P a r t i e s i n the Trade I s sue-area . . . . . . 6 The Nature of Nor th-South Trade . . . . 9 Commodity Trade . . . . • • 12 Manufactures Trade . . . . 16 Southern Complaints A g a i n s t the Trade System: Key Issues 20 The "Trade Gap" . . . . 22 D e t e r i o r a t i n g terms of t rade . . . . . . . . . 24 The GATT . . . . . . . . . . 26 Remedies . . . . . . 27 I I NORTH-SOUTH CONFRONTATION IN TIN AGREEMENTS . . . . . . 32 I H i s t o r y and Issues of T i n Agreements . . . . . . 32 The R e l a t i v e North-South Stakes i n T i n Trade . . . . 39 The O b j e c t i v e s o f T i n Agreements . . . . . . . . 47 The E f f e c t i v e n e s s of T i n Agreements . . . . . . 51 I I The S t r u c t u r e and Process of T i n N e g o t i a t i o n s . . 65 P r e p a r a t o r y N e g o t i a t i o n . . . . . . . . . . 67 O p e r a t i o n a l N e g o t i a t i o n . . . . . . . . . . 70 The Opera t ion of an Agreement . . . . . . . . 73 I I I The D e c i s i o n to Go f o r Accord . . . . . . . . . . 75 I I I SOUTHERN BARGAINING STRATEGIES: PAST USAGE AND FUTURE POSSIBILITIES 84 I n f l u e n c i n g the Opponent's Normative P o s i t i o n . . 85 I n f l u e n c i n g the Opponent's P e r c e p t i o n of h i s U t i l i t y from an Outcome . . . . . . . . . 9 3 i v CHAPTER PAGE I n f l u e n c i n g the Opponent's P e r c e p t i o n of One's U t i l i t y from an Outcome . . . . . . . . P romi s ing the Opponent a R e a l Gain from an Outcome . . . . . . . . 106 Threatening the Opponent w i t h a Rea l Loss from an Outcome . . . . . . 108 P r e s e n t i n g the Opponent w i t h a Rea l Change i n h i s U t i l i t y from an Outcome . . . . . . . . 113 Assessment and Recommendations . • . . . . 114 Some Concluding Observat ions . . . . . . . . BIBLIOGRAPHY . . . . ~ i 3 4 APPENDICES . . . . 1 4 1 13 V LIST OF TABLES TABLE PAGE I - A TOTAL TRADE OF NORTH AND SOUTH, 1969 11 B NORTH-SOUTH TRADE, 1969 11 I I PRIMARY COMMODITIES: IMPORTS INTO NORTHERN COUNTRIES, 1967 . . 17 I I I SOUTHERN EXPORTS BY PRINCIPAL COUNTRIES OF MANUFACTURES AND SEMI-MANUFACTURES TO NORTHERN COUNTRIES, 1967 19 IV PRODUCTION OF TIN CONCENTRATES, 1969 ' . . 40 V INDUSTRIAL CONSUMPTION OF T I N , 1969 41 VI TIN AS A PERCENTAGE OF TOTAL EXPORTS BY VALUE, 1968 43 V I I TIN AS A PERCENTAGE OF TOTAL IMPORTS BY VALUE, 1968 . . . . . . . 45 V I I I PRICE RANGES IN THE TIN AGREEMENTS 54 IX BUFFER STOCK TIN METAL PURCHASES UNDER THE 1965 TIN AGREEMENT . . 55 X TIN EXPORT EARNINGS OF PRODUCING COUNTRIES . . . . 62 XI OBJECTIVES, INTERESTS AND EFFECTIVENESS OF TIN AGREEMENTS . . 66 X I I ASSUMED BURDEN OF CONSUMERS IN CONTRIBUTING TO THE TIN BUFFER STOCK . . 98 ! v i LIST OF ILLUSTRATIONS FIGURE p AGE I G r a p h i c a l I l l u s t r a t i o n of M a t r i x 1 . . . . 80 v i i ACKNOWLEDGEMENT I would l i k e to thank my s u p e r v i s o r , P r o f e s s o r Mark Zacher f o r h i s constant a s s i s t a n c e , guidance and c r i t i c i s m i n h e l p i n g me re sea rch t h i s s tudy . Needless to say , he should not be h e l d accountable f o r any e r r o r s , omiss ions and views conta ined i n the s tudy . INTRODUCTION The main aim of t h i s study i s to exp lore the k i n d s o f b a r g a i n i n g s t r a t e g i e s which have been employed and can be employed by l e s s developed c o u n t r i e s (LDC's) i n t rade n e g o t i a t i o n s w i t h developed c o u n t r i e s . I am a l s o i n t e r e s t e d g e n e r a l l y i n uncover ing the dynamics of Nor th-South c o n f l i c t i n the t rade i s s u e - a r e a . The terms " N o r t h " and " S o u t h " are used here to r e f e r to the developed c o u n t r i e s and the LDC's r e s p e c t i v e l y . I have found t h i s c h a r a c t e r i z a t i o n u s e f u l i n d i s t i n g u i s h i n g the two groups under i n v e s t i g a t i o n from the groups known as " E a s t " and "West" i n the more p u b l i c i z e d Cold War c o n f l i c t . The b u l k o f t h i s s tudy w i l l be an i n v e s t i g a t i o n i n one sub-area of Nor th-South t rade r e l a t i o n s h i p s - i n t e r n a t i o n a l t i n agreements. I have at tempted, n e v e r t h e l e s s , to c o n s i d e r Nor th-South t rade r e l a t i o n s and i s s u e s at the "macro" l e v e l i n the f i r s t p a r t of the s tudy w i t h a v iew to p u t t i n g the remainder of the study i n proper p e r s p e c t i v e . C o n c e n t r a t i n g on N o r t h -South b a r g a i n i n g i n the t rade of one commodity and w i t h re spect to the i s sue of commodity p r i c e c o n t r o l ( f o r t h i s i s what t i n agreements are about) c e r t a i n l y repre sent s a d r a s t i c c i r c u m s c r i p t i o n of the va s t and r i c h a r r a y of ques t ions t h a t Nor th-South t rade r e l a t i o n s h i p s and i s sue s present to the i n t e r e s t e d r e s e a r c h e r . T h i s p o i n t should become ev ident even i n my b r i e f treatment of the nature and i s sue s of Nor th-South t rade i n Chapter One. However, g iven the c o n s t r a i n t s of l e n g t h and t i m e , I have reasoned tha t an i n - d e p t h study would be more f r u i t f u l and s a t i s f y i n g than a comprehensive but s u p e r f i c i a l s tudy . H o p e f u l l y , the study w i l l suggest - 2 -the p o s s i b l e d i r e c t i o n s f o r f u t u r e r e s e a r c h i n o ther areas and aspects o f Nor th-South t rade r e l a t i o n s . F o c i of Study My focus on b a r g a i n i n g s t r a t e g i e s r e f l e c t s a fundamental concern w i t h p o l i c y r e l e v a n t r e s e a r c h . I do not p r e t e n d , of cour se , tha t i n an e x p l o r a t o r y study of t h i s k i n d , p o l i c y recommendations can be made w i t h any degree o f c o n f i d e n c e . Thus suggest ions made i n terms o f b a r g a i n i n g s t r a t e g i e s f o r Southern c o u n t r i e s i n t i n n e g o t i a t i o n s must be taken as v e r y t e n t a t i v e . I n s h o r t , they are meant as a c h e c k - l i s t o f the range of p o s s i b l e s t r a t e g i e s tha t Southern c o u n t r i e s can employ r a t h e r than as f i r m p r e s c r i p t i o n s f o r a c t i o n . The genera l o r i e n t a t i o n of the s tudy toward a Nor th-South a x i s of c o n f l i c t s p r i n g s from an i n t e r e s t i n the impact o f the newly emergent n a t i o n s on the contemporary i n t e r n a t i o n a l system. These "New S t a t e s " present something o f an "unknown q u a n t i t y " to the i n t e r n a t i o n a l system and t h e i r impact has o n l y been r e c e n t l y r e c o g n i s e d . For example, t h e i r t h r u s t i n t o the w o r l d scene has o f t e n been thought to have f a c i l i t a t e d the growing detente between East and West i n the Cold War, tha t i s , the e x i s t e n c e of a s o - c a l l e d " T h i r d W o r l d " i s thought to have d i l u t e d the " b i p o l a r i t y " o f the contemporary i n t e r n a t i o n a l system. T h i s , however, i s not the p r o p o s i t i o n I w i s h to i n v e s t i g a t e , i f o n l y because there i s a l r e a d y ample treatment of i t i n the l i t e r a t u r e . " * " My concern i s w i t h a somewhat more r e c e n t l y i d e n t i f i e d a x i s o f c o n f l i c t , and, as I i n t e r p r e t - 3 -i t , one l a r g e l y d i v o r c e d from East-West c o n s i d e r a t i o n s . I t i s tha t c o n f l i c t between the advanced, i n d u s t r i a l i s e d c o u n t r i e s and the newly emergent underdeveloped or deve lop ing c o u n t r i e s , between the r i c h n a t i o n s and the poor n a t i o n s , between the Nor th and the South, tha t I w i s h to i n v e s t i g a t e . F o r , s u r e l y , the North-South c leavage , a l though economic i n o r i g i n and n a t u r e , has grave p o l i t i c a l i m p l i c a t i o n s f o r the s t a b i l i t y o f the i n t e r n a t i o n a l system. The p a u c i t y o f s t u d i e s on the p o l i t i c a l 2 i m p l i c a t i o n s o f t h i s i n t e r n a t i o n a l c leavage has spurred t h i s s tudy . F i n a l l y , there i s the focus o f the s tudy on Southern b a r g a i n i n g . There are a number o f j u s t i f i c a t i o n s one c o u l d g ive f o r choos ing a p a r t i c u l a r f o c u s , but u l t i m a t e l y , the c h o i c e h inges on the i n t e r e s t s of the r e s e a r c h e r . L e t me s t a t e from the out se t t h a t I am deeply concerned w i t h the for tunes of Southern c o u n t r i e s , i n p a r t i c u l a r , w i t h the manner i n which these c o u n t r i e s cope w i t h the problem of p o l i t i c a l and economic development i n an ever changing w o r l d . I n t e r n a t i o n a l a c t i o n prov ides one avenue through which Southern c o u n t r i e s can pursue the goa l o f development and t h i s has prov ided the major premise f o r my focus on Southern b a r g a i n i n g . Of c o u r s e , the Southern focus i s a l s o a convenient p o i n t of depar ture f o r an e x p l o r a t o r y study such as t h i s . A f t e r a l l , i t i s the South tha t p e r c e i v e s i t s e l f as the "aggr ieved p a r t y " i n North-South t rade i s sues and i t i s the Southern n a t i o n s t h a t are a g i t a t i n g f o r an overhau l or m o d i f i c a t i o n to the e x i s t i n g t r ade system. In s h o r t , major i n i t i a t i v e s f o r changes to the c u r r e n t Nor th-South t rade r e l a t i o n s h i p s emanate from - 4 -the South , the h i g h p o i n t of such a g i t a t i o n be ing the convening of the U n i t e d N a t i o n s Conference on Trade and Development (UNCTAD) i n 1964. In the language of n e g o t i a t i o n , the North-South t rade i s sue s may be charac-t e r i s e d as i n t e r n a t i o n a l b a r g a i n i n g o f " r e d i s t r i b u t i o n " where there e x i s t s 3 an " o f f e n s i v e " South making demands on a " d e f e n s i v e " N o r t h . The s t rong Southern i n t e r e s t ev inced r e c e n t l y on North-South t rade i s sue s has i t s e l f f u r t h e r p rov ided impetus to my i n t e r e s t i n t h e i r f o r t u n e s . O r g a n i z a t i o n o f Study The study i s presented i n three p a r t s , or chap te r s . The f i r s t , as n o t e d , presents an overview of North-South t rade r e l a t i o n s h i p s and i s s u e s . The second chapter begins a case study i n a p a r t i c u l a r sub-area of N o r t h -South t rade n e g o t i a t i o n s - i n t e r n a t i o n a l t i n agreements. The whole range o f North-South trade n e g o t i a t i o n s may perhaps be summarized a long the f o l l o w i n g o r g a n i z a t i o n a l and i s s u e - a r e a c o n t e x t s : 1) B i l a t e r a l , i s s u e - a r e a - s p e c i f i c - n e g o t i a t i o n s on a p a r t i c u l a r commodity or t rade i s s u e between a Nor thern and a Southern n a t i o n . 2) B i l a t e r a l , i s s u e - a r e a - g e n e r a l - n e g o t i a t i o n s on a wide range o f commodities and/or t rade i s sue s between a Nor thern and a Southern n a t i o n . 3 ) M u l t i l a t e r a l , i s s u e - a r e a - s p e c i f i c - n e g o t i a t i o n s on a commodity or t rade i s s u e between a number of Nor thern and Southern n a t i o n s . ( I n t e r n a t i o n a l Commodity Agreements are the prime example) . - 5 -4) M u l t i l a t e r a l , i s s u e - a r e a - g e n e r a l - n e g o t i a t i o n s on a wide range of commodities and/or t rade i s sue s between a number o f Nor thern and Southern c o u n t r i e s . (UNCTAD, GATT and other general-purpose t rade o r g a n i z a t i o n s and forums are good examples.) Thus the second p a r t of t h i s study examines North-South t rade n e g o t i a t i o n s o n l y i n the t h i r d c o n t e x t , tha t i s , o n l y one commodity - t i n - and one main i s s u e - p r i c e c o n t r o l - w i l l be i n v e s t i g a t e d . The o r g a n i z a t i o n a l i s s u e - a r e a context s may themselves be important " s i t u a t i o n a l " v a r i a b l e s a f f e c t i n g the outcome of n e g o t i a t i o n s . However, t h i s i s a p r o p o s i t i o n tha t can be examined o n l y a f t e r r e s e a r c h o f a comparative na ture i s conducted. I t i s the f i n a l chapter of the study tha t focuses on b a r g a i n i n g s t r a t e g i e s proper . I t w i l l encompass both the s t r a t e g i e s t h a t are known to have been used by Southern c o u n t r i e s i n t i n agreements and a range of s t r a t e g i e s tha t c o u l d be used. CHAPTER I THE NATURE AND ISSUES OF NORTH-SOUTH TRADE The P a r t i e s i n the Trade I s sue-Area In t h i s s tudy I am concerned w i t h the i n t e r a c t i o n s o f " t h e N o r t h " , or developed c o u n t r i e s , and " the S o u t h " , or l e s s developed c o u n t r i e s , i n the t rade i s s u e - a r e a . The n o t i o n of the s e c t o r a l i s s u e - a r e a p o s t u l a t e s a wider system o f i n t e r a c t i o n s or " i n t e r n a t i o n a l sys tem" , encompassing many o ther issue-areas." '" Robert W. Cox has noted the use fu lnes s o f the concept i n the f o l l o w i n g terms: The dev i ce of the s e c t o r a l i s s u e - a r e a system should enable the p o l i t i c a l s c i e n t i s t to embrace the h i s t o r i a n ' s b r e a t h o f e x p l o r a t o r y power and yet f i t t h i s i n t o a framework which cou ld be used f o r comparisons between i s s u e - a r e a systems so as both to y i e l d some g e n e r a l i n s i g h t s i n t o processes of i n t e r n a t i o n a l p o l i t i c s , and . . . . t o show what d i f f e r e n c e s there may be i n the d i s t r i b u t i o n of power as between d i f f e r e n t i s s u e - a r e a s . ^ Al though t h i s s tudy does not address i t s e l f d i r e c t l y to the broad purposes mentioned above, I have found the n o t i o n of i s s u e - a r e a a u s e f u l method of d e l i n e a t i n g the area and i s sue s of Nor th-South t r a d e . The t rade i s s u e -a r e a , I t h i n k , stands out d i s t i n c t l y as a " sub-system" i n the t o t a l i n t e r n a t i o n a l i s s u e - a r e a system, and i n g e n e r a l s a t i s f i e s what James N . Rosenau has i d e n t i f i e d as the c r i t e r i a f o r d e l i n e a t i n g i s s u e - a r e a s , v i z . : (1) a c l u s t e r o f v a l u e s , the a l l o c a t i o n of which (2) l eads the a f f e c t e d o r p o t e n t i a l l y a f f e c t e d a c t o r s to d i f f e r so g r e a t l y over (a) the way i n which the va lue s should be a l l o c a t e d or (b) the h o r i z o n t a l l e v e l s a t which the a l l o c a t i o n s should be a u t h o r i z e d tha t (3) they engage i n d i s t i n c t i v e behav ior f o r the a t ta inment o f t h e i r p a r t i c u l a r v a l u e s . 3 - 6 -- 7 -Essentially this means that a set of international interactions qualify as an issue-area i f they exhibit a distinctive pattern of conflict in the 4 manner authoritative values are allocated among the actors. I think there is ample evidence to suggest that North-South trade interactions do exhibit such distinctiveness and conflict. Furthermore, there i s reason to believe that for the bulk of LDC's, general economic and trade issues tend to predominate over politico-military issues in their interactions with other nations.^ The North-South trade question has, however, come into prominence only relatively recently, reaching a high point during the early 1960s when the LDC's banded together f i r s t as the "Group of 75" at the United Nations and then as "the Group of 77" at the f i r s t UNCTAD conference. This led to an informal "group system" in the trade issue-area which I shall now br i e f l y describe.' The Group of 77: This is the LDC grouping which we shall take as synonymous with "the South" (although we would also include new recruits beyond the original 77). This grouping f i r s t emerged as a caucus group at the UN in the early 1960s and consisted originally of the "75" which had pressed for the convening of a trade conference to discuss outstanding g North-South trade issues. At UNCTAD they became known as the "77". The group i s characterized by a heterogeneous composition of countries of various p o l i t i c a l and ideological persuasions, with the leadership roles f i l l e d by the larger countries, particularly Algeria, Brazil, India, 9 Nigeria, Pakistan, United Arab Republic and Yugoslavia. There i s no - 8 -i n s t i t u t i o n a l i z e d group mach inery , a l though B r a n i s l a v Gosovic notes tha t the UNCTAD S e c r e t a r i a t has had a s p e c i a l l y c o r d i a l r e l a t i o n s h i p w i t h the " 7 7 " . T h i s i s not s u r p r i s i n g c o n s i d e r i n g tha t the S e c r e t a r y -G e n e r a l , Rau l P r e b i s c h , was the l e a d i n g champion of the Southern cause. C o n f l i c t s w i t h i n the group s p r i n g from t h e i r d i f f e r e n t l e v e l s of economic development and the s p e c i a l t i e s v a r i o u s Southern groups have w i t h d i f f e r e n t Nor thern groups. In the m a i n , these are the t i e s the Yaounde group of A f r i c a n n a t i o n s have w i t h the EEC, the t i e s L a t i n American n a t i o n s have w i t h the U n i t e d S ta tes through the OAS, and f i n a l l y the t i e s former B r i t i s h c o l o n i e s have w i t h the Commonwealth. The " B " Group: As a counter measure to the c r e a t i o n o f UNCTAD, the Western c o u n t r i e s ( i n c l u d i n g Japan) organ ized themselves around the a l r e a d y e x i s t i n g machinery o f the O r g a n i z a t i o n f o r Economic Coopera t ion and Development (OECD). Thus the " B " Group comprise the OECD c o u n t r i e s , namely the members o f the European Economic Community, B e l g i u m , F r a n c e , F e d e r a l R e p u b l i c of Germany, I t a l y , Luxembourg and N e t h e r l a n d s ; the members of the European Free Trade A s s o c i a t i o n , A u s t r i a , Denmark, Norway, P o r t u g a l , Sweden, S w i t z e r l a n d and U n i t e d Kingdom; Greece, I c e l a n d , S p a i n , Turkey , USA, Canada, and Japan. The l e t t e r " B " r e f e r s to t h e i r d e s i g n a t i o n as. the B l i s t of n a t i o n s among four l i s t s o f UNCTAD members d i v i d e d f o r purposes of e l e c t i o n to pos t s i n the o r g a n i z a t i o n . Gosovic notes three c leavages i n the B Group: 1) the i n t e r e s t s o f Turkey , Spain and Greece are o f t e n c l o s e r to those o f the " 7 7 " than to those of - 9 -the o ther OECD members; 2) the l a r g e r c o u n t r i e s as compared w i t h the s m a l l e r c o u n t r i e s are l e s s sympathet ic toward the LDC's and 3) a French-US c o n f l i c t r e l a t e d to the q u e s t i o n of respons iveness toward L D C ' s . ^ We s h a l l take t h i s group to be " t h e N o r t h " . The " D " Group: T h i s grouping i s composed o f the c e n t r a l l y planned c o u n t r i e s of E a s t e r n Europe, spearheaded by the S o v i e t U n i o n . ( "D" h e r e , as w i t h the " B " Group, r e f e r s to the UNCTAD l i s t s ) . There i s a tendency f o r t h i s group to support the LDC demands, a l though i t i s by and l a r g e a m a r g i n a l a c t o r i n the North-South c o n f l i c t . Gosovic p o i n t s out tha t i n exchange f o r p o l i t i c a l suppor t , the D group may expect the " 7 7 " to t r e a t 12 i t more f a v o u r a b l y than the West. I have excluded t h i s group from my d e f i n i t i o n of Nor th and South , a l though i f the d e f i n i t i o n i s to f o l l o w s t r i c t r i c h - p o o r l i n e s , some of the more developed c o u n t r i e s of t h i s camp should be cons idered as members of the N o r t h . However, there i s r e l a t i v e l y l i t t l e t rade between the D Group and the LDC's and t h e i r e x c l u s i o n i s t h e r e f o r e not wi thout j u s t i f i c a t i o n . Thus, the two dominant groups of a c t o r s i n the t r ade i s s u e - a r e a are the Group of 77 and the B Group, which f or the purposes of t h i s study w i l l be r e f e r r e d to as South and N o r t h r e s p e c t i v e l y . The Nature of Nor th-South Trade As we are i n t e r e s t e d i n Nor th-South b a r g a i n i n g i n the t rade i s s u e - a r e a , i t i s important t h a t we a s c e r t a i n the r e l a t i v e s takes and - 10 -i n t e r e s t s t h a t the Nor th and the South have i n t r a d i n g w i t h each o t h e r . I i n t e n d to do t h i s by comparing f lows of t rade between and among Nor thern and Southern c o u n t r i e s . We f i n d from examining such f lows tha t i n g e n e r a l there i s much g r e a t e r t rade among Nor thern c o u n t r i e s than there i s between Nor thern and Southern c o u n t r i e s . Furthermore , Southern c o u n t r i e s t rade much l e s s w i t h themselves than they do w i t h Nor thern c o u n t r i e s . The f i g u r e s on Table I - A a l s o show tha t the v a l u e o f Nor thern t rade f a r exceeds tha t of Southern t r a d e , a l though t rade i n genera l tends to be more important f o r the South than i t i s f o r the N o r t h , i f we take export s as percentage o f GNP to be an i n d i c a t o r of t h i s importance . On c l o s e r i n s p e c t i o n , the export f lows of the two groups show t h a t N o r t h -t o - N o r t h t rade amounted to $147.9 b i l l i o n , w h i l e North-to-rSouth t rade amounted to o n l y $37.5 b i l l i o n i n 1969. Whi l e the N o r t h - t o - N o r t h t rade accounted f o r 7.9 per cent o f t o t a l Nor thern GNP (1966), the N o r t h - t o -South t rade represented a mere 1.9 per cent o f Nor thern GNP. As f o r the South, export f lows among Southern c o u n t r i e s were o n l y $10.3 b i l l i o n w h i l e t h e i r expor t s to the Nor th amounted to $36.4 b i l l i o n , more than three t imes as much as t h e i r t rade w i t h each o t h e r . The South-to-South t rade o n l y accounted f o r 3.9 per cent of Southern GNP, w h i l e the South-t o - N o r t h t rade r e g i s t e r e d a h i g h 10.2 per cent o f GNP i n 1966. What do a l l these f i g u r e s mean? Quite c l e a r l y they show tha t the Southern s take i n t rade w i t h the N o r t h i s r e l a t i v e l y m u c h g rea te r than the Nor thern s take i n t rade w i t h the South . The c o r o l l a r y i s tha t the Nor thern c o u n t r i e s ' s take i n t r a d i n g among themselves i s much g r e a t e r - 11 -TABLE I A. TOTAL TRADE OF NORTH AND SOUTH, 19691 (US $ millions) Exports as Total GNP % of GNP Combined Exports Imports (1966) (1966) Developed Market Economies (North) .398,300 193,600 204,700 1,519,200 9.3 Developing Market Economies (South) 99,400 49,300 50,100 274,800 14.2 Total 497,700 242,900 254,800 1,794,000 v 10.1 B. NORTH-SOUTH TRADE, 1969  Exports From North to North From North to South From South to North From South to South US $ Billions 147.9 37.5 36.4 10.3 Exports as % of 1966 GNP 7.9 1.9 10.2 3.9 Excludes trade of Centrally Planned Economies. Source: Compiled from United Nations St a t i s t i c a l Yearbook, 1970, New York, 1971. For precise definitions of Developed Market Economies, Developing Market Economies and Centrally Planned Economies, see p. 398. - 12 -than their stake in trading with the South, while the opposite i s true for Southern countries, who have only a relatively small stake in trading with each other. This would in part explain why Southern countries are so much more interested in North-South trade issues than are perhaps 13 Northern countries. The Southern stake in North-South trade i s further augmented when we consider that the gains from trade are urgently needed for economic development. Export earnings contribute in no small way toward the.goal of economic development. In the main, they are used 14 to finance v i t a l l y needed capital goods essential for such development. Commodity Trade: Turning now to the nature or type of goods traded, the most striking feature of Southern trade is the heavy, usually lop-sided dependence on primary commodities: Almost 90 per cent of the export earnings of developing countries derive from primary products. Moreover, nearly half of those countries earn more than 50 per cent of their export receipts from a single primary commodity. As many as three-quarters of them earn^ more than 60 per cent from three primary products. Thus, in a very real sense, primary commodity trade is the economic lifeblood of the South. This consideration, however, often beclouds the fact that Southern countries export only under one-half of the world's primary commodities, and i f fuels are excluded from the calculation, 16 the Southern share f a l l s to one-third. (In fact, i f we consider only the South-to-North flow of primary commodities, my figures in - 13 -Table II show that Southern exports to major Northern countries account for a mere 28.7 per cent of the latters' imports of primary commodities). In short, Northern countries are as important, i f not more important than LDC's as primary commodities exporters. This fact dispels a popular notion that Northern countries are merely buyers of primary commodities and Southern countries their supply source. In reality, Northern and Southern countries are also competitors in primary commodity trade, where ironically, the group that is more dependent on commodity trade actually exports less than the group not so dependent on i t . (Consider the number of countries in the North and the number in the South and the asymmetry becomes even more lop-sided). Moreover, a number of tropical raw materials are up against competition from synthetics produced in the North. The unkindest cut of a l l i s that in terms of markets, the North remains of paramount importance, absorbing some 75 per cent of LDC primary commodities.^ LDC commodity trade with the North is usually classified according to non-competing and competing products. Let us examine these two categories of commodities briefly. Non-competing products: For the most part, these comprise the tropical beverages, coffee, tea and cocoa, and the minerals, tin and manganese products for which there are no close Northern substitutes. These five commodities account for some 95 per cent of non-competing pro-ducts, which goes to show that there are not very many primary commodities that do not compete with Northern counterparts. Tin and coffee are marketed under international commodity agreements. There are relatively - 14 -few t rade r e s t r i c t i o n s on these products except f o r some export l e v i e s 18 and e x c i s e t axes . The main problem f o r these commodit ies , r a t h e r , i s tha t " w o r l d demand prospects are s imply not f avourab le compared to those 19 of manufactures . 1 1 For example, i t has been p o i n t e d out tha t pr imary commodities i n genera l and f o o d s t u f f s i n p a r t i c u l a r tend to be c h a r a c t e r i -sed by s l u g g i s h demand because as incomes r i s e , a d d i t i o n a l income i s spent not on such products but on l u x u r y i t ems . The m i n e r a l s are somewhat unaf fec ted by t h i s problem as they are used i n i n d u s t r i a l p r o d u c t i o n but then they c o n s t a n t l y face the problem of s y n t h e t i c s u b s t i t u t e s . A f u r t h e r d i f f i c u l t y f o r these products i n g e n e r a l , and p a r t i c u l a r l y w i t h the beverages , i s that t h e i r output and demand are unrespons ive to p r i c e 20 changes i n the s h o r t - r u n . In o ther words , supply and demand are s a i d to be i n e l a s t i c i n the s h o r t - r u n because the nature of p r o d u c t i o n i s such tha t f o r any p e r i o d there tends to be a f i x e d l e v e l of ou tput . Thus, the most urgent problem f o r these product s i s export i n s t a b i l i t y , t h a t i s , the wide v a r i a t i o n i n the p r i c e s tha t these products f e t c h on the w o r l d market . Hence the need f o r the p r i c e c o n t r o l l i n g mechanisms o f commodity agreements. Competing p r o d u c t s : The main Southern commodities tha t compete w i t h N o r t h e r n counterpar t s are 1) r u b b e r , f a c i n g c o m p e t i t i o n from s y n t h e t i c s ; 2) c o t t o n , j u t e and o i l s e e d s , f a c i n g c o m p e t i t i o n from s y n t h e t i c s and Nor thern s u b s t i t u t e s or Nor thern p r o d u c t i o n of the commodity; and 3) maize , sugar , tobacco , wood and lumber , pe t ro leum, copper , l e a d , z i n c - 15 -and a luminium, which are a l s o produced i n the N o r t h . Because these products or s u b s t i t u t e s are a l so found i n the N o r t h , there are c o n s i d e r a b l e r e s t r i c t i o n s on t h e i r i m p o r t . Here , prospects f o r r a p i d expansion of export earnings [of LDC'§7 depend on the w i l l i n g n e s s o f developed c o u n t r i e s to r e l a x r e s t r i c t i o n s on imports as w e l l as on the a b i l i t y o f the deve lop ing c o u n t r i e s to improve the q u a l i t y and genera l compe-t i t i v e n e s s o f t h e i r p roduc t s . 21 F reer access o f such Southern products i n t o Nor thern markets i s not l i k e l y , however, because o f the e x i s t e n c e of powerful p r o t e c t i o n i s t f o r c e s i n the Nor th f o r these produc t s . Th i s p o i n t w i l l be pursued when we d i s c u s s the t rade l i b e r a l i z a t i o n i s s u e . Table I I i s a summary of the Sou th- to -Nor th f low of twenty o f the most important Southern pr imary commodit ies . LDC's as de f ined i n the t a b l e are synonymous w i t h my d e f i n i t i o n of the South. However, o n l y the major Nor thern c o u n t r i e s of the OECD, or the B Group of UNCTAD, have been i n c l u d e d (See T a b l e , note 2 ) . N e v e r t h e l e s s , s i n c e the s m a l l e r Nor thern c o u n t r i e s excluded account f o r o n l y a minor p o r t i o n o f the import of these commodit ies , t h e i r e x c l u s i o n does not d i s t u r b the v a l i d i t y o f the f i g u r e s to any e x t e n t . The 20 commodities h i g h l i g h t e d i n the t a b l e account f o r 78.3 per cent of Southern pr imary commodity export to t h i s Nor thern market . Column one i n d i c a t e s Nor thern import va lue s f o r . t h e s e 20 commodities from a l l sources ; column two, the va lue s of these same commodities imported from the South o n l y ; column t h r e e , the Southern share of the market f o r these commodities as a percentage ; column f o u r , - 16 -the rank order of these commodities a ccord ing to share of the market ; column f i v e , the Southern share as a percentage of t o t a l Southern export s to t h i s market ; and column s i x , the rank order of these commodities accord ing to Southern share as a percentage of Southern t o t a l . Even a c u r s o r y i n s p e c t i o n would convey to the reader the importance of these 20 commodities to the South i n terms o f the t w i n c r i t e r i a of va lue o f t rade and share of market . (They account f o r 67.3 per cent of the Nor thern market and c o n s t i t u t e 78.3 per cent of t o t a l Southern export to t h i s market . ) However, i t i s a l s o ev ident tha t Nor thern imports o f pr imary commodities are by no means r e s t r i c t e d to these 20 commodit ies ; o ther i tems account f o r more than twice the Nor thern import v a l u e f o r these 20 commodit ies , where the Southern share i s o n l y 9.3 per c e n t . Manufactures Trade : Southern export of manufactured and semi-manufactured goods amounted to some $5.5 b i l l i o n , r e p r e s e n t i n g a t i n y 5 per cent o f t o t a l w o r l d expor t s i n manufactures , and approx imate ly 16 per cent of t o t a l 22 Southern export s i n 1964. The N o r t h absorbed t w o - t h i r d s of t h i s t o t a l , but t h i s accounted on an average f o r o n l y 5 per cent of t o t a l , imports of 23 manufactured goods i n t o the N o r t h . A g a i n , the message i s c l e a r : the Southern s take i n t rade w i t h the Nor th i s much g r e a t e r than the l a t t e r ' s s take i n t rade w i t h the South. In f a c t , the Nor thern s take i n manufac-t u r e s t rade w i t h the South i s minuscu le . In commodity t rade we saw tha t TABLE I I PRIMARY COMMODITIES:1 IMPORTS INTO NORTHERN COUNTRIES, 2 1967 ^ (US $ m i l l i o n s ) LDCs' Share From a l l From, LDCs' Share as % of Commodity Sources LDCs (%) Order LDC T o t a l Order MEAT, f r e s h c h i l l e d or f r o z e n 2 ,229.0 507.9 22.8 19 1.9 9 MAIZE 1,451.6 478.7 33.6 17 1.8 10 SUGAR & HONEY 1,423.9 1,071.6 75.3 9 4 .0 5 COFFEE 2 ,132.4 2 ,054 .1 96.3 2 7.8 2 COCOA 630.0 523.0 83.0 8 2 .0 8 TEA & MATE 445.9 415.6 93.2 4 1.7 11 VEGETABLE OILS & FATS 695.5 389.9 56.1 13 1.5 12 TOBACCO 990.1 231.9 23.4 18 0.9 15 NATURAL RUBBER 627.2 609.4 97.2 1 2 .3 7 WOOD & LUMBER 2 ,484.8 1,523.5 61.3 11 5.7 4 WOOL 1,718.5 239.0 13.9 20 0.9 14 COTTON 2 ,780.9 1,655.4 59.5 12 6.2 3 JUTE 184.6 174.0 94.3 3 0.7 17 IRON 2 ,005.9 1,046.0 52.2 15 4 .0 6 COPPER 333.2 179.5 53.9 14 0.7 16 BAUXITE & ALUMINIUM 289.7 255.2 88.1 7 1.0 13 LEAD & ZINC 344.2 122.1 35.5 16 0.5 19 TIN 143.5 132.0 92.0 5 0.5 18 MANGANESE 187.3 121.3 64.8 10 0.5 20 PETROLEUM 9,848.8 9 ,029.8 91.7 6 34.1 1 T o t a l 20 i tems 30 ,867.3 20,759.9 67.3 78.3 A l l o ther items 61,440.9 5 ,737.4 9.3 21.7 T o t a l a l l i tems 92,308.2 26 ,497.3 28.7 100.0 ± P r i m a r y commodities are de f ined by SITC s e c t i o n s 0-4. 2 N o r t h e r n c o u n t r i e s are de f ined here as the OECD ( O r g a n i z a t i o n f o r Economic Coopera t ion and Development) c o u n t r i e s , e x c l u d i n g I c e l a n d , Greece and Turkey. Other OECD c o u n t r i e s are USA, Canada, Japan and the c o u n t r i e s o f EEC and EFTA. 3 LDCs i n c l u d e a l l non-OECD members of the w o r l d , except the C e n t r a l l y Planned C o u n t r i e s ( except ing Y u g o s l a v i a ) , South A f r i c a , A u s t r a l i a and New Zea land . Source : Compiled from OECD F o r e i g n Trade. S e r i e s C. Commodity Trade: Import s , 1967, V o l . 1. - 18 -the Southern share of the Northern market was nearly one-half; in manufactures trade i t is only one-twentieth! On inspecting the Southern flow of manufactured goods to Northern countries, we discover an interesting feature: Southern exports of manufactured and semi-manufactured goods are not ideally distributed among Souther countries, to say the least. As few as 20 countries contributed as much as 82 per cent of the total Southern exports to Northern countries in 1967 (see Table III). In fact, the top ten exporters - Hong Kong, Chile, Zambia, India, Congo, Mexico, Malaysia, Peru, Israel and Taiwan -accounted for 67.1 per cent of the total. Moreover, the values of exports vary widely even among the top contributors. (For example, Hong Kong's export value is about nine times that of Pakistan.) This means that the Southern stake in manufactures trade with the North is 24 somewhat asymmetrical. In the long-run, however, this asymmetry w i l l 25 tend to level off as more LDC's begin to industrialize. This is not an unrealistic assumption as industrialization i s almost always a foremost goal among LDC's. In fact, the South often r a l l i e s around the argument that trade in manufactured goods holds out the greatest promise for the future, given the extraordinary growth in the Southern export of manufactures on the recent years. (A rate of 12.7 per cent per year 2 6 between 1959-60 and 1965-66 was recorded. ) Because of the favourable prospects that manufactures trade hold for Southern countries, they have generally decried the highly prevalent Northern trade restrictions on the import of Southern manufactures and semi-manufactures. The Pearson - 19 -TABLE I I I SOUTHERN EXPORTS BY PRINCIPAL COUNTRIES OF MANUFACTURES AND  SEMI-MANUFACTURES1 TO NORTHERN COUNTRIES, 2 1967 Value (US $ m i l l i o n s ) % of T o t a l HONG KONG 966.2 16.2 CHILE 603.0 10.1 ZAMBIA 555.5 9.3 INDIA 456.5 7.7 CONGO, Dem. Rep. 376.0 6.3 MEXICO 245.5 4 .1 MALAYSIA 226.0 3.8 PERU 217.6 3.7 ISRAEL 189.4 3.2 TAIWAN 161.0 2.7 SOUTH KOREA 148.1 2.5 PAKISTAN 106.6 1.8 BRAZIL 95.8 1.6 THAILAND 94.1 1.6 IRAN 93.4 1.6 PHILIPPINES 79.4 1.3 SIERRA LEONE 72.4 1.2 ARGENTINA 56.5 1.0 ANGOLA 46.5 0.8 JAMAICA 43.6 0.7 T o t a l 20 c o u n t r i e s 4 ,893 .1 82.0 Other LDCs 1,072.5 18.0 T o t a l a l l LDCs 5 ,965.6 100.0 Manufactures and semi-manufactures a re de f ined by SITC s e c t i o n s 5-8 . SITC Code 5 : Chemicals SITC Code 6: Manufactured goods c l a s s i f i e d c h i e f l y by m a t e r i a l . SITC Code 7: Machinery and t r a n s p o r t equipment SITC Code 8 : M i s c e l l a n e o u s ^They are de f ined here as i n Table I Source : Compiled OECD F o r e i g n Trade. S e r i e s C. Commodity  Trade : Import s , 1967. V o l . 1 - 20 -Commission underscores the extent o f Nor thern q u a n t i t a t i v e r e s t r i c t i o n s on Southern manufactures i n the f o l l o w i n g passage: E x c l u d i n g petro leum p r o d u c t s , base m e t a l s , and s h i p s (which have been " e x p o r t e d " to developed c o u n t r i e s f o r r e p a i r s ) , no l e s s than 30 per cent o f manufactured goods are sub jec t to q u a n t i t a t i v e r e s t r i c t i o n s . Cot ton t e x t i l e s and c l o t h i n g and processed f o o d s t u f f s are sub jec t to such r e s t r i c t i o n s i n most weal thy c o u n t r i e s . In a d d i t i o n , a number impose r e s t r i c t i o n s on non-co t ton t e x t i l e s and l e a t h e r a r t i c l e s , footwear , d y e s t u f f s , g l a s s and g lassware .27 As f o r t a r i f f b a r r i e r s , imports from Southern c o u n t r i e s are s t i l l sub jec t to c o n s i d e r a b l y h i g h e r r a t e s than those from Nor thern c o u n t r i e s , and even the Kennedy Round of t a r i f f r e d u c t i o n s c a r r i e d out under GATT i n 1967 has l a r g e l y r e s u l t e d i n " p r o p o r t i o n a t e l y l a r g e r r e d u c t i o n s i n t a r i f f s on 28 products o f i n t e r e s t to developed c o u n t r i e s . " We are now v e r g i n g on the i s s u e s of North-South t rade which w i l l be the sub jec t o f d i s c u s s i o n i n the next s e c t i o n . Southern Complaints Aga ins t the Trade System: Key Issues Southern compla int s aga ins t the e x i s t i n g t rade system cent re around the argument the present t rade pa t t e rns i n one way or another m i l i t a t e aga ins t t h e i r economic growth. These compla int s cu lminated i n the convening and c r e a t i o n o f UNCTAD and are bes t expressed i n the j o i n t d e c l a r a t i o n o f the Group o f 75 made at the UN Genera l Assembly i n the F a l l 29 o f 1963, preced ing the Geneva Conference. The Group of 75 s t a t e d tha t w h i l e i n t e r n a t i o n a l t rade c o u l d be a more powerful instrument and v e h i c l e o f economic development, " t h e e x i s t i n g p r i n c i p l e s and p a t t e r n s of w o r l d - 21 -t rade s t i l l m a i n l y favour the advanced p a r t s of the w o r l d " and tha t present t r e n d s , i n s t e a d of h e l p i n g deve lop ing c o u n t r i e s to promote the development and d i v e r s i f i c a t i o n o f t h e i r economies, f r u s t r a t e t h e i r e f f o r t s to a t t a i n more r a p i d growth. They argued t h a t to remedy the s i t u a t i o n , " t h e volume of t h e i r t rade should be increa sed and i t s compos i t ion d i v e r s i f i e d ; the p r i c e s o f t h e i r exports should be s t a b i l i s e d at f a i r renumerat ive l e v e l s " and " i n t e r n a t i o n a l t r a n s f e r s of c a p i t a l should be made more f a v o u r a b l e " ; and t h a t a "dynamic i n t e r n a t i o n a l t rade p o l i c y " i s r e q u i r e d . Such a p o l i c y should be based on the need to recogni se the s p e c i a l p o s i t i o n o f the LDC's and the need to p rov ide them w i t h s p e c i a l a s s i s t a n c e . The removal of impediments to t rade i s not enough and should be b u t t r e s s e d by p o s i t i v e measures d i r e c t e d toward a c h i e v i n g a new i n t e r n a t i o n a l d i v i s i o n o f l a b o u r . More s p e c i f i c a l l y , the deve lop ing c o u n t r i e s hoped tha t the convening o f an i n t e r n a t i o n a l t rade conference would l e a d to the f o l l o w i n g a c t i o n s : 1) C r e a t i o n of c o n d i t i o n s f o r the expansion o f t rade between c o u n t r i e s a t a s i m i l a r l e v e l o f development, at d i f f e r e n t stages of development or hav ing d i f f e r e n t systems o f s o c i a l and economic o r g a n i z a t i o n ; 2) P r o g r e s s i v e r e d u c t i o n and e a r l y e l i m i n a t i o n of a l l b a r r i e r s and r e s t r i c t i o n s impeding the expor t s of LDC's w i t h o u t r e c i p r o c a l concess ions on t h e i r . p a r t ; 3) Increase i n the volume of export s o f the deve lop ing c o u n t r i e s i n pr imary p r o d u c t s , bo th raw and proces sed , to the i n d u s -t r i a l c o u n t r i e s , and s t a b i l i z a t i o n of p r i c e s at f a i r remunera-t i v e p r i c e s ; - 22 -4) Expansion of the markets f o r exports o f LDC manufactures and semi-manufactured goods; 5) P r o v i s i o n of more adequate f i n a n c i a l re sources a t f avourab le terms so as to enable LDC's to i n c r e a s e t h e i r imports o f c a p i t a l goods and i n d u s t r i a l raw m a t e r i a l s e s s e n t i a l f o r t h e i r economic development, and b e t t e r c o - o r d i n a t i o n o f t rade and a i d p o l i c i e s ; 6) Improvement of the i n v i s i b l e t rade of deve lop ing c o u n t r i e s , p a r t i c u l a r l y by reduc ing t h e i r payments f o r f r e i g h t and insurance and the burden o f t h e i r debt charges ; and 7) Improvement of i n s t i t u t i o n a l arrangements, i n c l u d i n g , i f neces sa ry , the e s tab l i shment of new machinery and methods 30 f o r implementing the d e c i s i o n s of the Conference. The main themes o f the j o i n t d e c l a r a t i o n of the " 7 5 " were f u l l y expounded i n the " P r e b i s c h R e p o r t " , e n t i t l e d , "Toward a New Trade P o l i c y 31 f o r Development" , w h i c h , i n e f f e c t , embodies the main Southern compla int s aga ins t the e x i s t i n g t rade system and proposa l s f o r i t s changes. The "Trade Gap"; The s t a r t i n g p o i n t of the Report i s the n o t i o n of the " t r a d e gap" , which i n s imple terms, i s the gap between the need f o r imports of c a p i t a l goods e s s e n t i a l to s u s t a i n a g i v e n development e f f o r t and the export earnings l i k e l y to be a v a i l a b l e to f i n a n c e these i m p o r t s . The Report s t a t e s : Unless these measures //suggested i n the Report J are adopted, the t rade gap of the deve lop ing c o u n t r i e s w i l l be immense; a v a i l a b l e e s t imates show t h a t , i f the f a c t o r s r e s p o n s i b l e f o r the present t rend i n w o r l d t rade c o n t i n u e , the gap may reach an order of magni-tude of about $20,000 m i l l i o n by 1 9 7 0 . . . 3 2 - 23 -The $20 b i l l i o n gap i s , o f c o u r s e , " p o t e n t i a l and not r e a l " and assumes the f o l l o w i n g c o n d i t i o n s : (a) a 5 per cent t a r g e t annual income growth r a t e f o r L D C ' s , the r a t e set out as one of the goals of the Development Decade; (b) an annual import growth r a t e of 6 per c e n t , and (c) an i n c r e a s e i n the purchas ing power of LDC export s of 2 per cent per annum. Any of the assumptions c o u l d , of cour se , be changed by i n c r e a s e d c a p i t a l i n f l o w s , above-average i n c r e a s e i n export s or improvement i n the terms of t rade o f L D C ' s . F o l l o w i n g P r e b i s c h , o ther s have made more d e t a i l e d c a l c u l a t i o n s of the gap. One such p r o j e c t i o n , by B e l a B a l a s s a , worked out a range o f e s t i m a t e s , w i t h the mean c e n t e r i n g around the f i g u r e o f $12 b i l l i o n . 3 3 Having thus set the t a rge t o f f i l l i n g a $20 b i l l i o n t rade gap, the P r e b i s c h Report goes on to examine the prospects f o r f i l l i n g t h i s gap and f i n d s them f a r from p r o m i s i n g . Some of the reasons f o r the poor prospect s are adduced as the i n e v i t a b l e s t r u c t u r a l consequences o f t e c h n o l o g i c a l p r o g r e s s , namely: 1) the development of s y n t h e t i c s u b s t i t u t e s f o r n a t u r a l raw m a t e r i a l s ; 2) a d i m i n i s h i n g raw m a t e r i a l content i n manufactures ; and 3) a g radua l r e l a t i v e s h i f t i n demand away from e s s e n t i a l s , such as f o o d s t u f f s and o ther s t a p l e consumer goods toward i n d u s t r i a l goods and s e r v i c e s , as per c a p i t a income i n c r e a s e s . Other o b s t a c l e s are the r e s u l t of r e s t r i c t i v e p o l i c i e s i n developed c o u n t r i e s , s u c h as , - 24 -1) p r o t e c t i o n of h i g h - c o s t temperate a g r i c u l t u r e , o f t e n l e a d i n g to surp lus p r o d u c t i o n ; and 2) taxes and d u t i e s on t r o p i c a l p r o d u c t s . D e t e r i o r a t i n g Terms of Trade : I n d e s c r i b i n g the demand trends o f pr imary commodities , P r e b i s c h develops a genera l t h e s i s concerning the terms of t rade o f L D C ' s . In economics, the concept r e f e r s to the r a t i o , between the p r i c e of an average u n i t of i t s i m p o r t s , the most s imple r e p r e s e n t a t i o n of t h i s b e i n g , Export p r i c e index T t . *. ^ . u * J • J • . . t , -=—*- E—: :—:— . In s h o r t , the terms o f t rade i n d i c a t e s the Import p r i c e index 34 purchas ing power of export s over i m p o r t s . The P r e b i s c h Report contended that the terms o f t rade o f pr imary commodities r e l a t i v e to manufactures tend to d e t e r i o r a t e . Consequent ly , because LDC's are l a r g e l y expor te r s of pr imary products and importer s of manufactures , i t i s argued tha t t h e i r terms o f t rade tend to be i n c r e a s i n g l y disadvantageous . The a n a l y s i s o f the causes i s somewhat complex, but s u f f i c e i t to say , the i m p l i c a t i o n i s t h a t the e x i s t i n g wor ld economic order i s b i a s e d aga ins t pr imary producing c o u n t r i e s and tends to r e s u l t i n a l o s s of resources f o r LDC's through t r a d e . Al though P r e b i s c h denies tha t h i s t h e s i s i s an "immutable l a w " , he n e v e r t h e l e s s p a i n t s a gloomy p i c t u r e of the a b i l i t y of LDC's to overcome t h i s problem: I t i s obvious t h a t , i f t e c h n o l o g i c a l progress i n pr imary p r o d u c t i o n i s i n t e n s i f i e d and i f technology i n the deve lop ing c o u n t r i e s a l s o undergoes a r e v o l u t i o n , wi thout which they cannot grow f a s t e r , the tendency of the terms o f t rade to d e t e r i o r a t e may even be s t ronger than i n the p a s t . Th i s i s not a p r e d i c t i o n . B u t , what f a c t o r s can we descry on the economic h o r i z o n that are capable of c o u n t e r i n g t h i s tendency? 3 ^ - 25 -P r e b i s c h ' s t h e s i s has been c h a l l e n g e d . b y o ther economists and remains c o n t r o v e r s i a l . For example, i t has been argued t h a t the Report drew on evidence from a terms of t rade index based on 1950, a peak year f o r LDC export p r i c e s , and ending i n 1961, a year of d e p r e s s i o n . For the purposes of t h i s s t u d y , however, we are l e s s concerned w i t h the m e r i t s and shortcomings of the P r e b i s c h t h e s i s on academic grounds than w i t h the p e r c e p t i o n of LDC's themselves o f t h e i r s i t u a t i o n . I t i s e v i d e n t tha t they are s u f f i c i e n t l y convinced of a need to change the e x i s t i n g t rade system and are p r e s s i n g f o r such changes. A s i m i l a r p o i n t made by I s a i a h Frank warrants q u o t i n g : The t r o u b l e w i t h the h i s t o r i c a l approach /Jin a n a l y s i n g export t rends of LDC's_7 i s t h a t i t i gnores the changes i n the i n t e r n a t i o n a l environment aga ins t which the present and p r o s p e c t i v e export s i t u a t i o n of deve lop ing c o u n t r i e s must be assessed. As long as the poorer c o u n t r i e s o f the w o r l d are determined to f o r c e the pace of development through conscious p o l i c i e s the r e l e v a n t q u e s t i o n i s not whether t h e i r t rade prospects are not as f avourab le as i n the past when such goals d i d not e x i s t . I t i s i n s t e a d , whether they are such as to l e n d support to or ac t as a c o n s t r a i n t on a c o u n t r y ' s own development e f f o r t s . 3 6 Manufactures t r a d e : As w i t h pr imary commodit ies , the R e p o r t . p o i n t s to two types of o b s t a c l e s to increa sed export s by LDC's - the s t r u c t u r a l and the imposed. The imposed ones are the b a r r i e r s set up by the developed c o u n t r i e s , w h i l e these b a r r i e r s have i n t u r n tended to c r e a t e the s t r u c t u r a l o b s t a c l e , which P r e b i s c h c a l l e d " i n w a r d - l o o k i n g i n d u s t r i a -l i z a t i o n . " By t h i s he meant i n d u s t r i a l i z a t i o n on the b a s i s o f p r o t e c t e d , h i g h - c o s t , import s u b s t i t u t i n g i n d u s t r i e s , which have l i t t l e i n c e n t i v e to compete i n i n t e r n a t i o n a l export market s , and w h i c h , because of the smal lness of home markets , remain h i g h l y i n e f f i c i e n t . - 26 -THE GATT: The Report makes i t s l a s t stop at the Genera l Agreement on Trade and T a r i f f s (GATT). The achievement o f the GATT are f i r s t l i s t e d . In the ma in , the o r g a n i z a t i o n has i n t r o d u c e d " a r u l e of law i n w o r l d t r a d e " , and has p rov ided the machinery f o r compla int and c o n s u l t a t i o n . I t has a l s o p rov ided an i n t e r n a t i o n a l forum to d i s c u s s a wide range of t rade mat te r s . However, P r e b i s c h contends , the o r g a n i z a t i o n l a c k s the dynamism needed to meet the needs o f the L D C ' s . In p a r t i c u l a r , GATT's espousa l of the " f r e e p l a y of i n t e r n a t i o n a l economic f o r c e s " i s not a p p r o p r i a t e to t rade r e l a t i o n s of c o u n t r i e s a t v a s t l y d i f f e r e n t l e v e l s of economic development. By t h i s P r e b i s c h meant tha t GATT's t a r i f f r e d u c t i o n p o l i c y on " t h e most favoured n a t i o n " b a s i s was i n a p p r o p r i a t e f o r LDC's who were economica l ly on a much lower f o o t i n g than the developed c o u n t r i e s . The p r i n c i p l e r e q u i r e s tha t a country reduces i t s t a r i f f s on o ther c o u n t r i e s to the l e v e l of tha t country which i s "most f a v o u r e d " , i . e . , the country on w h i c h . t h e lowest t a r i f f i s imposed. The more s p e c i f i c c o n t e n t i o n s w i t h re spect to GATT were: 1) the GATT system of r e c i p r o c a l b a r g a i n i n g has been used m a i n l y to reduce b a r r i e r s to expor t s o f i n t e r e s t to developed c o u n t r i e s ; 2) the apparent symmetry o f n o n - d i s c r i m i n a t i n g and r e c i p r o c a l t rade p o l i c i e s does not correspond w i t h the a c t u a l asymmetry of the w o r l d economy, i n which the LDC's tend to run p e r s i s t e n t d e f i c i t s and t h e r e f o r e have a g rea te r need f o r p r o t e c t i o n than developed c o u n t r i e s ; 3) the GATT r u l e s have i n h i b i t e d the format ion of r e g i o n a l economic groupings among L D C ' s , to make import s u b s t i t u -t i o n more e f f i c i e n t and to p rov ide a sound base f o r e x p o r t s . - 27 -P r e b i s c h ' s a s s e r t i o n s have a l s o been cha l l enged i n regard to GATT, e s p e c i a l l y w i t h re spec t to the r i g i d i t y of the o r g a n i z a t i o n i n coping w i t h the needs of L D C ' s . As a matter of f a c t , s i n c e 1964, "non-37 r e c i p r o c i t y " has been in t roduced under P a r t IV of the GATT. P r e b i s c h i s on f i r m e r ground i n a s s e r t i n g that the balance o f advantage i n the o r g a n i z a t i o n has r e s t e d w i t h the developed c o u n t r i e s . I t would be d i f f i c u l t to p r o v e , however, tha t GATT r u l e s have a c t u a l l y i n h i b i t e d r e g i o n a l i n t e g r a t i o n . B u t , a g a i n , as w i t h o ther compla int s about the e x i s t i n g t rade system, the r e l e v a n t q u e s t i o n i s the p e r c e p t i o n of the b u l k of L D C ' s , and, i n g e n e r a l , the o v e r r i d i n g v iew seems to be that GATT i s some k i n d of " a r i c h c o u n t r i e s ' c l u b " . That i s why LDC's a g i t a t e d f o r the fo rmat ion of UNCTAD. Remedies: The P r e b i s c h Report cont inues i n P a r t Two to suggest remedies to f i l l the p r o j e c t e d $20 b i l l i o n t rade gap. They are summarised be low, and may be taken to represent the North-South t rade i s s u e s i n o p e r a t i o n a l terms: 1) D i r e c t a c t i o n to r a i s e commodity p r i c e s by extending domestic p r i c e supports i n developed c o u n t r i e s to cover imports from LDC's and by i n t e r n a t i o n a l commodity agreements to m a i n t a i n h i g h and s t a b l e p r i c e s ; 2) "Compensatory f i n a n c e " to meet any r e s i d u a l d e t e r i o r a t i o n i n terms of t rade of L D C ' s , over and above r e g u l a r a i d t r a n s f e r s ; - 28 -3) T a r i f f pre ferences to manufactured goods imported from a l l L D C ' s ; 4) P r e f e r e n t i a l groupings among LDC's to encourage r e g i o n a l i n d u s t r i a l i z a t i o n ; 5) A permanent i n t e r n a t i o n a l t rade o r g a n i z a t i o n e s t a b l i s h e d under the UN to d e a l w i t h the problems of t rade and deve lop-ment on a l l f r o n t s and to c o - o r d i n a t e the work of r e l a t e d b o d i e s ; 6) A c t i o n to reduce the burden on LDC d e b t - s e r v i c i n g , by " s o f t e n i n g " the terms of a i d and export c r e d i t s ; 7) I n v e s t i g a t i o n i n t o the f e a s i b i l i t y o f r educ ing f r e i g h t charges on LDC's i n s h i p p i n g and i n s u r a n c e ; 8) Increased t rade between LDC's and the c e n t r a l l y planned c o u n t r i e s . As can be seen, these p o l i c y recommendations r e f l e c t by and l a r g e the ques t ions r a i s e d by the o r i g i n a l Group of 75. Commodity p r i c e s : Let us l o o k at t h i s i s s u e i n g rea te r d e t a i l s i n c e we w i l l be examining North-South b a r g a i n i n g r e l a t i o n s h i p s i n t h i s area i n the next s e c t i o n o f t h i s s tudy . The u s u a l method by which p r i c e s t a b i l i z a t i o n i s c a r r i e d out i s through the es tab l i shment of i n t e r n a t i o n a l Commodity Agreements ( I C A ' s ) , aimed at e l i m i n a t i n g s h o r t -term f l u c t u a t i o n s i n p r i c e w i t h o u t i n t e r f e r i n g w i t h long- te rm market t r e n d s . The P r e b i s c h Report had c a l l e d f o r a broadening of such agree-ments bo th i n the sense o f b r i n g i n g more commodities under such accords and a l s o i n the sense o f u s i n g such accords to o f f s e t the d e t e r i o r a t i o n i n LDCs' terms o f t r a d e . In g e n e r a l , t h e n , I C A ' s are aimed s i n g l y , or - 29 -i n combina t ion , a t : 1) r a i s i n g (or p r e v e n t i n g d e c l i n e s i n ) p r i c e s , thereby i n c r e a s i n g producer s ' e a r n i n g s , o r , where b e n e f i t s are t a x e d , i n c r e a s i n g the f o r e i g n exchange o f governments; 2) d i m i n i s h i n g f l u c t u a t i o n s i n p r i c e s and e a r n i n g s ; and 3) g e n e r a l l y o f l e s s importance , guaranteeing market access f o r s p e c i f i e d q u a n t i t i e s , as a method of c o u n t e r a c t i n g . . . . . . 38 p r o t e c t i o n i s m m i m p o r t i n g c o u n t r i e s . The t i n agreements have , i n a d d i t i o n , the o b j e c t i v e s of p r e v e n t i n g t i n shortages and unemployment i n the t i n i n d u s t r y . (See Appendix A , A r t i c l e 1 ) . The main f u n c t i o n of commodity a c c o r d s , however, r e l a t e to p r i c e c o n t r o l . I t i s g e n e r a l l y recogn ized that p r i c e - f i x i n g should be c a r r i e d out on a commodity-by-commodity b a s i s a l though there has been a sugges t ion tha t the c r e a t i o n of a "commodity re serve c u r r e n c y " , c o n t r o l l e d by an 39 i n t e r n a t i o n a l a u t h o r i t y o p e r a t i n g b u f f e r s t o c k s , i s f e a s i b l e . UNCTAD, however, has i t s e l f endorsed the commodity-by-commodity approach. As one o f the Conference r e s o l u t i o n s s t a t e s : I n t e r n a t i o n a l commodity agreements should be u s u a l l y on a commodity-by-commodity b a s i s , and, as f a r as each commodity i s concerned, should take due account of the i n t e r e s t s of e x p o r t i n g and i m p o r t i n g c o u n t r i e s , o f the c h a r a c t e r i s t i c s o f the product concerned and of the t rade i n and market arrangements f o r , that p r o d u c t : 4 ^ What cou ld be the e f f e c t f o r Southern c o u n t r i e s o f p r i c e - f i x i n g a r range-ments c a r r i e d out through IAC ' s ? P incus has e s t imated t h a t i f a p p l i e d to f i v e t r o p i c a l crops - c o f f e e , cocoa , t e a , bananas, and sugar - p r i c e -f i x i n g aimed p r i m a r i l y at r a i s i n g p r i c e s cou ld have i n c r e a s e d LDC - 30 -revenues by $600 m i l l i o n a n n u a l l y i n 1961, and by about $900 m i l l i o n a n n u a l l y i n 1970, as compared w i t h revenues obta ined under f r e e market 41 c o n d i t i o n s . Thus, p r i c e - f i x i n g through commodity accords can be of c o n s i d e r a b l e b e n e f i t to the South. How would p r i c e - f i x i n g a f f e c t the r e l e v a n t p a r t i e s ? I t has been po in ted o u t , f o r i n s t a n c e , tha t i t may not d i s t r i b u t e " the burden" e q u a l l y among i m p o r t e r s . C o n s i d e r , f o r example, t h a t o f the Southern export s of food and raw m a t e r i a l s to the Nor th i n 1962, l e s s than one-t h i r d o f the t o t a l went to the U . S . and Canada, which account (mainly 42 the U . S . , o f course) f o r o n e - h a l f of the Nor thern income. In o ther words , any genera l i n c r e a s e i n the p r i c e of Southern commodities would put a d i s p r o p o r t i o n a t e "burden" on Europe. A f t e r an e l a b o r a t e a s sess-ment of the r e l a t i v e cos t s of p r i c e - f i x i n g arrangements f o r Nor thern c o u n t r i e s , P incus conc ludes : . . . . i t seems l i k e l y tha t commodity agreements would prove to be a h i g h l y a r b i t r a r y form of t a x a t i o n . From the v iewpoint o f two major /aid_7 donors , the US and F r a n c e , i t o f f e r s the important advantage of r e d r e s s i n g the r e l a t i v e shares o f Nor thern c o s t s . In g e n e r a l , c o u n t r i e s that by e q u i t y standards are paying l e s s than t h e i r f a i r share of Nor thern f o r e i g n a i d c o u l d be paying h e a v i e r shares of the i n c r e m e n t a l cos t s of commodity agreements.^3 Desp i t e P i n c u s ' o b s e r v a t i o n , i t i s i n t e r e s t i n g to note t h a t the US has s tayed a l o o f from i n t e r n a t i o n a l t i n agreements. T h i s suggests tha t Nor thern c o u n t r i e s i n j o i n i n g commodity accords are l e s s l i k e l y to take i n t o c o n s i d e r a t i o n the o v e r a l l co s t s tha t I C A ' s i n genera l represent - 31 -than the p a r t i c u l a r co s t s and, indeed , ga ins (which P incus g los se s over) tha t i n d i v i d u a l I C A ' s represent f o r them. For the Southern c o u n t r i e s i t was a l r e a d y noted tha t they stand to g a i n from genera l Nor thern commitment toward I C A ' s , a l though i t i s aga in the s p e c i f i c Southern producing c o u n t r i e s o f those commodities f o r which commodity accords are e s t a b l i s h e d who are the immediate b e n e f i c i a r i e s . CHAPTER II NORTH-SOUTH CONFRONTATION IN TIN AGREEMENTS I Commodity accords are one method by which Southern countries hope to alter existing trade patterns in their favour, primarily through certain price stabilization mechanisms contained in such accords. This chapter begins a case study of North-South bargaining relationships in International Tin Agreements. It should be noted that the following investigation involves but one sub-issue-area of the whole range of North-South trade relationships,the broad issues of which were raised in Chapter I. More specifically, North-South interactions in t i n agreements take place in what may be called the multilateral issue-area-specific context. History and Issues of Tin Agreements International Tin Agreements have a relative long history. Prior to the f i r s t post-World War II Agreement of 1953, which may be considered the prototype of the subsequent agreements up t i l l the present, there had existed four intergovernmental tin control schemes, v i z . , 1) the First International Tin Control Scheme, 1931-33; 2) the Second International Control Scheme, 1934-36; 3) the Third International Tin Control Scheme, 1937-41; and 4) the Fourth International Control Scheme, 1942-46.1 In fact, actual attempts at controlling the trade in t i n pre-dated the above schemes in the form of a number of "buffer stock" arrangements, namely, the Bandoeng Pool of 1921-24, the Private Pool of 1931-34, - 32 -- 33 -the Producers' Stock of 1934, the Intergovernmental Buffer Stock of 1934-35, and the Buffer Stock Agreement of 1938-42, the last two being 2 adjuncts of the second and third control schemes. These early attempts at regulating the tin trade have been "credited" to the efforts of combines of tin producing companies, the better known being Anglo-Oriental Mining Corporation, Ltd., and Patino Mines and Enterprises Consolidated, the combination commonly called the "Anglo-Patino Group". This Group, through interlocking corporations, controlled the great bulk of t i n production in Malaya, Nigeria and Bolivia, and, to a lesser extent, Thailand and Burma. Another group, headed by B i l l i t o n Company, controlled 3 Indonesian production. Thus i t would seem that the early control schemes primarily served the interests of a cartel of t i n producing companies, though their interests were not necessarily exclusive of those of governments. To return to the history of these schemes, we find that producer groups in 1929 coalesced into a Tin Producers Association (TPA). which was mainly responsible for spearheading the buffer pool restriction arrangements, and which, in 1931, succeeded in persuading governments in formalising 4 these schemes into the First International Tin Agreement. It would seem that the interests of t i n companies and producing governments converged at this point. Producing governments, like the companies, have a stake in keeping t i n prices high. The Agreement was largely successful in achieving this objective but i t provoked considerable consumer resentment. - 34 -The second Agreement was e s s e n t i a l l y s i m i l a r to the f i r s t , except a b u f f e r s tock was i n t r o d u c e d as an a d d i t i o n a l instrument of c o n t r o l , where the f i r s t employed o n l y export c o n t r o l . (A b u f f e r s tock o p e r a t i o n i n v o l v e s the buying and s e l l i n g of t i n from a p o o l of t i n and/or c a s h , so as to b o l s t e r p r i c e s , w h i l e export c o n t r o l i n v o l v e s o n l y the r e s t r i c t i o n of t i n e x p o r t s . ) By the time o f the t h i r d scheme, consumer c o u n t r i e s , who were h i g h l y c r i t i c a l of the c o n t r o l schemes, were a l lowed to p a r t i c i -pate i n the conference as observers but w i t h no v o t i n g r i g h t s . In the war p e r i o d , a f o u r t h agreement was s igned i n 1942 but i t s i n f l u e n c e was s m a l l as i t was intended o n l y as a means o f c o n t i n u i n g the mechanism d u r i n g the war . A f t e r the war , a T i n Study Group was formed to p rov ide s t a t i s t i c a l s e r v i c e s and to draw up a d r a f t agreement i n accordance w i t h c e r t a i n proposa l s conta ined i n a d r a f t c h a r t e r f o r an I n t e r n a t i o n a l Trade O r g a n i z a t i o n . Al though the ITO never came i n t o b e i n g , the Havana Char te r was proc la imed i n 1948 and i n c l u d e d those proposa l s f o r commodity agree-ments. In essence, the Havana Char te r p r i n c i p l e s on which the T i n Study Group based i t s r e p o r t p rov ided f o r the equal p a r t i c i p a t i o n o f p roduc ing and consuming c o u n t r i e s i n commodity agreements. I n accordance w i t h t h i s , a new t i n agreement was n e g o t i a t e d i n 1953 and f i n a l l y came i n t o f o r c e i n J u l y 1956. I t should be ev ident from t h i s b r i e f h i s t o r i c a l account t h a t the pre-war t i n accords r e s u l t e d i n a c l a s h of i n t e r e s t s between consumers qua consumers and producers qua producer s , w i t h the consumers l a r g e l y as " t h e aggr ieved p a r t y " . Through i n t e r n a t i o n a l p r e s s u r e , which perhaps - 35 -reached a peak w i t h the convening of the Havana conference , consumer i n t e r e s t s began to be recogni sed and were f i n a l l y f o r m a l i s e d i n the 1953 Agreement. N o t w i t h s t a n d i n g t h i s , major consuming c o u n t r i e s l i k e the U n i t e d S ta tes and West Germany have yet to be p a r t i e s to t i n agreements. The U . S . p a r t i c i p a t e d i n the 1965 and 1970 t i n conferences but to date has not s igned the l a t e s t agreement. The same i s t rue f o r West Germany. R u s s i a , another major consumer, took p a r t i n the 1970 conference and acceded to the agreement i n February 1971, r a i s i n g expec ta t ions tha t the U . S . may f o l l o w s u i t . " * The U . S . has been a b l e to s t ay a l o o f from the agreements d e s p i t e i t s heavy consumption of t i n because i t has accumulated a huge s t o c k p i l e , which aggravates the problem of her n o n - p a r t i c i p a t i o n from the v i e w p o i n t of the producer s . However, i t i s assumed tha t as l o n g as the U . S . m a i n t a i n s a "benevolent n e u t r a l i t y " toward the agreements, they would remain l a r g e l y e f f e c t i v e . I t was not u n t i l the second post-war agreement (1960) tha t a North-South o r i e n t a t i o n of i n t e r e s t s became ev ident i n t i n agreements. B a s i c a l l y , t h i s new c l a s h of i n t e r e s t s sp r ing s from growing Southern awareness o f t h e i r dependence on pr imary commodity t r a d e , an awareness t h a t has been f u r t h e r a t tenuated by the convening o f UNCTAD. O s t e n s i b l y , the p o l a r i z a t i o n of i n t e r e s t s remains one of produc ing c o u n t r i e s ver sus consuming c o u n t r i e s , but where the prewar s i t u a t i o n was c h a r a c t e r i s e d by the consumers making demands on the producer s , the post-war s i t u a t i o n saw the producing c o u n t r i e s c o n f r o n t i n g the consuming c o u n t r i e s w i t h what they cons idered to be c e r t a i n i n e q u i t i e s i n the terms and o p e r a t i o n s of - 36 -tin agreements. In the pre-war situation,some of the producing countries such as Malaya, Nigeria and Indonesia, were represented by their metropo-l i t a n governments, Britain and the Netherlands, who therefore played a dual role as producers and consumers. By contrast, the post-war situa-tion was marked by a sharp s p l i t between producers, which were Southern countries, now f u l l y independent nations, and consumers, which were Northern industrial countries, including the former colonial "producer" governments. This new clash of interests in tin agreements i s evident from the statements by producing countries' delegations to t i n conferences. For example,at the 1960 Conference, the Thai delegate complained that contributions to the buffer stock placed a heavy burden on producers and asked i f that was ju s t i f i a b l e , considering that producing countries were neither very large nor rich.'' Also, at the same conference, both the Malayan and Bolivian delegates referred to the agreement as an important instrument to stabilize the economies of primary-producing countries, the Bolivian further pointing out his country's heavy dependence on the g export of t i n and hence the need for an effective agreement. By the time of the 1965 Conference, which came on the heels of UNCTAD I, some of the UNCTAD resolutions on commodity agreements found their way into the preamble and objectives of the draft agreement and the fi n a l version which emerged from the negotiations. For example, the preamble of the 1965 Agreement recognized that "commodity agreements by helping to secure short-term stabilization of prices and steady long-term development of - 37 -pr imary commodity market s , can s i g n i f i c a n t l y a s s i s t economic growth , e s p e c i a l l y i n deve lop ing produc ing c o u n t r i e s . " More s p e c i f i c a l l y , two new o b j e c t i v e s p e r t a i n i n g to Southern c o u n t r i e s were added to the agreement. They were: to make arrangements which w i l l he lp m a i n t a i n and i n c r e a s e the export earnings from t i n , e s p e c i a l l y those o f the deve lop ing producing c o u n t r i e s w i t h resources f o r a c c e l e -r a t e d economic growth and s o c i a l development, w h i l e a t the same t ime t a k i n g i n t o account the i n t e r e s t s of consumers i n i m p o r t i n g c o u n t r i e s and, to ensure c o n d i t i o n s which w i l l he lp achieve a dynamic and r i s i n g r a t e o f p r o d u c t i o n of t i n on the b a s i s of a remunera-t i v e r e t u r n to p roducer s , which w i l l he lp secure an adequate supply at p r i c e s f a i r to consumers and which w i l l he lp p r o v i d e a long- term e q u i l i b r i u m between p r o d u c t i o n and consumption.^ Statements by d e l e g a t i o n s of produc ing c o u n t r i e s a l s o tended to echo the gr ievances u t t e r e d at UNCTAD I , w i t h Southern c o u n t r i e s t a k i n g on somewhat more aggres s ive and b o l d e r p o s i t i o n v i s - a - v i s t h e i r Nor thern c o u n t e r p a r t s . For i n s t a n c e , the N i g e r i a n de legate took the o p p o r t u n i t y to ch ide those c o u n t r i e s who would not p a r t i c i p a t e i n t i n agreements i n the f o l l o w i n g terms : They have o f t e n professed t h e i r b e l i e f i n the o b j e c t i v e s of the Agreements, i n i n t e r n a t i o n a l t r ade and i n a reasonably ordered w o r l d . Should they not a l s o b e l i e v e i n an o r d e r l y promotion of i n t e r n a t i o n a l trade? Can they not persuade t h e i r i n d u s t r i a l l e a d e r s of the use fu lnes s o f a mechanism which made p o s s i b l e freedom of e n t e r p r i s e w i t h o u t the u n p r e d i c t a b l e and v i o l e n t f l u c t u a t i o n s of the t i n market p r i o r to the agreements? Are there any t i n users who do not care about the d i s a s t r o u s e f f e c t s tha t l a c k of a commodity agreement f o r t i n can have on the peoples of the deve lop ing producer c o u n t r i e s ? ! 0 - 38 -The growing schism between Nor th and South i n t i n agreements was p a r t i -c u l a r l y ev ident from the words o f the M a l a y s i a n d e l e g a t e , who showed b i t t e r d i s a t i s f a c t i o n w i t h the outcome o f . t h e conference . He c la imed that h i s d e l e g a t i o n had attempted to g i v e the conference "a new o r i e n t a t i o n and new o b j e c t i v e s " but had f a i l e d . H i s main compla int was t h a t a h i g h e r f l o o r p r i c e should have been e s t a b l i s h e d , and he f u r t h e r s t a ted tha t the b u f f e r s tock arrangement, w i t h the c o n t r i b u t i o n s coming e n t i r e l y from producing c o u n t r i e s , hur t none but the producer . The p r i n c i p l e seemed to be , "To him t h a t h a t h , more s h a l l be g i v e n ; f o r him who g i v e t h , more s h a l l be taken away." F i n a l l y , he commented tha t producers could not he lp t h i n k i n g t h a t i n the end the consumers had proved to be the b e t t e r n e g o t i a t o r s , a ccord ing to the c l a s s i c d e f i n i t i o n of s u c c e s s f u l n e g o t i a t i o n , " g i v i n g the o ther f e l l o w e v e r y t h i n g he wants wi thout g i v i n g him anyth ing you do not 11 want to p a r t w i t h . " In f a c t , the M a l a y s i a n Government i n December announced i t s d e c i s i o n not to s i g n the agreement and t h e r e f o r e c r i p p l i n g i t i n v iew of M a l a y s i a ' s l a r g e number of producer v o t e s . (Ma lays i a i s the l e a d i n g expor te r of t i n . ) However, an ITC team was sent to Kua la Lumpur to persuade M a l a y s i a to 12 r e t u r n to the f o l d , which i t d i d . Th i s summary account of the background and i s sues o f i n t e r n a t i o n a l t i n agreements b r i n g s to date the c u r r e n t c o n s t e l l a t i o n of i n t e r e s t s w i t h re spec t to t i n agreements. I n c o n t i n u i n g the i n v e s t i g a t i o n of Nor th-South b a r g a i n i n g r e l a t i o n s h i p s i n t i n agreements, I propose to proceed as f o l l o w s : - 39 -Ca) Assess the magnitude of the relative Southern and Northern stakes in t i n trade and hence in tin agreements, and (b) Identify and assess the objectives of t i n agreements in terms of (i) the extent to which these objectives reflect Southern and Northern interests and ( i i ) the efficacy of t i n agreements in carrying out these objectives. The Relative North-South Stakes in Tin Trade The trade in t i n between Southern and Northern countries corres-ponds in general to the overall North-South trade patterns and also in terms of the stakes that North and South have in such trade, as analysed in Chapter I. In categorising goods traded between Northern and Southern countries, t i n is a "non-competing" commodity. In fact, Southern countries produce nearly a l l the t i n concentrates of the world. The producer participants in the current t i n agreement (1970) accounted in 1969 for 91.5 per cent of total production. (See Table IV). On the import side, consumers of concentrates and unwrought t i n are nearly a l l industrial countries, the participants in the current agreement accounting for some 60 per cent of industrial consumption in 1969 (see Table V). Thus, t i n trade follows the classic pattern of North-South primary commodity trade, where producers are almost entirely Southern countries 13 and consumers almost a l l Northern countries. As noted, the general pattern of North-South stakes in primary commodity trade holds for t i n as well. Of a l l the Southern producing countries, Bolivia i s most dependent on t i n , which accounts for more than - 40 -TABLE IV PRODUCTION OF TIN CONCENTRATES, 1969 M e t r i c tons Percentage A u s t r a l i a 8,128 4 .5 B o l i v i a 30,047 16.7 Congo, D. R. 6,639 3.7 Indones ia 16,542 9.2 M a l a y s i a 73,325 40.8 N i g e r i a 8,741 4 .9 T h a i l a n d 21,092 11.7 S u b t o t a l 164,514 91.5 Others 15,086 8.5 W o r l d 1 179,600 100.0 E x c l u d i n g Mainland C h i n a , German Democrat ic R e p u b l i c , Democratic R e p u b l i c of Vietnam and U . S . S . R . Source : Compiled from UN S t a t i s t i c a l Yearbook 1970, New Y o r k , 1971. - 41 -TABLE V INDUSTRIAL CONSUMPTION OF T I N , 1969 M e t r i c tons Percentage A u s t r a l i a 3,820 2. 00 A u s t r i a 600 0. 31 Belgium-Luxembourg 3,033 1. 59 B u l g a r i a 254 0. 13 Canada 4,508 2. 36 China (Taiwan) 280 0 . 15 Czechos lovak ia 3,250 1. 70 Denmark 724 0. 38 France 11,280 5 . 91 Germany, Fed. Rep. 13,430 7. 03 Hungary 1,220 0. 64 I n d i a 4,470 2. 34 I t a l y 6,800 3. 56 Japan 25,880 13. 55 Mexico 1,630 0. 85 Nether lands 4,910 2 . 57 P h i l i p p i n e s 630 0 . 33 Poland 3,960 - 2 . 07 Rep. of Korea 284 0. 15 Spain 1,699 0. 89 Turkey 910 0 . 48 U . K . 18,062 9. 46 U . S . A . 58,336 30. 55 U . S . S . R . 6 , 600 2 3. 46 Y u g o s l a v i a 1,460 0. 76 S u b t o t a l 178,030 93. 22 Others 12,924 6. 78 W o r l d 3 190,954 100. 00 Data r e f e r to consumption by manufactur ing i n d u s t r i e s ; they do not n e c e s s a r i l y represent the f i n a l domestic consumption of t i n . 2 F i g u r e obta ined from UN T i n Conference , Summary of P r o c e e d i n g s , TP/TIN. 4 / 7 / R e v . l , New Y o r k , 1970, p . 24. (Refers o n l y to i m p o r t s . ) 3 E x c l u d i n g Mainland C h i n a , Democrat ic R e p u b l i c of Vie tnam, German Democratic Repub l i c and Romania. Source: Compiled from UN S t a t i s t i c a l Yearbook, 1970. - 42 -o n e - h a l f of the v a l u e of i t s t o t a l e x p o r t s . In one y e a r , 1965, t i n 14 c o n s t i t u t e d a huge 70 per cent of B o l i v i a ' s e x p o r t s . For M a l a y s i a , t i n i s the second most important f o r e i g n exchange earner (next to r u b b e r ) . The meta l accounts f o r 22.5 per cent of the t o t a l va lue o f i t s e x p o r t s . As f o r the o ther Southern producer s , the f i g u r e ranges from 9 per cent f o r T h a i l a n d to 4.7 per cent f o r the Democratic R e p u b l i c of Congo (see Table V I ) . These f i g u r e s mere ly underscore the p o i n t made i n Chapter I on the heavy dependence of Southern c o u n t r i e s on a few pr imary products f o r t h e i r export e a r n i n g s . I t i s ev ident tha t t i n i s one o f the important pr imary products i n which such dependence i s p a r t i c u l a r l y a c u t e , e s p e c i a l l y f o r B o l i v i a and M a l a y s i a . In s h o r t , the Southern producing c o u n t r i e s ' s take i n t i n t r a d e , and hence i n t i n agreements, i s not o n l y one o f great magnitude b u t , perhaps i n the case of B o l i v i a , a matter of economic s u r v i v a l . Thus e c o n o m i c a l l y , Southern producing c o u n t r i e s , e s p e c i a l l y B o l i v i a and M a l a y s i a , are h i g h l y v u l n e r a b l e to the v i c i s s i t u d e s o f the t i n market . In one sense, t h e n , they are i n a weak b a r g a i n i n g p o s i t i o n because t h e i r heavy s take i n t i n t rade would make them go the e x t r a d i s t a n c e to o b t a i n perhaps a l e s s o p t i m a l outcome. On the o ther hand, depending on how c r u c i a l or v a l u a b l e t h e i r good i s to the o ther p a r t y , they are i n a s t rong p o s i t i o n because they have almost a monopoly of the good. But more o f b a r g a i n i n g i n Chapter I I I ; f o r the moment l e t us examine the magnitude of the Nor thern s take i n t i n t r a d e . As f i g u r e s go, the Nor thern s take seems to be i n c r e d i b l y s m a l l . - 43 -TABLE V I TIN AS A PERCENTAGE OF TOTAL EXPORTS BY VALUE, 1968 Percentage B o l i v i a 54.25 M a l a y s i a 22.55 T h a i l a n d 9.01 N i g e r i a 6.69 Congo, D. R. 4.71 Indones ia 7.71 A u s t r a l i a 2.10 E x c l u d i n g t i n bars and i n g o t s . ( F i g u r e s not a v a i l a b l e . ) Source : Compiled from UN Yearbook of I n t e r n a t i o n a l Trade  S t a t i s t i c s 1968, New Y o r k , 1970 - 44 -For example, f o r the l a r g e s t t i n consumer, the U . S . , t i n as a percentage of t o t a l imports by va lue c o n s t i t u t e a mere 0.57 per c e n t , or s l i g h t l y more than o n e - h a l f o f one per cent of t o t a l imports by v a l u e . For Japan, the next most important consumer, the f i g u r e i s 0.51 per c e n t ; f o r the U n i t e d Kingdom, t h i r d i n importance , i t i s a l s o 0.51 per c e n t ; West Germany, 0.19 per c e n t ; France , 0.23 per cent (see Table V I I ) . For these top consuming c o u n t r i e s , t h e i r share of i n d u s t r i a l t i n consumption i n 1969 was 30.5 per c e n t , 13.5 per c e n t , 9.4 per c e n t , 7 per c e n t , and 5 .9 per cent r e s p e c t i v e l y , i n aggregate account ing f o r 66.5 per cent o f the t o t a l i n d u s t r i a l consumption (see Table V ) . I t a l y and USSR are next i n importance consuming about 3.5 per cent each, w i t h t i n c o n s t i t u t i n g a t i n y 0.2 per cent of t o t a l i m p o r t s . S u r p r i s i n g l y , I n d i a , a Southern c o u n t r y , has the h i g h e s t percentage of t i n imports - 1.2 per cent - which i s more than twice the f i g u r e f o r the top consumers. However, on the consumption s c a l e , she ranks o n l y n i n t h . These f i g u r e s would seem to p o i n t to one f a c t : the Nor thern s take i n t i n t rade i s v e r y s m a l l . But i n f a c t the statement may be m i s l e a d i n g because o f two c o n s i d e r a t i o n s . F i r s t , t h e nature of t i n i s such t h a t i t i s not used i n l a r g e q u a n t i t i e s i n i n d u s -t r i a l p r o d u c t i o n , i . e . , f i n i s h e d t i n products c o n t a i n o n l y a s m a l l percentage of pure t i n . For example, the u b i q u i t o u s t i n can (made from t i n p l a t e ) c o n t a i n s o n l y about 1 per cent pure t i n , 99 per cent be ing s t e e l . T h i s e x p l a i n s why consuming c o u n t r i e s do not import t h a t much t i n . Second, a l t h o u g h t i n i s used i n o n l y s m a l l q u a n t i t i e s , i t i s of s t r a t e g i c s i g n i f i c a n c e , l e a d i n g to a few c o u n t r i e s h o l d i n g non-commercial s t o c k p i l e s . - 45 -TABLE V I I T I N 1 AS A PERCENTAGE OF. TOTAL:IMPORTS BY VALUE, 1968 Percentage A u s t r a l i a 0.15 A u s t r i a 0.07 Belgium-Luxembourg 0.26 B u l g a r i a n . a . Canada 0.12 China (Taiwan) 0.11 Czechos lovak ia 0.26 (1967) Denmark 0.09 France 0.23 Germany, Fed. Rep. 0.19 Hungary n . a . I n d i a 1.23 I t a l y 0.21 Japan 0.51 Mexico 0.08 Nether lands 0.38 P h i l i p p i n e s 0.18 Poland 0.34 Rep. of Korea n . a . Spain 0.91 Turkey 0.91 U . K . 0.51 U . S . A . 0 . 5 7 2 U . S . S . R . 0.23 Y u g o s l a v i a 0.25 Inc ludes ores and concentra te s and t i n and a l l o y s (unwrought) . 2 Excludes s p e c i e , o r e s , c o n c e n t r a t e s , p r e c i p i t a t e s , b l i s t e r and s c r a p . Source: Compiled from UN Yearbook of I n t e r n a t i o n a l Trade S t a t i s t i c s  1968, New Y o r k , 1970. - 46 -The United States General Services Administration (GSA) stockpile i s the prime example. In the light of the above two considerations, tin imports as a percentage, of total imports may be a poor indicator of the magnitude of the Northern stake in t i n trade. Clearly, t i n is important to the North because i t is a non-competing product, i.e., i t is not produced to any large extent in the North. It would appear, then, that the Northern stake in t i n trade is somewhat d i f f i c u l t to assess, unlike the Southern stake which was clear-cut. Notwithstanding this, i t is evident that the Northern stake in the trade.of t i n is not as small as i t seems. Irrefutable evidence of this i s the strong consumer interest shown toward the tin control schemes in the pre-war period, their subsequent agitation for participation in t i n agreements, and their current participation. As for the relative stakes of North and South in tin trade, the assessment becomes even more problematic. Certainly t i n is of v i t a l importance to Southern producing countries and in the f i n a l analysis one must submit that i t is also more important for them than for the Northern consumers. But how much more important i t is to them than i t is to consumers w i l l perhaps depend ultimately on the extent to which the metal can be substituted in industrial production. A brief discussion of "substitutability" w i l l be in.order here. -The main use of t i n is i n the coating of steel into tinplate, from which our " t i n " cans are made. In fact, aluminium has for many years been tinplate's most important - 47 -compet i tor i n t h i s r e g a r d . I t has an advantage over t i n i n t h a t i t i s l i g h t e r but i t s u f f e r s from a s e r i o u s disadvantage because i t i s r e l a -t i v e l y weaker and has a lower r e s i s t a n c e to c o r r o s i o n than t i n . Other m a t e r i a l s tha t c o n s t i t u t e a t h r e a t to t i n p l a t e are p l a s t i c s , chromium, n i c k e l , l a c q u e r and p a p e r . ^ In the p e r i o d of acute t i n shortage and s o a r i n g p r i c e s i n the mid-1960s, i t was repor ted t h a t a number of s t e e l companies i n the U n i t e d States ( the l e a d i n g producer o f t i n p l a t e ) were under tak ing ex tens ive r e sea rch to f i n d ways of r educ ing or e l i m i n a t i n g the 16 use o f t i n . Other users of t i n were a l s o r e p o r t e d to have reduced or were a t tempt ing to reduce t i n usage, i n c l u d i n g makers of s o l d e r , automobile r a d i a t o r s , plumbing equipment and car b o d i e s . " ^ I n s p i t e o f e f f o r t s at s u b s t i t u t i o n , however, the demand f o r t i n remains h i g h as evidenced by the steady upward c l i m b of the t i n p r i c e over the y e a r s . I t does appear that t i n i s s t i l l a c r u c i a l meta l i n i n d u s t r i a l p r o d u c t i o n . Given t h i s c o n s i d e r a t i o n , t h e n , we may s t i l l p o s t u l a t e tha t N o r t h e r n consuming c o u n t r i e s have a reasonably s t rong s take i n the t r ade i n t i n . In o ther words , Southern producing . c o u n t r i e s s t i l l have a good b a r g a i n i n g p o s i t i o n v i s - a - v i s the Nor thern consuming c o u n t r i e s . The O b j e c t i v e s of T i n Agreements I n the four post-war t i n agreements a r r i v e d at from 1953 to 1970, the f o l l o w i n g s i x main o b j e c t i v e s can be i d e n t i f i e d : Ca) prevent p r i c e f l u c t u a t i o n s , (b) ensure adequate s u p p l y , - 48 -(c) a l l e v i a t e unemployment and/or under-employment, (d) promote economic p r o d u c t i o n o r prevent waste , (e) i n c r e a s e producer s ' export e a r n i n g s , and 18 (d) r ev iew d i s p o s a l o f non-commercial s t o c k s . The f i r s t f our o b j e c t i v e s have been p a r t of the t i n agreements s i n c e 1953, w h i l e the l a s t two were i n c l u d e d o n l y by the 1965 Agreement, f o l l o w i n g the convening o f UNCTAD, r e f l e c t i n g , as I have argued, a new o r i e n t a t i o n i n the c o n s t e l l a t i o n of i n t e r e s t s i n t i n accords . Most o f the o b j e c t i v e s tend to r e f l e c t both the i n t e r e s t s of produc ing and consuming c o u n t r i e s , a l though f o r our purposes here two of the s i x may be cons idered as e x c l u s i v e l y producer or consumer o b j e c t i v e s . O b j e c t i v e (b) to ensure adequate supply i s c l e a r l y a consumer o b j e c t i v e , w h i l e o b j e c t i v e (e) to i n c r e a s e export earnings i s almost e x c l u s i v e l y a producer o b j e c t i v e . As f o r the o t h e r s , we can rank them on a t h r e e - t i e r o r d i n a l s c a l e , a c c o r d i n g to t h e i r importance to producers and consumers (see Table X I ) . O b j e c t i v e (a) to prevent p r i c e f l u c t u a t i o n s tends to be o f s t ronger i n t e r e s t to producers than to consumers f o r the s imple reason tha t p r o -duc ing c o u n t r i e s i n d i v i d u a l l y export much more t i n than consuming c o u n t r i e s i n d i v i d u a l l y i m p o r t , i . e . , producers have more at s t ake . As such , p r i c e f l u c t u a t i o n s w i l l have g r e a t e r consequences f o r produc ing c o u n t r i e s than f o r consuming c o n t r i e s , e s p e c i a l l y i n terms o f the ga ins from t r a d e . Cons ider a l s o tha t p r i c e s d i r e c t l y a f f e c t the l e v e l of p r o d u c t i o n of t i n and those employed i n such p r o d u c t i o n . O b j e c t i v e (c) to a l l e v i a t e u n -employment i s a l s o of g r e a t e r i n t e r e s t to producers than to consumers, - 49 -but i t i s probably of a lower l e v e l of importance to both producers and consumers than the f i r s t o b j e c t i v e . O b j e c t i v e Cd) to promote economic p r o d u c t i o n i s a l i t t l e more d i f f i c u l t to p i n down: i t i s c e r t a i n l y o f d i r e c t importance to producers w h i l e at the same time i t r e f l e c t s a consumer f ea r of an uneconomic run-down of t i n s u p p l i e s . I t i s aga in of a lower magnitude of importance than o b j e c t i v e ( a ) . F i n a l l y , o b j e c t i v e ( f ) to rev iew d i s p o s a l of non-commercial s tocks i s o f pr imary i n t e r e s t to producers as such d i s p o s a l s have a d i r e c t e f f e c t on the p r i c e of t i n . For p roducer s , i t may be cons idered almost of the same magnitude of importance as p r e v e n t i n g p r i c e , f l u c t u a t i o n s , a l though the l a c k of U . S . p a r t i c i p a t i o n tends to reduce i t s importance i n t i n agreements. Thus on ba lance the o b j e c t i v e s of t i n agreements tend to r e f l e c t producer i n t e r e s t s more s t r o n g l y than consumer i n t e r e s t s . Two main reasons account f o r t h i s . F i r s t , the preponderance o f producer i n t e r e s t s i s p a r t l y a f u n c t i o n of the h i s t o r i c a l development of t i n c o n t r o l schemes, which s t a r t e d out as "producer c l u b s " . Second, the impact of UNCTAD f u r t h e r emphasised producer i n t e r e s t s i n commodity agreements, the e f f e c t of which was the i n c l u s i o n of the new o b j e c t i v e s (e) and ( f ) . However, to say tha t t i n agreements r e f l e c t more s t r o n g l y producer than consumer i n t e r e s t s i s not n e c e s s a r i l y say ing tha t produc ing c o u n t r i e s have s t r u c k a good b a r g a i n . On the c o n t r a r y , the preponderance o f producer i n t e r e s t s i n the o b j e c t i v e s of t i n agreements may be merely a r e c o g n i t i o n tha t producing c o u n t r i e s have a g r e a t e r s take i n t i n t r a d e . - 50 -The main i n t e r e s t of consuming c o u n t r i e s i n t i n agreements i s , w i t h o u t doubt , ensur ing o f adequate s u p p l i e s o f t i n f o r t h e i r i n d u s t r i e s , but the i n t e r e s t does not stop h e r e , o f cour se . More i m p o r t a n t l y , consumers would l i k e to o b t a i n adequate s u p p l i e s at " f a i r p r i c e s " , or low p r i c e s i f p o s s i b l e . No t i n agreement cou ld r e a l l y guarantee adequate s u p p l i e s , a n d . t h e r e f o r e some consuming c o u n t r i e s , l i k e the U . S . , go i t a l o n e , accumulat ing t h e i r own s t o c k p i l e s of t i n . However, consumers w i t h o u t s t o c k p i l e s have n o t h i n g to f a l l back on when p r i c e s race i n t o the upper l i m i t s , so they j o i n t i n agreements which c o u l d to a c e r t a i n extent ensure " f a i r p r i c e s " . But p r i c e s bes ides be ing " f a i r " have to be " r emunera t ive " to producing c o u n t r i e s i n t i n agreements. Indeed, t h i s i s where the r e a l b a r g a i n i s s t r u c k between consuming and produc ing c o u n t r i e s p a r t i c i p a t i n g i n t i n agreements. The manner by which commodity accords have overcome t h i s p o t e n t i a l zero-sum game where " f a i r " p r i c e s may not n e c e s s a r i l y be a l s o " r e m u n e r a t i v e " , i s by the method o f e s t a b l i s h i n g f l o o r and c e i l i n g p r i c e s f o r the commodity and thereby a l l o w i n g p r i c e s to f l u c t u a t e w i t h i n the agreed range. The f l o o r p r i c e repre sent s the lowest p r i c e the producers w i l l accept f o r t h e i r good and the c e i l i n g p r i c e the most consumers w i l l pay f o r i t . For purposes of o p e r a t i n g the b u f f e r s t o c k , which w i l l be e x p l a i n e d be low, the p r i c e range between f l o o r and c e i l i n g i s d i v i d e d i n t o three s e c t o r s -l o w e r , midd le and upper . In the next s e c t i o n we w i l l c o n s i d e r how e f f e c t i v e such opera t ions are i n c a r r y i n g out the o b j e c t i v e s o f t i n accords . - 51 -Effectiveness of Tin Agreements Clearly the main objective of t i n accords i s to prevent drastic fluctuations of price while at the same time ensuring an adequate supply of the commodity. This is pursued through two instruments of control: Ca) buffer stock operation and (b) export control. Tin accords tend to place the emphasis on buffer stock operation, using export control as a stand-by mechanism. Buffer Stock: Contributions amounting to 20,000 tons of tin (1965 and 1970) to the buffer stock are made by producing countries according to their percentages of t i n production, although voluntary contributions may also be made by other participating and even non-19 participating countries. One-half of the required contributions i s called up when an agreement comes into force payable either in cash or i t s metal equivalent. The Tin Council, the on-going body set up to operate an agreement, decides the dates and instalments for the other half of the contributions. (In the 1965 Agreement, the f i r s t half 20 was called up on July 1966 and the second half by 31 January, 1968.) A Buffer Stock Manager is responsible for the operation of the stock in relation to the agreed floor and ceiling prices and the range of sectors between these to limits. His responsibilities may be summarised as follows: If the market price of t i n 1) is equal to or greater than the ceiling price, the Manager shall, i f he has cash t i n at his disposal, offer such t i n for sale at the ceiling price u n t i l the market price - 52 -f a l l s below the c e i l i n g p r i c e or the cash t i n at h i s d i s p o s a l i s exhausted ; 2) i s i n the upper s e c t o r of the range , the Manager may s e l l cash t i n i f he c o n s i d e r s i t necessary to prevent the market p r i c e from r i s i n g too s t e e p l y ; 3) i s i n the middle s e c t o r , the Manager may buy and/or s e l l t i n o n l y on s p e c i a l a u t h o r i z a t i o n by the C o u n c i l ; 4) i s i n the lower s e c t o r , the Manager may buy cash t i n i f he c o n s i d e r s i t necessary to prevent the market p r i c e from f a l l i n g too s t e e p l y ; and 5) i s equal to or l e s s than the f l o o r p r i c e , the Manager s h a l l , i f he has funds at h i s d i s p o s a l , o f f e r to buy cash t i n at the f l o o r p r i c e u n t i l the market p r i c e of t i n i s above the 21 f l o o r p r i c e or the funds a t h i s d i s p o s a l are exhausted. In c e r t a i n c i rcumstances and n o t w i t h s t a n d i n g the above p r o v i s i o n s , the o p e r a t i o n s o f the b u f f e r s tock may be r e s t r i c t e d o r suspended i f the C o u n c i l so d e c i d e s . At the end of the agreement, the B u f f e r s tock i s l i q u i d a t e d , the s tock e v a l u a t e d , and each c o n t r i b u t i n g country r e c e i v e s 22 i t s a p p r o p r i a t e p o r t i o n . Expor t C o n t r o l : T h i s is the second main i n s t r u m e n t a l i t y of t i n agreements. I f and when neces sa ry , a c o n t r o l p e r i o d i s d e c l a r e d by the t i n C o u n c i l thereby f i x i n g a t o t a l of p e r m i s s i b l e export s of t i n f o r tha t p e r i o d , the c o n t r o l . p e r i o d i s a quar te r and the q u a r t e r l y export amounts are d i v i d e d among producing c o u n t r i e s i n p r o p o r t i o n to t h e i r percentages o f p r o d u c t i o n . P e n a l t i e s can be imposed f o r over-expor t by produc ing c o u n t r i e s d u r i n g a c o n t r o l p e r i o d , i n c l u d i n g the d e f a u l t i n g country be ing r e q u i r e d to make an a d d i t i o n a l c o n t r i b u t i o n to the b u f f e r - 53 -s t o c k , i t s p e r m i s s i b l e export s f o r subsequent per iods be reduced , or that i t f o r f e i t s a par t of i t s b u f f e r s tock c o n t r i b u t i o n s on l i q u i d a t i o n 23 of the s tock . There are two o ther r e s i d u a l " i n s t r u m e n t s " o f c o n t r o l . In the event of a s e r i o u s shortage o f . t i n , the C o u n c i l i s o b l i g e d to make the necessary es t imates o f requirements and a v a i l a b i l i t y of the commodity and then make recommendations to p a r t i c i p a n t s " t o i n i t i a t e such a c t i o n as w i l l ensure as soon as p o s s i b l e a r a p i d expansion i n the amount of t i n which they w i l l be ab le to make a v a i l a b l e " , and " i n v i t e them to enter i n t o such arrangements w i t h i t as may ensure consuming c o u n t r i e s an e q u i t a b l e 24 d i s t r i b u t i o n of the a v a i l a b l e s u p p l i e s o f t i n . T h i s p r o v i s i o n i s an attempt to b u t t r e s s the supply o b j e c t i v e but appears vague and o f f e r s no s p e c i f i c l i n e of a c t i o n . Second, there i s the p r o v i s i o n f o r the d i s p o s a l of non-commercial s tocks by p a r t i c i p a n t s , r e l a t e d to o b j e c t i v e ( f ) . When members w i s h to make such d i s p o s a l s they are to n o t i f y the C o u n c i l which w i l l d i s c u s s the p l a n and make recommendations. The d i s p o s a l s are to be made w i t h due regard to the p r o t e c t i o n o f producers and consumers and " t o the consequences of such d i s p o s a l s on the investment o f c a p i t a l i n e x p l o r a t i o n and development of new s u p p l i e s and the h e a l t h and growth 25 of t i n mining i n the produc ing c o u n t r i e s " . The P r i c e O b j e c t i v e : The I n t e r n a t i o n a l T i n Agreements up t i l l the middle o f 1970 had f a i l e d three t imes to r e s t r a i n p r i c e movements w i t h i n the b u f f e r s tock ranges . The f i r s t t ime was i n 1959 when the p r i c e f e l l through the f l o o r , the second i n 1963 when i t rose above the - 54 -TABLE V I I I PRICE RANGES IN THE TIN AGREEMENTS (London p r i c e f o r cash t i n ) ^ p e r long ton P e r i o d of Opera t ion F l o o r M i d d l e Range C e i l i n g 1 J u l y 1956 - 22 Mar. 1957 640 735-785 880 22 Mar. 1957 - 12 J an . 1962 730 780-830 880 12 J an . 1962 - 4 Dec. 1963 790 850-910 965 4 Dec. 1963 - 12 Nov. 1964 850 900-950 1000 12 Nov. 1964 - 6 J u l y 1966 1000 1050-1150 1200 • 6 J u l . 1966 - 20 Nov. 1967 1100 1200-1300 1400 20 Nov. 1967 - 16 J an . 1968 1283 1400-1516 1633 16 J an . 1968 - 2 J an . 1970 1280 1400-1515 1630 2 J an . 1970 - 1260 1380-1490 1605 (j[ per m e t r i c ton) Source: ITC S t a t i s t i c a l Yearbook 1968, p . 275 - 55 -TABLE IX BUFFER STOCK TIN METAL PURCHASES UNDER  THE 1965 TIN AGREEMENT (Long tons) 1966 I - 1968 I 3470 I I - I I 975 I I I - I I I 2090 IV 35 IV 1967 I 1475 1969 I I I - I I 2840 1 I I I 1930 I I I 8 0 5 1 IV 1315 1 N e t Sales Source : ITC S t a t i s t i c a l Yearbook 1968, p . 13 - 56 -c e i l i n g and then i n A p r i l 1970 when i t aga in broke through the c e i l i n g . A g lance at Table V I I I shows that p r i c e ranges have tended to p r o g r e s s i v e l y s h i f t upwards under the t i n agreements. The genera l upward p r i c e t r e n d over the years i s of course l a r g e l y the r e s u l t of u n d e r l y i n g market f o r c e s , and i t would be f o o l h a r d y to make any f u r t h e r c o n c l u s i o n s from i t wi thout more d e t a i l e d a n a l y s i s . However, under the 1965 Agreement, the p r i c e range was o s t e n s i b l y changed three t imes (up t i l l December 1969) , t w i c e w i t h upward r e v i s i o n s , as f o l l o w s : F l o o r M i d d l e Range C e i l i n g I n i t i a l : 1000 1050-1150 1200 J u l y 1966: 1100 1200-1300 1400 Nov. 1967: 1283 1400-1516 1633 Jan . 1968: 1280 1400-1515 1630' The upward s h i f t s cou ld mean tha t the b u f f e r s tock o p e r a t i o n and export c o n t r o l under the 1965 Agreement were not adequate ly e f f e c t i v e i n keeping p r i c e s down to the i n i t i a l p r i c e ranges , as was the 27 case f o r s i m i l a r upward s h i f t s under the 1960 Agreement (see Table V I I I ) . However, we know that f o r the g r e a t e r p a r t of the 1965 Agreement, 28 there tended to be an oversupply o f t i n , which would have tended to depress p r i c e s . Furthermore , the b u f f e r s tock o p e r a t i o n under t h i s Agreement c o n s i s t e d m a i n l y o f purchases (see Table I X ) , which meant tha t they were aimed at keeping the p r i c e a t l e a s t below the f l o o r . Moreover , to f u r t h e r b u t t r e s s the f l o o r p r i c e , export c o n t r o l was d e c l a r e d from from mid-September 1968 t i l l 31 December 1969. A l l t h i s means that the upward r e v i s i o n s of the pr ice range must have been d e f i n i t e p o l i c y d e c i s i o n s r a t h e r than an e f f o r t to cope w i t h market f o r c e s . One good i n d i c a t o r of t h i s i s tha t produc ing c o u n t r i e s had complained tha t the p r i c e range f i x e d at the 1965 n e g o t i a t i o n s were too low and t h a t M a l a y s i a and B o l i v i a had threatened not to accede to the Agreement. Lri f a c t , we know t h a t the f i r s t upward s h i f t i n J u l y 1966 was the d i r e c t r e s u l t o f the M a l a y s i a n - B o l i v i a n t h r e a t not to accede to the agreement. As f o r the genera l e f f e c t i v e n e s s of the 1965 Agreement i n p r e v e n t i n g p r i c e f l u c t u a t i o n s , i t appears that the b u f f e r s tock o p e r a t i o n i n the form of purchases were ab le to cope w i t h a downward pre s sure on p r i c e u n t i l the end of 1968 when export c o n t r o l was d e c l a r e d and kept i n e f f e c t u n t i l the end of 1969. As the t i n p r i c e d i d not c ra sh below the r e v i s e d f l o o r d u r i n g t h i s p e r i o d , we may conclude tha t both b u f f e r s tock o p e r a t i o n and export c o n t r o l were g e n e r a l l y e f f e c t i v e i n c o n t r o l l i n g f l u c t u a t i o n s w i t h i n the ranges e s t a b l i s h e d by the C o u n c i l . However, p r i c e s moved upwards i n 1970 and i n A p r i l shot above the c e i l i n g . The B u f f e r Stock Manager a t t r i b u t e d the f a i l u r e of the C o u n c i l to check t h i s l a r g e l y to the a c t i v i t y of s p e c u l a t o r s , combined w i t h a growing shortage of t i n i n the market , h i g h i n t e r e s t r a t e s p r e v a i l i n g then i n the wor ld and genera l i n f l a t i o n . I n g e n e r a l , i n a s se s s ing the e f f i c a c y of t i n agreements i n coping w i t h p r i c e f l u c t u a t i o n s , we may conclude that they have been c o n s i d e r a b l y e f f e c t i v e . There have been, a f t e r a l l , o n l y three f a i l u r e s to check p r i c e movements from b r e a k i n g out of the agreed p r i c e ranges i n - 58 -a period of 15 years (1956-1970). In our analysis of the 1965 Agreement, i t was shown that buffer stock operation and export control were able to maintain the floor price despite two upward revisions. The failure to protect the ceiling w i l l be discussed under the supply objective. The Supply Objective: Ensuring adequate supplies of tin is almost exclusively a consumer interest, but consumers, as noted earlier, are not interested only in having adequate supplies; they would like to ensure that such supplies are acquired at " f a i r prices". We w i l l assume for purposes of analysis that a f a i r price to consumers is one that f a l l s within the range of prices established by an agreement and the Tin Council from time to time, for consumers have an equal role in fixing such price ranges. As for the question of what constitutes adequate supplies, we w i l l have to use the price indicator. In other words, i f prices rise too sharply and too high, this would indicate that supply was short of demand. According to the Buffer Stock Manager, under the 1965 Agreement, there tended to be an over-supply in the market and he had to .purchase 11,290 31 tons of t i n . However, toward the end of the agreement period and by the second quarter of 1969, he began selling (see Table IX) but failed to prevent the price from breaking through the ceiling. Under the 1960 Agreement, the price of t i n also broke through the ceiling in 1963 32 indicating acute shortage in the metal. There were successive upward shifts in the price range in January 1962, December 1963 and November 1964 (see Table VIII) to bring the market price within the agreement range. Rogers argues that the problem was due in part to the small size of the - 59 -buffer stock. The Buffer Stock Manager was less Inclined to put the blame entirely on buffer stock size, pointing out that because of upward shifts in the floor price his buying power was reduced as the contributions were based on the i n i t i a l floor price. Furthermore, there was no metal contribution and this made i t d i f f i c u l t for him to protect the ceiling 34 as he had to convert the cash- at hand into metal to do so. He admitted, however, that i f participants of t i n agreements f e l t that the buffer stock should be the main instrument of control, then, to be effec-35 tive, i t has to be enlarged. Thus in assessing the effectiveness of tin agreements in carrying out the supply objective, we find two periods where t i n shortages were clearly evident and when " f a i r prices" could not be maintained by the instrumentalities of the agreements. As noted, tin agreements have really no way of guaranteeing adequate supplies of t i n ; they can only hope to prevent prices from soaring or dropping to unacceptable levels for consumers and producers. Therefore, given that in the length of 15 years for which t i n agreements were operative, there were only two periods when prices broke the ceiling, we may s t i l l conclude that the objective "adequate supply at f a i r prices" has been adequately achieved. Obviously, as the Buffer Stock Manager pointed out, there are some major shortcomings in the operational aspects of the agreements in coping with periods of acute tin shortage. Given these d i f f i c u l t i e s , one could hardly expect the agreements to have function any more effectively. - 60 -The Employment O b j e c t i v e : T h i s i s a nebulous o b j e c t i v e as n o t h i n g i n a c t u a l o p e r a t i v e aspects o f t i n agreements c o n t r i b u t e s p o s i -t i v e l y toward such an o b j e c t i v e . I n f a c t , as Lim Chong Yah and Y i p Yat 36 Hoong p o i n t o u t , the opera t ions of t i n agreements, e s p e c i a l l y export c o n t r o l tend to have a nega t ive e f f e c t on employment i n produc ing c o u n t r i e s . In M a l a y s i a , export r e s t r i c t i o n has been shown to cause the c l o s i n g down 37 of mines f o r c e r t a i n p e r i o d s , e s p e c i a l l y the s m a l l e r p r o d u c t i o n u n i t s . For example, i n the year 1958, under the F i r s t Agreement, 42 t i n dredges and 257 o ther t i n mines were abandoned, and 11,712 workers employed i n 38 the t i n i n d u s t r y were re t renched i n Malaya . I t may be argued tha t the employment o b j e c t i v e tends to be i n c o n t r a d i c t i o n to the p r i c e o b j e c t i v e , t h a t i s , to m a i n t a i n a h i g h p r i c e sometimes i n v o l v e s export c o n t r o l which may r e s u l t i n unemployment i n the t i n i n d u s t r y . I t should be n o t e d , however, tha t the o b j e c t i v e i s s t a t e d as " t o prevent widespread unemployment or under-employment," i . e . , the agreements do not r e a l l y envisage p o s i t i v e a c t i o n but o n l y hope to c u r t a i l whatever unemployment may r e s u l t from the o p e r a t i o n o f export c o n t r o l . Nonethe le s s , i n the f i n a l a n a l y s i s , t h i s o b j e c t i v e cannot be s a i d to have been e f f e c t i v e l y pursued v i a t i n agreements. The Economic P r o d u c t i o n O b j e c t i v e : L im Chong Yah suggests tha t t h i s o b j e c t i v e may be viewed from three a n g l e s : (a) the l o w e r i n g of average p r o d u c t i o n cos t s of i n d i v i d u a l mines , (b) the p r e v e n t i o n of premature abandonment of mines , and (c) the e l i m i n a t i o n of h i g h - c o s t . - 61 -mines . L i k e the prev ious o b j e c t i v e , t i n agreements have no r e a l p r o v i s i o n s f o r any o f the above measures. Indeed, these a c t i v i t i e s depend l a r g e l y on the d e c i s i o n s of i n d i v i d u a l producing c o u n t r i e s themselves . Furthermore , L im suggests tha t t h i s o b j e c t i v e may be i n c o n t r a d i c t i o n to 40 o ther o b j e c t i v e s . F i r s t , mines are o f t e n premature ly abandoned because of export c o n t r o l aimed at m a i n t a i n i n g the p r i c e range f i x e d by an agree-ment. Second, one of the f a v o u r i t e c l a i m s of produc ing c o u n t r i e s i n b a r g a i n i n g f o r a h i g h e r f l o o r p r i c e i s t h a t p r o d u c t i o n co s t s are h i g h and that m a r g i n a l mines would be c l o s e d i f the f l o o r p r i c e were not r a i s e d . 41 B o l i v i a has f r e q u e n t l y taken such a p o s i t i o n . In o ther words , some producing c o u n t r i e s are committed to m a i n t a i n i n g h i g h - c o s t mines i n the f i r s t p l ace i f o n l y because to c l o s e them would r e s u l t i n unemployment. So, the economic p r o d u c t i o n o b j e c t i v e i s a l s o i n c o n f l i c t w i t h the supply o b j e c t i v e because i n per iods o f acute shor tage , even the h i g h e s t - c o s t mines w i l l be brought i n t o o p e r a t i o n . There fore , l i k e the p rev ious o b j e c t i v e , the economic p r o d u c t i o n o b j e c t i v e cannot be s a i d to have been e f f e c t i v e l y pursued through t i n agreements. The Export Earn ings O b j e c t i y e : T h i s i s one of the o b j e c t i v e s which was i n c o r p o r a t e d i n t o t i n accords as a d i r e c t consequence o f UNCTAD. There i s no s p e c i f i c p r o v i s i o n i n the o p e r a t i o n a l f ea ture s of t i n agreements tha t p e r t a i n d i r e c t l y to t h i s o b j e c t i v e , a l though i t i s assumed t h a t p r i c e f i x i n g i s the i n s t r u m e n t a l i t y through which i t i s a t t a i n e d . - 62 -.TABLE X TIN 1 EXPORT EARNINGS OF PRODUCING COUNTRIES (jt million) 1960 1961 1962 1963 1964 1965 1966 1967 1968 Bolivia 17.1 18.0 20.5 21.9 28.9 33.2 33.4 32.7 38.8 Congo, Dem. Rep. 4.6 2.6 6.8 9.9 10.3 12.8 18.4 • • • • • • • • Indonesia • • • • • • • • 6.4 • • • • • • • • • • • • • • • • Malaysia 59.2 64.5 72.3 74.9 84.9 101.8 92.1 88.4 113.0 Nigeria • • • • 0.5 6.7 8.9 12.9 14.9 15.4 13.1 16.1 Thailand 9.3 10.7 11.9 12.9 16.7 20.5 22.7 31.4 30.1 Includes both t i n metal and concentrates. Source: ITC Stat i s t i c a l Yearbook 1968, p. 279. - 63 -Table X shows upward trends in the export earnings from t i n for most producing countries. Although one could not conclude from this that tin agreements have been eminently successful in helping the producing countries increase their export earnings, one could nevertheless point out that the agreements have not at any rate adversely affected the export earnings of these countries. One way of getting around the problem of assessing this objective is to consider how effective tin agreements have been in maintaining "remunerative" prices. This, we have done in analysing the price objective. We found that the buffer stock operations and export control have been considerably effective in maintaining the floor price (below which prices would not presumably be considered "remunerative" by producers). Only once, under the 1953 Agreement, did prices sink below the floor. Also, in reviewing price ranges, there has been a general tendency for upward shifts over the years. It may therefore be adduced that t i n agreements have been reasonably effective in pursuing the export earnings objective. Exactly how satisfactory the agreements have been to producing countries must f i n a l l y depend on what they expect. There was indication in the 1965 negotiations that producing countries were not satisfied with the price range fixed, when both Bolivia and Malaysia threatened non-accession. However, in the 1966 July meeting of the Council, the floor price was raised from /l,000 per ton to$:l,100 per ton and the ceiling from^l,200 to ^ 1,400. In fact, there was subsequently a further upward revision in November 1967 (see Table VIII). - 64 -The Stocks Disposal Objective: The Council has had considerable success in the disposal of non-commercial stocks for participants of t i n agreements. During 1959 and 1960, 4,900 tons of t i n metal were sold for the U.K., and in 1960, disposals began from the Italian stock of 2,500 tons, while the intention of disposal 3,000 tons of Canadian stocks was announced. In the last three years of the First Agreement, over 10,000 42 tons of t i n metal were sold by the Council from these sources. The absence of the U.S. from the agreements, however, remains the main problem in respect to such ; vposals. The GSA s continuing changes in the disposal programme have had a major unsettling influence on the market. Even after a decision in 1969 to take 32,000 tons of 43 metal from the disposable surplus, leaving 25,000 tons for sale, the GSA s t i l l has a greater holding than the ITC buffer stock. However, i f the U.S. accedes to the current agreement, the problem w i l l be eliminated. Thus, as a result of the lack of U.S. participation in tin agreements so far, the disposal of non-commercial stocks remains a problem. Table XI represents an attempt to summarise the foregoing discussion of the objectives of t i n agreements, the relative interest producing and consuming countries have in these objectives, and the effectiveness of t i n agreements in pursuing.these objectives. The six main objectives of t i n agreements (1953-70) are l i s t e d and the relative interest of producing and consuming countries in these objectives scored according to a simple three-tier ordinal scale of "very strong interest", - e s -t o . " l i t t l e or no i n t e r e s t " . In o ther words , the scores are merely an i n d i c a t i o n of how r e l a t i v e l y important these o b j e c t i v e s are to producers and consumers. The s i x o b j e c t i v e s are a l s o ra ted c r u d e l y on a low to h i g h s c a l e accord ing to how e f f e c t i v e l y they have been pursued i n t i n agreements. The e v a l u a t i o n should by no means be t r e a t e d as a p r e c i s e assessment s i n c e the evidence presented has been l e s s than comprehensive. I I THE STRUCTURE AND PROCESS OF TIN NEGOTIATIONS N e g o t i a t i o n has been de f ined by Fred I k l e as " a process o f which e x p l i c i t proposa l s are put forward o s t e n s i b l y f o r the purpose of r each ing agreement f o r an exchange or on the r e a l i z a t i o n o f a common 44 i n t e r e s t where c o n f l i c t i n g i n t e r e s t s are p r e s e n t . " I n t e r n a t i o n a l t i n n e g o t i a t i o n s and commodity accord n e g o t i a t i o n s i n genera l can be d e s c r i b e d i n such terms. However, I k l e ' s d e f i n i t i o n excludes t a c i t 45 b a r g a i n i n g because he sees n e g o t i a t i o n as a b a s i c a l l y "open" p r o c e s s . For my purposes I would i n c l u d e the n o t i o n . o f t a c i t b a r g a i n i n g i n the working d e f i n i t i o n o f n e g o t i a t i o n , as to exc lude i t would be to l eave out a major p a r t of the phenomenon of b a r g a i n i n g , namely, t h a t " p s y c h i c " aspect that coord ina te s e x p e c t a t i o n s , even when communication i s incom-46 p l e t e between b a r g a i n i n g p a r t i e s , as S c h e l l i n g puts i t . I t i s a l so u s e f u l to cons ider n e g o t i a t i o n , and t i n n e g o t i a t i o n s i n p a r t i c u l a r , as a s e q u e n t i a l a c t i v i t y , that i s , n e g o t i a t i o n i n v o l v e s process and i s not a s t a t i c a c t i v i t y . F o l l o w i n g Jack Sawyer and H a r o l d 47 Guetzkow, one can i d e n t i f y at l e a s t four steps or stages of n e g o t i a t i o n , namely, - 66 -TABLE XI OBJECTIVES, INTERESTS AND EFFECTIVENESS OF TIN AGREEMENTS Years Objectives Interest Effectiveness Producers Consumers Ca) 1953-70 (b) 1953-70 (c) 1953-70 (d) 1953-70 (e) 1965-70 (f) 1965-70 Prevent price Fluctuations Ensure adequate supply Alleviate unem-ployment Promote economic production Increase export earnings Review disposal of non-commercial stocks High Moderate-High Low Low Moderate-High High Key 1 - Very strong interest 2 - Strong interest 3 - L i t t l e or no interest - 67 -(a) p r e l i m i n a r y n e g o t i a t i o n concerning procedure and agenda, (b) f o r m u l a t i o n of a l t e r n a t i v e s and pre ferences of each p a r t y i n t o a j o i n t d e c i s i o n m a t r i x , (c) communication and per suas ion intended to a l t e r the o ther p a r t y ' s p e r c e p t i o n of the s i t u a t i o n , and (d) t h r e a t s and promises , f a i t accomplis and c r e a t i v e problem-s o l v i n g a c t i v i t y to narrow or widen the range of a v a i l a b l e outcomes and a l t e r n a t i v e s . For the a n a l y s i s of t i n n e g o t i a t i o n s I have decided to c o l l a p s e the process o f n e g o t i a t i o n i n t o two fundamental stages which I s h a l l c a l l (1) P r e p a r a t o r y N e g o t i a t i o n , i n v o l v i n g the Sawyer-Guetzkow steps (c) and ( d ) . Th i s study w i l l be concerned more w i t h o p e r a t i o n a l n e g o t i a t i o n than w i t h p repara to ry n e g o t i a t i o n f o r the main reason t h a t the l a t t e r i s not p a r t i c u l a r l y important f o r on-going commodity a c c o r d s , such as the t i n agreements. The p r e p a r a t o r y n e g o t i a t i o n s had by and l a r g e been c a r r i e d out be fore the f i r s t post-war agreement (1953) was n e g o t i a t e d . The subsequent agreements were i n l a r g e p a r t no more than renewals of preceeding agreements, which formed the b a s i s of n e g o t i a t i o n f o r each new t i n conference . I n o ther words , a j o i n t d e c i s i o n m a t r i x need not be formulated de nouveau at each new t i n conference . N e v e r t h e l e s s , p r e -p a r a t o r y n e g o t i a t i o n i s ve ry important i n the n e g o t i a t i o n of new commodity a c c o r d s , tha t i s , commodities f o r which there are no p r e -e x i s t i n g accords . P r e p a r a t o r y N e g o t i a t i o n Where there has been no p r i o r agreement f o r a commodity, the - 68 -United Nations Economic and Social Council Resolution 296 (XI) allows that a commodity conference may be called by an appropriate inter-governmental body, usually a commodity study group. Where there have existed previous agreements, the commodity council of that particular commodity requests a conference as a matter of course when the agreement in force is due to expire. The convening of study groups to recommend new accords is the responsibility of the Interim Co-ordinating Committee for International Commodity Arrangements (ICCICA), established by 48 ECOSOC in 1947. The ICCICA stresses that before a conference i s undertaken there must be (a) some assurance that an agreement i s a possibility, and (b) adequate preparation and the necessary documentation. The normal procedure leading to the setting up of a study group i s as follows:. (a) a request is received from an interested government or the ICCICA decides to seek the views of interested governments, (b) usually the ICCICA requests the Secretary-General of the UN to take soundings as to the views of principal importing and exporting countries, "using some objective basis as a criterion of interest", (c) in some cases, governments present at the preparatory meeting have considered i t advisable to establish on an ad hoc basis a standing committee to prepare for the establishment of a study group and to keep the situation - 69 -under rev iew (examples are l e a d , z i n c and t u n g s t e n ) , (e) the terms of re ference o f the study group are prepared e i t h e r by the p repara to ry meeting or the s t and ing committee, w i t h a request to i n d i c a t e whether they would be prepared 49 to become members of a study group. Once the study group has been e s t a b l i s h , i t se t s out to gather the necessary i n f o r m a t i o n and conducts s t u d i e s on the economic f a c t o r s governing' t rade i n tha t commodity, w i t h a v iew to a r r i v i n g a t a s u i t a b l e type of commodity arrangement f o r the product concerned. More i m p o r t a n t l y , the s tudy group prepares the d r a f t agreement, which may be compared to the Sawyer-Guetzkow step (b) of " f o r m u l a t i n g a l t e r n a t i v e s and pre ferences of each p a r t y i n t o a j o i n t d e c i s i o n m a t r i x " . Such p r e p a r a t i o n i s e s s e n t i a l before o p e r a t i o n a l n e g o t i a t i o n can proceed. As the ICCICA puts i t Measures designed to achieve the o b j e c t i v e s of a commodity agreement are n e c e s s a r i l y s p e c i f i c to each commodity. Only a f t e r hav ing gathered the b a s i c i n f o r m a t i o n . . . . w o u l d i t be p o s s i b l e to form a judgement on the p r a c t i c a l i t y of the mechanism of the proposed agreement. S ince the study group prov ides a forum f o r an i n t e r n a t i o n a l d i s c u s s i o n of both the problems and suggested remedies , the group would be i n a p o s i t i o n to make recommendations on the type o f arrangement which would bes t ensure an improvement i n the t rade of the commodity.50 The f o r m u l a t i o n of a l t e r n a t i v e s and pre ferences does not o f course end at the study group l e v e l ; many amendments are made to the d r a f t agreement presented to the de legates f o r c o n s i d e r a t i o n at the conference stage of n e g o t i a t i o n . At the study group l e v e l , " r e p r e s e n t a t i v e s are not prepared to d i s c u s s the d i f f i c u l t and c o n t r o v e r s i a l ques t ions such as those of A , I . 5 1 p r i c e s and quotas . - 70 -Pre-conference p r e p a r a t i o n a l so i n c l u d e s drawing up the agenda and d r a f t i n g the r u l e s o f p r o c e d u r e , i . e . , step (a) i n the Sawyer-Guetzkow sequence. T h i s work i s undertaken by the ICCICA where there e x i s t s no p r i o r agreement, and by the commodity c o u n c i l s where p rev ious agreements have been i n e x i s t e n c e . O p e r a t i o n a l N e g o t i a t i o n T h i s i s , o f cour se , c a r r i e d out at the conference l e v e l . By o p e r a t i o n a l n e g o t i a t i o n , I mean, by and l a r g e , s u b s t a n t i v e n e g o t i a t i o n , but i t may a l s o i n c l u d e the f o r m u l a t i o n o f a l t e r n a t i v e s and p r e f e r e n c e s , which I c o n s i d e r as p a r t o f p repara to ry n e g o t i a t i o n . In s h o r t , o p e r a t i o n a l n e g o t i a t i o n i n c o r p o r a t e s b a r g a i n i n g and the use of communication, p e r s u a s i o n , t h r e a t , promises and the l i k e to secure d e s i r e d outcomes, i . e . , Sawyer-Guetzkow steps (c) and (d ) . An important f ea ture of ICA conferences i s t h a t n e g o t i a t i o n s are l a r g e l y c a r r i e d out i n c l o s e d s e s s i o n s . Apart from the opening and c l o s i n g genera l statements by de legates a t the beg inning and at the end o f a conference , n e g o t i a t i o n s f o r the most par t are h e l d behind c l o s e d d o o r s , the major d e c i s i o n s be ing made by an E x e c u t i v e Committee. The ICCICA underscores the importance o f keeping n e g o t i a t i o n s c l o s e d f o r the f o l l o w i n g reason : . . . t h i s tends to reduce or e l i m i n a t e s p e c u l a t i o n which might be based on the b a r g a i n i n g p o s i t i o n taken by the group at a g i v e n t ime . P a r t i c u l a r l y where p r i c e s are under c o n s i d e r a t i o n such d i s c u s s i o n s should not be a l lowed to i n f l u e n c e the market . - 71 -For c a r r y i n g out the main work of the conference , the E x e c u t i v e Committee se t s up two p r i n c i p a l committees - the Economic Committee and the A d m i n i s t r a t i v e and L e g a l Committee. The f i r s t , i n t u r n , u s u a l l y se t s up i t s own sub-committees - a T e c h n i c a l Committee and a S t a t i s t i c a l Committee, which dea l w i t h t e c h n i c a l ques t ions such as p r i c e d i f f e r e n t i a l s f o r v a r i o u s grades of the commodity and es t imates of t o t a l w o r l d requirements of the commodity. However, the b u l k o f the work of the Economic Committee c o n s i s t s of n e g o t i a t i n g the terms of the agreement, w h i l e the A d m i n i s t r a t i v e Committee d e f i n e s and c l a r i f i e s these terms and makes the necessary a r range-ments to implement the agreement. There i s y e t a t h i r d committee, the S t e e r i n g Committee, which i s e s t a b l i s h e d to guide the chairman and e x e c u t i v e s e c r e t a r y i n o r g a n i z i n g the work of the conference . A l e s s fo rmal s t r u c t u r e of ICA n e g o t i a t i o n s i s the work ing  p a r t y . T h i s i s an ad hoc group of de lega te s se t up to d i s c u s s and h o p e f u l l y r e s o l v e some of the more d i f f i c u l t i s s u e s , which have brought the l a r g e r committees to a dead lock . As the ICCICA observes , As d i f f e r e n t i s s u e s of a complex na ture are r a i s e d d u r i n g the conference i t i s u s u a l to set up work ing p a r t i e s to d e a l w i t h them. With a v iew to making v progre s s , i t has been found most u s e f u l to i s o l a t e i n t h i s way the separate i s s u e s f o r c o n s i d e r a t i o n by s m a l l groups . For example, i n the 1970 t i n n e g o t i a t i o n s , the Economic Committee set up a working p a r t y to cons ider the d e l i c a t e i s s u e of b u f f e r s t o c k 54 f i n a n c i n g . Yet another i n f o r m a l aspect of the o p e r a t i o n a l n e g o t i a -t i o n i n commodity agreements i s the separa te group meetings of produc ing - 72 -and consuming c o u n t r i e s on the assumption tha t most i n t e r e s t s tend to coa le sce a long producer-consumer l i n e s . V o t i n g : Dur ing a conference no attempt i s made to i n t r o d u c e any form of v o t i n g , f o r example, the weighted v o t i n g system tha t i s used i n commodity c o u n c i l s ( to be e x p l a i n e d b e l o w ) . I n s t e a d , under the r u l e s of procedure which the ICCCTA has framed, the chairman i s supposed to " a s c e r t a i n the sense of the meeting i n l i e u of a formal v o t e . " I f t h i s i s not p o s s i b l e , the i s s u e i s de fe r red to another time o r r e f e r r e d to another group, u s u a l l y a work ing p a r t y . A fo rma l vote may be reques ted , but i t appears that de legates g e n e r a l l y recogni se the importance of the i n t e r e s t s of c o u n t r i e s p a r t i c u l a r l y concerned about an i s s u e and do not i n s i s t on a vote where such a c t i o n would make i m p o s s i b l e to cont inue the work o f the conference . Thus, i t f o l l o w s t h a t where a major produc ing country or consuming country i s opposed to a p a r t i c u l a r measure, i t has de f ac to veto on tha t measure. The converse , however, may not be t r u e , i . e . , where a major producer or consumer i s i n favour of a p a r t i c u l a r measure, i t does not mean tha t the measure w i l l be approved f o r the s imple reason tha t o ther producers and/or consumers may oppose i t . The f o r m u l a t i o n of a l t e r n a t i v e s and pre ferences i n a j o i n t d e c i s i o n m a t r i x i s a r r i v e d at o n l y i n t e n t a t i v e form at the study group l e v e l . At the conference stage o f n e g o t i a t i o n , the terms are f u r t h e r pursued , p a r t i c u l a r l y w i t h respect to p r i c e - f i x i n g and quotas . ( In the case o f t i n , b u f f e r s tock ques t ions are a l s o a prime bone o f c o n t e n t i o n . ) Where s ta lemates occur on these q u e s t i o n s , i t i s necessary sometimes f o r d e l e g a t i o n s to seek i n s t r u c t i o n s from the home government, and the - 7 3 -conference adjourns f o r t h i s purpose. The Havana Char ter and UNCTAD p r o v i d e no more than genera l g u i d e l i n e s on p r i c e s and quotas . The outcome of any commodity agreement i s as much a f u n c t i o n of the b a r g a i n i n g s t r a t e g i e s , p l o y s and s k i l l s of the p a r t i e s concerned as i t i s the r e s u l t of the b a r g a i n i n g s t reng ths of these p a r t i e s , the l a t t e r be ing l a r g e l y determined by the s t r u c t u r a l c h a r a c t e r i s t i c s of p r o d u c t i o n , consumption and t rade o f a commodity. The Opera t ion of an Agreement The d u r a t i o n o f an ICA i s u s u a l l y not more than f i v e y e a r s . The agreement comes i n t o f o r c e a f t e r a complex process of s i g n a t u r e s , r a t i f i c a t i o n , acceptance , approva l and a c c e s s i o n by governments has been o b t a i n e d . (See Appendix A , A r t i c l e s 44-48.) A c c e s s i o n i s the f i n a l step i n d i c a t i n g t h a t the acceding government w i l l p a r t i c i p a t e i n the implementat ion of an agreement. C e r t a i n c o n d i t i o n s a l s o need to be f u l -f i l l e d before an ICA can come i n t o f o r c e . These o b j e c t i v e s are framed i n the l i g h t of the o b j e c t i v e s and nature of a p a r t i c u l a r agreement. I n most cases , where agreement i n v o l v e s r e g u l a t i n g the trade i n a commodity, a minimum percentage of wor ld t rade must be .covered by the p a r t i c i p a n t s before the o p e r a t i o n of the agreement can be e f f e c t i v e . As such , t i n , c o f f e e , wheat, and sugar agreements r e q u i r e tha t t h i s c o n d i t i o n . b e s a t i s f i e d before an agreement can come i n t o f o r c e . In the f i r s t two cases a minimum number of producing and consuming c o u n t r i e s are a l s o r e q u i r e d to accede to an agreement. The o l i v e o i l agreements, however, - 74 -only require that a certain number of "substantially interested" countries accede as the main objective of the agreements is to improve marketing of 56 the commodity, rather than regulate price. The specific conditions for an international tin agreement to come into force are: accession by at least six producing countries holding 950 votes out of a total 1,000 (see.below), and nine consuming countries holding 300 votes also out of a total 1,000 (see Appendix, Article 47). The t i n agreements are particularly stringent in requiring producer participation because price is maintained by a buffer stock financed by producing countries. Finally an agreement has to be implemented. This is done by the commodity council - the on-going body of an agreement. The members f a l l into two categories: producing (exporting) countries and consuming (importing) countries, each having a thousand votes which are distributed and weighted according to the proportion of exports of imports of the individual participating countries. For example, in the 1970 Tin Agreement, the top three producers - Malaysia, Bolivia and Thailand -were assigned, respectively, 442, 164, and 139 votes each, while the top two consumers - United States and Japan - had 310 and 121 votes res-pectively. These votes are calculated for a l l participants in a conference and are changed accordingly after the actual acceding governments have been determined. In addition.to these percentage votes, each participating country receives five i n i t i a l votes. No country may receive more than 450 votes. (See Appendix, Article 11 and Annexes A and B.) Decision-making in the Council is effected through four different voting systems: - 75 -1) a s imple m a j o r i t y v o t e , taken by producers and consumers as a whole ; 2) a s imple d i s t r i b u t e d m a j o r i t y v o t e , i . e . , s imple m a j o r i t y vo te s taken by producers and consumers s e p a r a t e l y ; 3) a t w o - t h i r d s m a j o r i t y v o t e , taken by producers and consumers as a whole ; and 4) a t w o - t h i r d s d i s t r i b u t e d m a j o r i t y v o t e , i . e . , t w o - t h i r d s m a j o r i t y vo te s taken by producers and consumers s e p a r a t e l y . Which of the four v o t i n g systems w i l l be used depends l a r g e l y on the importance of the i s s u e at hand. For the more important d e c i s i o n s - f o r example, ques t ions of export c o n t r o l - u s u a l l y a t w o - t h i r d s d i s t r i b u t e d m a j o r i t y vote i s r e q u i r e d . The o ther more important d e c i s i o n s that the T i n C o u n c i l makes r e l a t e to the d i s p o s a l of non-commercial s tocks and a c t i o n d u r i n g a t i n shor tage , as w e l l as the s e t t i n g up of v a r i o u s committees to study the on-going problems o f the t i n i n d u s t r y . For the most p a r t , however, the C o u n c i l merely implements the terms o f an agreement as decided by the p a r t i c i p a n t s at a conference . I l l THE DECISION TO GO FOR ACCORD I f we cons ider producing and consuming c o u n t r i e s n e g o t i a t i n g t i n agreements i n a game theory c o n t e x t , we w i l l f i n d tha t b a s i c a l l y a mixed i n t e r e s t s or mixed-mot ive"^ b a r g a i n i n g problem o b t a i n s . In essence, t h i s means t h a t producers and consumers have both competing and common i n t e r e s t s i n t i n t r a d e . I f t h e i r i n t e r e s t s were p u r e l y c o m p e t i t i v e , there cou ld be no n e g o t i a t i o n of t i n agreements; on the o ther hand, i f t h e i r i n t e r e s t s comple te ly o v e r l a p p e d , there need be no such n e g o t i a t i o n . " P u r e " s i t u a t i o n s such as these c l e a r l y do not e x i s t i n the r e a l w o r l d i n which i n t e r e s t s are i n v a r i a b l y mixed to some degree. In the case of the p a r t i e s i n t i n t r a d e , we would agree i n genera l tha t producing c o u n t r i e s would l i k e a h i g h p r i c e f o r t h e i r product and consuming c o u n t r i e s a low p r i c e . We would a l s o agree that n e i t h e r a h i g h p r i c e nor a low p r i c e cou ld be mainta ined i n the f ree market f o r very l o n g . However, the p r i c e f o r both s ide s c o u l d be s t a b i l i s e d through the c o n t r o l mechanism of a commodity agreement, which reduces the p r i c e from f l u c t u a t i n g between very h i g h and very low. I t f o l l o w s , t h e n , that the pre ferences o f producers and consumers are as f o l l o w s : Producers 1. High p r i c e wi thout commodity agreement 2. Medium range p r i c e w i t h agreement 3. P r i c e f l u c t u a t e s between h i g h and low wi thout agreement 4. Low p r i c e wi thout agreement Consumers 1) Low p r i c e wi thout agreement 2) Medium-range p r i c e w i t h agreement 3) P r i c e f l u c t u a t e s between low and h i g h wi thout agreement. 4) High p r i c e wi thout agreement To i l l u s t r a t e these pre ferences o f producers and consumers i n a game m a t r i x , we need to know more than the order of p r e f e r e n c e s ; we have to know the p a y o f f s , expressed i n terms of u t i l i t y , f o r each of the - 77 -p o s s i b l e e i g h t outcomes tha t can occur f o r the two p a r t i e s . The e i g h t d i f f e r e n t outcomes w i l l t h e r e f o r e be ass igned numbers, or u n i t v a l u e s 58 of u t i l i t y , r e p r e s e n t i n g the payof f of each outcome to the two p a r t i e s . We w i l l draw on our e a r l i e r ana lys i s of t i n agreements and the r e l a t i v e s takes of producers and consumers i n t i n t rade to a s s i gn these u t i l i t i e s . The example, however, should be taken as i l l u s t r a t i v e r a t h e r than r e a l . We may get the f o l l o w i n g m a t r i x : 5 ,3 -10,0 0,5 -10 , -5 M a t r i x 1: S u b s c r i p t 1 - " c o o p e r a t e " ; S u b s c r i p t 2 - "compete" In the m a t r i x above, we have c o l l a p s e d the s t r a t e g i e s a v a i l a b l e to producers (P) and consumers (C) i n t o two: " c o o p e r a t e " , i . e . , p a r t i c i -pate i n a t i n agreement, or "compete" , i . e . , g ive f r ee r e i g n to market f o r c e s o p e r a t i n g on the p r i c e of t i n . The payof f s f o r producers when they choose to cooperate are 5 u n i t s when consumers a l s o choose to cooperate ( i . e . Agreement at P_^, C^) , and 0 u n i t s when consumers choose — — 59 not to cooperate (No Agreement a t P ^ , C^ ) . When producers choose to compete (No Agreement at P 2 , and P, , , C^) , the payof f s are a p o s i t i v e 10 u n i t s or a nega t ive 10 u n i t s , i n d i c a t i n g tha t at t imes a very h i g h - 78 -p r i c e may be mainta ined but at o ther t i m e s , i t may plummet to e q u a l l y low l e v e l s . For consumers, when they choose to coopera te , ,the payof f s are 3 u n i t s when producers a l s o choose to cooperate (Agreement at P ^ , C^) , and 0 u n i t s when producers choose to compete (No Agreement a t 60 C^) . When consumers choose not to cooperate (No Agreement at P ^ , and P £ , , tha t i s , market fo rce s are a l lowed f r e e r e i g n , the payof f s are a p o s i t i v e 5 u n i t s or a d i s u t i l i t y a l s o of 5 u n i t s , i n d i c a t i n g p r i c e f l u c t u a t i o n s between low and h i g h . I t should be ev ident that the d i f f e r e n c e i n payoffs when 'Agreement' and 'No Agreement' obta in" i s always s m a l l e r f o r consumers (3-0 = 3^ , 5-3 = 1_, and 3- (-5) = iOthan i t i s f o r producers (5-0 = _5, 10-5 = _5, and 5- (-10) = 15) . The l o g i c of t h i s d i f f e r e n c e l i e s i n the r e l a t i v e stakes of producers and consumers i n t i n t r a d e . S ince we found, i n an e a r l i e r s e c t i o n , tha t producers have a h igher s take i n t i n t rade than consumers, i t should f o l l o w t h a t both the s a l u t a r y and adverse e f f e c t s t h a t a t i n agreement or market f o r c e s may have on the p r i c e o f t i n must n e c e s s a r i l y r e g i s t e r h i g h e r va lue s f o r producers than f o r consumers.. S ta ted d i f f e r e n t l y , the u t i l i t y of a h i g h p r i c e i s g r e a t e r to producers than i s the u t i l i t y of a low p r i c e to consumers, and s i m i l a r l y , a s t a b l e middle-range p r i c e i s of g r e a t e r < u t i l i t y to producers than consumers. T h i s p r o p o s i t i o n should be a t once ev ident when one r e c a l l s tha t producing c o u n t r i e s are Southern c o u n t r i e s h e a v i l y dependent on the t rade i n t i n f o r export e a r n i n g s . The b a r g a i n i n g problem i n v o l v e d i n the n e g o t i a t i o n of t i n agreements can be f u r t h e r i l l u s t r a t e d i n a two-dimens iona l " n e g o t i a t i o n - 79 -g r a p h " , i n which the payof f s i n M a t r i x 1 are p l o t t e d . (F igure 1 ) . In the g r a p h i c a l r e p r e s e n t a t i o n of M a t r i x 1, the s p e c i a l p o s i t i o n of V^, , when both producers and consumers choose not to cooperate , i s immediate ly apparent . For t h i s outcome a l o n e , the u t i l i t y of both p a r t i e s c o u l d be increa sed by t h e i r choosing any of the o ther three outcomes. Among these three outcomes ( P ^ C^l P.^, C^; and P 2 > C^) , however, an i n c r e a s e i n the u t i l i t y o f one n e c e s s a r i l y means a decrease i n the u t i l i t y o f the o t h e r . These outcomes are c a l l e d Pareto opt ima , a f t e r the French econo-m i s t V i f r e d o P a r e t o , who f i r s t used the n o t i o n . For any p o i n t that i s not P a r e t o - o p t i m a l , another p o i n t can be found p r o v i d i n g g rea te r u t i l i t y f o r one p a r t y wi thout decreas ing the u t i l i t y of the o ther p a r t y . B a r g a i n i n g " s o l u t i o n s " are t h e r e f o r e u s u a l l y assumed to be a r r i v e d at a p o i n t on the " u t i l i t y f r o n t i e r " which i s the l i n e drawn through a l l the pareto opt ima. The preced ing d i s c u s s i o n t e l l s us tha t i t would be l o g i c a l f o r producers and consumers to agree to cooperate i n s t a b i l i s i n g the p r i c e of t i n . There i s s t i l l the problem of n e g o t i a t i n g the a c t u a l c o n t r o l p r i c e . I t i s p o s s i b l e t h a t the b a r g a i n i n g over the c o n t r o l p r i c e may develop i n t o a zero-sum game. Indeed, t h i s might w e l l be the case i f one assumes a one-to-one r e l a t i o n s h i p between p r i c e and u t i l i t y f o r the b a r g a i n i n g p a r t i e s , i . e . , an increa se i n the p r i c e corresponds to an i n c r e a s e i n producer s ' u t i l i t y w h i l e decreas ing t h a t of consumers, and '. l o w e r i n g of the p r i c e corresponds to a decrease i n producer s ' u t i l i t y w h i l e i n c r e a s i n g tha t of consumers. I n s h o r t , we have the c l a s s i c zero-sum game where the ga in of one equals the l o s s of the o t h e r . We can i l l u s t r a t e t h i s - 80 -- 5 0 5 1 0 UTILITY TO P FIGURE 1: GRAPHICAL ILLUSTRATION OF MATRIX 1 - 81 -q u i t e s imply i n a game m a t r i x , where producers and consumers can e i t h e r choose to increa se o r lower a g iven p r i c e , be i t the e x i s t i n g c o n t r o l p r i c e as i n the case of on-going t i n agreements, or any proposed p r i c e as i n the n e g o t i a t i o n of new agreements. We may get the f o l l o w i n g m a t r i x ( a g a i n , ba s ing the va lue s on the a s s e r t i o n tha t producers have a h e a v i e r stake i n t i n agreements than consumers) : '10 0 -5 M a t r i x 2 ; S u b s c r i p t 1 - " i n c r e a s e p r i c e " ; S u b s c r i p t 2 -" lower p r i c e " . We can see tha t the best outcome f o r producers i s P ^ , w i t h a payoff of 10 , i . e . , when both s i d e s agree to i n c r e a s e the p r i c e . The best outcome f o r consumers i s C 2 w i - t n a payof f o f 5 , when both p a r t i e s 62 dec ide to decrease the p r i c e . I f e i t h e r s i d e chooses an o p p o s i t e 63 s t r a t e g y from the o t h e r , the payof f to both i s 0 , i n d i c a t i n g t h a t no agreement can be reached on f i x i n g the p r i c e and t h e r e f o r e the s t a t u s quo p r e v a i l s , i . e . , n e i t h e r s i d e ga ins nor l o s e s . The game i n f ac t has a s a d d l e p o i n t , i . e . , a p o i n t where a " s t a b l e s o l u t i o n " r e s t s , i f both p l a y e r s were r a t i o n a l . T h i s i s the p o i n t P ^ , where i f producers choose to increa se the p r i c e , the worst tha t can happen to them i s 0 u t i l i t y . - 82 -S i m i l a r l y , i f consumers choose to decrease the p r i c e , the worst tha t can happen to them i s a u t i l i t y of 0. There i s no sense i n producers choos ing thereby opening themselves to a d i s u t i l i t y of -5 i f the o ther s i d e chooses C^. S i m i l a r l y , consumers w i l l be f o o l i s h to choose and be v u l n e r a b l e to a h i g h nega t ive payoff ( -10) . C l e a r l y the above game i s an o v e r s i m p l i f i c a t i o n , but i t does i l l u s t r a t e the p o i n t that p r i c e b a r g a i n i n g i f i t becomes zero-sum w i l l l e a d to non-agreement. The 1962 cocoa agreement n e g o t i a t i o n s foundered l a r g e l y because p r i c e b a r g a i n i n g d i d become z e r o - s u m . ^ S i m i l a r l y , the 1965 T i n Agreement may have c o l l a p s e d i f M a l a y s i a and B o l i v i a were not f i n a l l y granted the p r i c e increa se s they sought. However, f o r the most p a r t , t i n agreementshave a v o i d e d , though not e n t i r e l y e l i m i n a t e d , z e r o - sum b a r g a i n i n g by hav ing a c o n t r o l p r i c e tha t f l u c t u a t e s between a f l o o r and a c e i l i n g , i n s t e a d of a s i n g l e p r i c e . F l e x i b l e p r i c e arrangements i n c r e a s e the l a t i t u d e of c h o i c e f o r the b a r g a i n i n g p a r t i e s . W i t h i n l i m i t s , producers and consumers can now have t h e i r "own" p r i c e , as i t were. Stated d i f f e r e n t l y , consumers can devote a l l t h e i r energ ies i n s e c u r i n g a low f l o o r p r i c e and producers concentra te t h e i r e f f o r t s on s ecur ing a h i g h c e i l i n g p r i c e . However, the f i n a l f l o o r and c e i l i n g p r i c e s decided on must never be below the minimum d i s p o s i t i o n s ^ " * of producers and consumers r e s p e c t i v e l y , i . e . , the minimum p r i c e producers w i l l accept f o r t h e i r good and the maximum p r i c e consumers w i l l pay f o r i t . The preceding d i s c u s s i o n has attempted to focus on the broad - 83 -c o n s i d e r a t i o n s that i n f l u e n c e producers and consumers to n e g o t i a t e t i n accords . We t r i e d to show tha t g iven the s t r u c t u r a l c h a r a c t e r i s t i c s of t i n t r a d e , i t i s i n the i n t e r e s t s of both producers and consumers to p a r t i -c i p a t e i n such accords . I t i s e s p e c i a l l y i n the i n t e r e s t s of Southern producing c o u n t r i e s , h e a v i l y dependent on the income, from t i n t r a d e , to conclude such agreements w i t h the consuming c o u n t r i e s . We-suggested, a l s o , tha t the f i n a l d e c i s i o n to p a r t i c i p a t e i n such agreements r e s t s on the n e g o t i a t i o n o f the p r i c e range to be implemented by an agreement. However, 66 the p i c t u r e prov ided so f a r has been b a s i c a l l y a s t a t i c one. We have yet to probe i n t o the " b l a c k box" of b a r g a i n i n g which i n v o l v e s the whole process of p e r s u a s i o n , communication, the use of t h r e a t s and promises and the l i k e , to secure f avourab le outcomes. For example, we i n t r o d u c e d the n o t i o n s of u t i l i t y and. minimum d i s p o s i t i o n as i f they were f i x e d and unchangeable. C l e a r l y t h i s i s not the case . Not o n l y do u t i l i t i e s and minimum d i s p o s i -t i o n s of b a r g a i n i n g p a r t i e s change w i t h time and c i r cumstance , but what i s more i m p o r t a n t , can be changed by the b a r g a i n i n g p a r t i e s i n v o l v e d . Furthermore , new a l t e r n a t i v e s can become a v a i l a b l e i n any b a r g a i n i n g s i t u a t i o n , thereby changing the whole s t r u c t u r e of the d e c i s i o n m a t r i x and n e g o t i a t i o n graph. I t i s t h i s dynamic aspect of b a r g a i n i n g - the m o d i f i c a t i o n o f u t i l i t i e s , minimum d i s p o s i t i o n s and a l t e r n a t i v e s -that I propose to examine i h the next c h a p t e r , under the b r o a d l y de f ined r u b r i c of " b a r g a i n i n g s t r a t e g i e s " . CHAPTER I I I SOUTHERN BARGAINING STRATEGIES: PAST USAGE AND FUTURE POSSIBILITIES In t h i s chapter , I propose to examine the k i n d s of b a r g a i n i n g s t r a t e g i e s Southern producing c o u n t r i e s have used and can use v i s - a - v i s Northern consumers i n t i n n e g o t i a t i o n s . A b a r g a i n i n g s t r a t e g y i s de f ined b r o a d l y to i n c l u d e any method or t echn ique , v e r b a l and non-v e r b a l , that a p a r t y can b r i n g to bear on the o ther p a r t y i n i n f l u e n c i n g i t to act i n the f i r s t p a r t y ' s f avour . Thus, b a r g a i n i n g s t r a t e g i e s would encompass most of the a c t i v i t y i n v o l v e d i n o p e r a t i o n a l n e g o t i a t i o n as we have de f ined i t . More s p e c i f i c a l l y , b a r g a i n i n g dea l s w i t h the m o d i f i c a t i o n of u t i l i t i e s , minimum d i s p o s i t i o n s and the a l t e r n a t i v e s a v a i l a b l e to the b a r g a i n i n g p a r t i e s . A b a r g a i n i n g s t r a t e g y would t h e r e -fo re - be a method by which such m o d i f i c a t i o n i s e f f e c t e d to the advantage of the i n i t i a t o r . My i n t e n t i o n i s to p r o v i d e something of a c h e c k - l i s t of s t r a t e g i e s that have been employed and can be employed by Southern producing c o u n t r i e s i n t i n n e g o t i a t i o n s . S ince t h i s i s an e x p l o r a t o r y s tudy , I have cas t my nets r a t h e r wide i n c o n s i d e r i n g the s t r a t e g i e s a v a i l a b l e to Southern producer s , but d e s p i t e t h i s , I make no c l a i m tha t a l l p o s s i b i l i t i e s have been exhausted. The s t r a t e g i e s o u t l i n e d and formulated should bes t be understood i n terms of how a_ Southern country may b a r g a i n i n t i n n e g o t i a t i o n s , w i t h the assumption tha t the grea ter the number of Southern producers a c t i n g i n concert on any s t r a t e g y , the g rea te r would be the l i k e l i h o o d of success . There i s some ev idence , however, that Southern c o u n t r i e s take reasonably s i m i l a r b a r g a i n i n g p o s i t i o n s on a number of i s s u e s , as s h a l l - 85 be seen. I have attempted to arrange the s t r a t e g i e s on some k i n d of a " m i l d - t o - s t r o n g " continuum, that i s , they range from s t r a t e g i e s of normative appeal and those employing " s o f t " per sua s ion techniques through to those employing " h a r d " techniques such as t h r e a t s and f a i t s  a ccompl i s . The problem of a s se s s ing the e f f i c a c y of these s t r a t e g i e s and making recommendations f o r t h e i r f u t u r e usage w i l l be l a r g e l y under-taken i n a separate s e c t i o n a f t e r the s t r a t e g i e s have been de sc r ibed and i l l u s t r a t e d . I n f l u e n c i n g the Opponent's N o r m a t i v e - P o s i t i o n The group of s t r a t e g i e s to be cons idered under t h i s heading are among the more common and popular ones used i n b a r g a i n i n g s i t u a t i o n s , a l though they are at the same time some of the more d i f f i c u l t to execute s u c c e s s f u l l y . When one employs such s t r a t e g i e s , one, i n e f f e c t , t e l l s the opponent, " I f t h i s i s your normat ive p o s i t i o n , you should do t h u s . . . " . There are two broad ways of approaching such s t r a t e g i e s : one c o u l d merely p o i n t out to the opponent tha t h i s normative p o s i t i o n demands tha t he takes a p a r t i c u l a r course of a c t i o n which i s f avourab le toward one, or one cou ld a c t u a l l y attempt to s h i f t h i s normat ive p o s i t i o n i n such a way that he takes an a c t i o n tha t i s f avourab le toward one. The end r e s u l t i s e s s e n t i a l l y the same — i f one succeeds i n con-v i n c i n g the opponent of the normative va lue ( to him) of a p a r t i c u l a r course o f a c t i o n , he must n e c e s s a r i l y x<rant to pursue tha t course of ac-t i o n . In b a r g a i n i n g terms, one would have succeeded i n modi fy ing the opponent's u t i l i t y ( s a t i s f a c t i o n ) from an outcome. There are b a s i c a l l y - 86 -three v a r i a n t s of t h i s s t r a t e g y that I w i s h to c o n s i d e r , two of which have been w i d e l y used i n t i n n e g o t i a t i o n s . The f i r s t may be c a l l e d the " a l t r u i s m approach" , the second, the "democracy approach" , and the t h i r d , "promoting empathy". The a l t r u i s m approach: E s p e c i a l l y s i n c e the convening of UNCTAD, i t i s common, i n t i n n e g o t i a t i o n s , to hear Southern delegates t a l k of the new k i n d of e t h i c tha t has been f o s t e r e d i n the r e l a t i o n s among n a t i o n s . Some c a l l e d i t a "ne\j m o r a l i t y " and r e l a t e d i t to " s o c i a l j u s -t i c e " , an "ordered w o r l d " , and "peace" ; and others c a l l e d i t a "new o r i e n t a t i o n " f o r t i n agreements . 1 More s p e c i f i c a l l y , t h i s new e t h i c r e f e r r e d to the va lues engendered by the UNCTAD movement, which were based on the need f o r a more e q u i t a b l e i n t e r n a t i o n a l r e - d i s t r i b u t i o n of economic w e l l - b e i n g . When Southern delegates r e f e r to the UNCTAD e t h i c i n t i n n e g o t i a t i o n s , they a r e , i n e f f e c t , a t tempt ing to persuade t h e i r Nor thern counterpar t s of the m o r a l i t y of c e r t a i n courses of a c t i o n ; more s p e c i f i c a l l y , they are appea l ing to Nor thern a l t r u i s m . The l i n e of reasoning g e n e r a l l y goes as f o l l o w s : Many N o r t h e r n c o u n t r i e s espouse the i d e a l s f o s t e r e d by UNCTAD i f not e x p l i c i t l y , at l e a s t t a c i t l y . As such , they should approach t i n agreements from a " w e l f a r e " p e r s p e c t i v e . I t f o l l o w s t o o , t h a t they should cons ider the q u e s t i o n o f p r i c e - f i x i n g and c o n t r i b u t i o n s to the b u f f e r s tock on the p r i n c i p l e , "From each ac-c o r d i n g to h i s a b i l i t y , to each accord ing to h i s n e e d . " Th i s s t r a t e g y i s used most o f t en w i t h re spec t to the b u f f e r s tock i s s u e , i n p a r t i c u l a r , w i t h respect to the f a c t tha t consumers do not con-- 87 -t r i b u t e to the f i n a n c i n g of the b u f f e r s t o c k . For example, the T h a i delegate to the 1960 conference complained that the c o u n t r i e s c o n t r i b -3 u t i n g to the b u f f e r s tock were the ones l e a s t ab le to do so . S i m i l a r l y , the M a l a y s i a n r e p r e s e n t a t i v e to the 1965 conference s a i d that the burden of m a i n t a i n i n g the b u f f e r s t o c k was a matter of "grave concern" to the producer c o u n t r i e s : I t h u r t none but the producer ; the p r i n c i p l e seems to be : "To him tha t h a t h , more s h a l l be g i v e n ; from him who g i v e t h , more s h a l l be taken away." The producer s ' burden w i l l not be l i g h t e n e d f o r another f i v e long y e a r s . Condemned to the same o l d f l o o r p r i c e , he would a l s o be r e q u i r e d to s u b s i d i z e the consumer by p r o v i d i n g out of h i s own meagre ea rn-ings the means w i t h which to keep the p r i c e at or below the c e i l i n g . ^ The second p a r t of the quote a l s o i n d i c a t e s that Southern producers employ the a l t r u i s m approach or some form of moral per sua s ion i n b a r g a i n i n g f o r h i g h e r p r i c e s to be f i x e d i n t i n agreements. I t i s a l s o o f t en used to persuade n o n - p a r t i c i p a t i n g consumer c o u n t r i e s to become p a r t i e s to t i n agreements. The B o l i v i a n r e p r e s e n t a t i v e to the 1965 n e g o t i a t i o n s thought tha t i t was no longer p o s s i b l e to regard i n t e r -n a t i o n a l t rade from a p u r e l y commercial ang le . Present-day m o r a l i t y demanded " t h a t prosperous c o u n t r i e s should c o n t r i b u t e to the economic development of the l e s s favoured c o u n t r i e s , not on ly by p r o v i d i n g as-s i s t a n c e , but a l s o h e l p i n g to e s t a b l i s h f a i r and remunerat ive p r i c e s f o r commodities exported by many of the deve lop ing c o u n t r i e s . " ^ Us ing the same approach, the T h a i de legate argued tha t s i n c e c o u n t r i e s l i k e the US, USSR, and F e d e r a l R e p u b l i c o f Germany were a l ready coope r a t i ng - 88 -w i t h the ITC, they should a f f i r m t h e i r "sound moral i n t e n t i o n s " by j o i n i n g the agreement. Thus, the a l t r u i s m b a r g a i n i n g s t r a t e g y i s a popular s t r a t e g y among Southern produc ing c o u n t r i e s . The democracy approach: Th i s i s the second v a r i a n t of the moral per suas ion s t r a t e g y and p e r t a i n s p a r t i c u l a r l y to the q u e s t i o n of b u f f e r s tock c o n t r i b u t i o n s . Ins tead of a l t r u i s m , t h i s s t r a t e g y uses as i t s p p i n t of departure democrat ic norms, e s p e c i a l l y the n o t i o n s of e q u a l i t y and f a i r n e s s . I t i s a l s o to a l a r g e extent used independent ly of the UNCTAD ' e t h o s ' . The l i n e of argument u s u a l l y takes the f o l l o w i n g p r o g r e s s i o n : " T i n agreements are no more the c a r t e l - l i k e r e s t r i c t i o n schemes they used to be i n the pre-war days. From 1953 onwards, f o l l o w i n g the Havana C h a r t e r , i t was agreed tha t consuming c o u n t r i e s should have an equal say i n the terms and opera t ions of t i n agreements. Such equal p a r t i c i p a t i o n has been i n s t i t u t i o n a l i z e d i n the T i n C o u n c i l , where produc ing c o u n t r i e s and consuming c o u n t r i e s each have a thousand votes to cas t i n d e c i d i n g the opera t ions of t i n agreements. Indeed, the p r i n c i p l e o f equal p a r t i c i p a t i o n i n dec i s ion-making has been adhered to de sp i t e the f a c t tha t the consuming c o u n t r i e s represented i n t i n agree-ments account f o r a much s m a l l e r p r o p o r t i o n of t o t a l t i n consumption than producers account f o r t o t a l p r o d u c t i o n . Thus, consuming c o u n t r i e s have gained equa l p a r t i c i p a t i o n i n t i n agreements, which f a c t producing c o u n t r i e s to not begrudge them. However, produc ing c o u n t r i e s ob jec t s t r o n g l y to the c o n t i n u i n g anomaly tha t consumers do not c o n t r i b u t e - 89 -e q u a l l y to the maintenance and opera t ions of t i n agreements. Most i m p o r t a n t l y , consumers do not c o n t r i b u t e to the f i n a n c i n g of the b u f f e r s tock — the main ins trument o f c o n t r o l of t i n agreements. S u r e l y , t h i s should not be i f we a l l espouse the p r i n c i p l e , ' E q u a l p a r t i c i p a t i o n e n t a i l s equa l s h a r i n g of c o s t s ' " . Thi s i s a l s o a f a i r l y common s t r a t e g y employed by produc ing c o u n t r i e s i n t i n n e g o t i a t i o n s . For i n s t a n c e , the M a l a y s i a n delegate s a i d tha t c o n t r i b u t i o n to the b u f f e r s tock by producers a lone was " i l -l o g i c a l " s i n c e producers reaped e q u a l l y the b e n e f i t s from t i n agreements. In the Economic Committee meetings of the 1970 n e g o t i a t i o n s , the b u f f e r s tock i s s u e dominated the se s s ions w i t h prolonged debates between p r o -8 ducers and consumers on the manner the s tock should be f i n a n c e d . I n g e n e r a l , Southern compla ints centred around the i n h e r e n t u n f a i r n e s s of the present method of f i n a n c i n g , a l though they tended to couple t h i s democracy approach w i t h appeals to the s e l f - i n t e r e s t of consumers, w h i c h , a n a l y t i c a l l y s p e a k i n g , i s a d i f f e r e n t l y k i n d of b a r g a i n i n g s t r a t e g y , one we s h a l l cons ider l a t e r on . The Indones ian de legate summed up the debate i n the f o l l o w i n g terms: The new agreement . . . shou ld i n g r e a t e r measure r e f l e c t the p r i n c i p l e of p a r t n e r s h i p between consumers and producer s , ye t the l a t t e r ' s e f f o r t s to persuade the consuming c o u n t r i e s to shoulder p a r t of the burden now bourne e n t i r e l y by the produc ing c o u n t r i e s has been u n s u c c e s s f u l . N e v e r t h e l e s s , I have not g iven up hope that consuming c o u n t r i e s w i l l agree to share both i n b u f f e r s tock f i n a n c i n g and i n borrowing by the b u f f e r s t o c k . S ince the i s s u e ended i n dead lock , a work ing p a r t y was set up to d i s cus s - 90 -the forms o f f i n a n c i a l a s s i s t a n c e , e s p e c i a l l y from the I n t e r n a t i o n a l Monetary Fund, tha t might be a v a i l a b l e f o r b u f f e r s t o c k f i n a n c i n g . I n f a c t , an IMF r e p r e s e n t a t i v e partook i n the d e l i b e r a t i o n s and o u t l i n e d a number of ways i n which the w o r l d body c o u l d h e l p producers f inance the b u f f e r s t o c k . 1 ( ^ So, the q u e s t i o n of consumer p a r t i c i p a t i o n i n the b u f f e r s tock was bypassed i n the face of s t r o n g o b j e c t i o n s from major consuming c o u n t r i e s , e s p e c i a l l y the U n i t e d Kingdom, Japan, US and Canada. There were a number of consuming c o u n t r i e s , however, who were sympathet ic tox-jard equa l f i n a n c i a l r e s p o n s i b i l i t y w i t h re spect to b u f f e r s tock f u n d i n g , n o t a b l y France , the Nether lands and A u s t r a l i a . 1 1 I t i s i n t e r e s t i n g to note t h a t Southern c o u n t r i e s such as I n d i a and the P h i l i p p i n e s took no par t i n the b u f f e r s tock debate . These two c o u n t r i e s are i n the somewhat d e l i c a t e p o s i t i o n of b e i n g Southern c o u n t r i e s w h i l e a t the same time b e i n g consumers i n t i n agreements. Unders tandably , they d i d not speak out aga ins t t h e i r own d i r e c t i n t e r e s t s as consumers, w h i l e presumably, to pre serve Southern s o l i d a r i t y , n e i t h e r d i d they oppose the Southern produc ing c o u n t r i e s ' attempts to have con-sumers c o n t r i b u t e to the b u f f e r s t o c k . Promoting empathy: Thi s s t r a t e g y attempts to . change or s h i f t the o ther p a r t y ' s normative p o s i t i o n through the technique known to p s y c h o l -12 o g i s t s as " p e r m i s s i v e t h e r a p y " . I n b a r g a i n i n g terms, i t p r e s c r i b e s : " S t a t e the opponent's case f o r him so as to ensure h i s empathy w i t h •i 13 y o u r s . A n a t o l Rapoport l i s t s three steps i n promoting such empathy: 1) Conveying to the opponent tha t he has been heard and unders tood; - 91 -2) D e l i n e a t i n g the r e g i o n of v a l i d i t y of the opponent's s t a n d ; and 3) Induc ing the assumption of s i m i l a r i t y . Thus, what i s suggested here i s a r e v e r s a l of the s t e reo type behaviour one o f t e n f i n d s at the b a r g a i n i n g t a b l e where the p a r t i e s are i m p a t i e n t and even u n w i l l i n g to hear out t h e i r oppos i t e numbers. The i d e a of t h i s s t r a t e g y i s to convey to the opponent that one not on ly understands h i s va lues but tha t one apprec i a te s the v a l i d i t y of h i s s t a n d , thereby i n -v i t i n g the opponent to pay one the same compliment by showing h i s empathy f o r one's s t a n d . I w i l l now attempt to s t a t e the consumer's case i n t i n agreements i n the manner one might expect o f a Southern permi s s ive t h e r a p i s t : "The consuming c o u n t r i e s ' s t ake i n t i n agreements i s not very l a r g e , i f one measures t h i s s take i n terms of the percentage of t o t a l t rade that t i n represents f o r these c o u n t r i e s . T h e r e f o r e , one i s l e d to b e l i e v e tha t consumer i n t e r e s t i n t i n agreements i s not very s t r o n g as compared to the i n t e r e s t of p roduc ing c o u n t r i e s f o r whom t i n forms a l a r g e percentage of t r a d e . However, t i n remains an important i n p u t i n i n d u s t r i a l p r o d u c t i o n and consumers are t h e r e f o r e i n t e r e s t e d i n ac-q u i r i n g the meta l i n s u f f i c i e n t q u a n t i t i e s f o r t h e i r needs at f a i r p r i c e s on a r e g u l a r b a s i s . I t i s mainly f o r t h i s reason that consuming c o u n t r i e s have j o i n e d producing c o u n t r i e s i n implementing the mechanism of a commodity accord which aims at s t a b i l i s i n g the p r i c e of t i n and at the same time ensur ing that adequate s u p p l i e s are a v a i l a b l e . The more developed consuming c o u n t r i e s have a l s o expressed t h e i r i n t e r e s t i n - 92 -h e l p i n g the deve lop ing produc ing c o u n t r i e s to s t a b i l i s e t h e i r export earnings from t i n . Th i s i s a noble o b j e c t i v e , and commodity agreements are a p re -eminent ly e f f e c t i v e way of p u r s u i n g such an aim so long as the p a r t i c i p a t i n g c o u n t r i e s cooperate i n t a k i n g a l l reasonable steps to achieve t h i s end. There i s no reason to doubt that the p a r t i e s to t i n agreements have s i n c e r e l y and c o n s c i e n t i o u s l y committed themselves to such a g o a l . Now, l e t us cons ider the p o s i t i o n of producing c o u n t r i e s i n t i n agreements. I t i s o f t e n thought that our va lues are d i a m e t r i c a l l y op-posed to those of consuming c o u n t r i e s . There i s n o t h i n g f u r t h e r from the t r u t h ! Indeed, i f t h i s were the case , there c o u l d be no t i n agree-ments. Quite on the c o n t r a r y , the va lues of produc ing and consuming c o u n t r i e s are i n many ways very s i m i l a r . Let us d e l i n e a t e the area of commonality, or shared v a l u e s , among producers and consumers. F i r s t , producers and consumers a l i k e are i n t e r e s t e d i n an adequate supply of t i n at a l l t imes ; second, both s ide s agree that p r i c e s shou ld be f a i r to consumers and renumerat ive to p roducer s , and t h a t , l e f t to the work ing of market forces such a s i t u a t i o n may not o b t a i n ; t h i r d , produc ing c o u n t r i e s and consuming c o u n t r i e s share the v a l u e of f o s t e r i n g a h e a l t h y growth of the t i n i n d u s t r y ; and l a s t , but c e r t a i n l y not the l e a s t impor-t a n t , i s the i n t e r e s t of both s ide s i n promoting the economic deve lop-ment of the l e s s favoured n a t i o n s through t i n a c c o r d s . " Such attempts at promoting empathy w i l l not a u t o m a t i c a l l y guar-antee producers a good p r i c e or consumer c o n t r i b u t i o n to the b u f f e r s t o c k . - 93 -They merely prepare the ground f o r b a r g a i n i n g to be c a r r i e d out i n a " g i v e - a n d - t a k e " s p i r i t . The v a l u e of promoting empathy l i e s i n making the opponent more open to sugges t ions , where a n t a g o n i s i n g him may make him s o l i d i f y h i s b a r g a i n i n g p o s i t i o n . In promoting empathy, one t h e r e -fo re hopes to s h i f t the opponent 's normative p o s i t i o n i n one's f a v o u r . There i s l i t t l e use of t h i s s t r a t e g y i n t i n agreements. We noted e a r l i e r that the T h a i de legate i n 1965 urged US, USSR and West Germany to a f f i r m t h e i r "sound moral i n t e n t i o n s " by j o i n i n g the agreement, and N i g e r i a n r e p r e s e n t a t i v e a l s o appealed to the " c o n s c i e n c e " of n o n - p a r t i c i p a t i n g 14 c o u n t r i e s , which to some e x t e n t , may be seen as attempts at promoting re spons ivenes s , but by and l a r g e , delegates tend to base t h e i r appeal on the UNCTAD ethos and on a l t r u i s m . I n f l u e n c i n g the Opponent's P e r c e p t i o n of h i s U t i l i t y from an Outcome The prev ious group of s t r a t e g i e s were p r i m a r i l y based on normative c o n s i d e r a t i o n s . For the most p a r t , they were premised on the i d e a that the opponent should want to take a c e r t a i n course of a c t i o n i f he became convinced of i t s normative v a l u e . The s t r a t e g i e s to be cons idered now are l a r g e l y amoral i n n a t u r e . The f i r s t to be cons idered appeals d i r e c t l y to the s e l f - i n t e r e s t of the o ther p a r t y . The appeal to s e l f -i n t e r e s t i s a durab le n o t i o n i n b a r g a i n i n g and n e g o t i a t i o n , and i s by no means a n o v e l concept . As e a r l y as 1716, d u r i n g what has been n o s t a l g i c a l l y dubbed the Golden Age o f Diplomacy, de C a l l i e r e s had en jo ined diplomats to . . .make each p r o p o s i t i o n which you put forward as - 9A -a statement of the i n t e r e s t s of those w i t h whom you are n e g o t i a t i n g , f o r s i n c e diplomacy i s the attempt to f i n d a b a s i s f o r common a c t i o n or agreement, i t i s obvious that the more the opposing p a r t y can be brought to see your designs i n t h e i r own l i g h t and to accept them t h u s , the more s u r e l y w i l l t h e i r co-o p e r a t i o n f o r any a c t i o n be f r u i t f u l to themselves and to you."'""' In s h o r t , the sugges t ion i s that one should always p o i n t out to the opponent tha t he has a d i r e c t i n t e r e s t i n doing something that one wants done. By sugges t ing to the opposing par ty tha t something d i r e c t l y ben-e f i t s h i m , and c o n v i n c i n g him of i t , one would have, i n e f f e c t , i n f l u e n c e d h i s p e r c e p t i o n of ga in from a p a r t i c u l a r outcome. The second method of i n f l u e n c i n g the opponent 's p e r c e p t i o n of g a i n , which I w i l l c o n s i d e r , i n v o l v e s modi fy ing h i s minimum d i s p o s i t i o n , i . e . , the l e a s t 16 f avourable terms he would accept i n a b a r g a i n . The s t r a t e g y essen-t i a l l y e n t a i l s t e l l i n g (and conv inc ing ) the opponent tha t the terms were a c t u a l l y more f avourab le to him than he had o r i g i n a l l y thought . The t h i r d s t r a t e g y may be c a l l e d e x p l a i n i n g away a m i s p e r c e p t i o n which e s s e n t i a l l y i n v o l v e s modi fy ing the opponent 's p e r c e p t i o n of ga in by t e l l i n g him tha t he has i n f a c t mi sperce ived the u t i l i t y from a par -t i c u l a r outcome. 1 ^ The d i r e c t appeal to s e l f - i n t e r e s t : Quite s i m p l y , t h i s b a r -g a i n i n g s t r a t e g y e n t a i l s t e l l i n g the opponent, "You should want to do I Q t h i s f o r i t s d i r e c t b e n e f i t , which you p o s s i b l y do not f u l l y p e r c e i v e . " Such a b a r g a i n i n g s t r a t e g y can be a p p l i e d i n t i n n e g o t i a t i o n s p a r t i c u l a r l y w i t h respect to the b u f f e r s tock q u e s t i o n . I t i s g e n e r a l l y recogni sed " 95 " that the b u f f e r s tock mainta ined by t i n agreements i s not s u f f i c i e n t l y l a r g e to w i t h s t a n d d r a s t i c p r i c e movements, e s p e c i a l l y those i n the up-19 per l e v e l s . For example, an econometric study of the t i n market over 20 the p e r i o d 1948-61 found that the most s u c c e s s f u l s i z e was 35,000 t o n s , which i s 15,000 tons more than the s tock u s u a l l y mainta ined by t i n agree-ments. More i m p o r t a n t l y , i n c r e a s i n g the s i z e of the b u f f e r s tock would tend to be more o f a check on p r i c e s r i s i n g above the c e i l i n g than a check on the f l o o r p r i c e , as the l a t t e r can a l ready be b u t t r e s s e d by export c o n t r o l measures i f b u f f e r s tock opera t ions prove inadequate . In s h o r t , i n c r e a s i n g the s i z e o f the b u f f e r s t o c k would be i n the i n t r i n s i c i n t e r e s t of consuming c o u n t r i e s . A l a r g e r b u f f e r s tock i s , of cour se , a l s o to the b e n e f i t of producers as i t would mean that the f l o o r p r i c e can be defended e f f e c t i v e l y w i t h a minimum or even w i t h o u t export c o n t r o l and i t s concomitant u n d e s i r a b l e domestic r epercus s ions f o r producing c o u n t r i e s . Southern producing c o u n t r i e s can t h e r e f o r e argue tha t i t would be i n consuming c o u n t r i e s ' d i r e c t s e l f - i n t e r e s t to c o n t r i b u t e to a l a r g e r b u f f e r s t o c k . As we noted e a r l i e r , the q u e s t i o n of b u f f e r s tock f i n a n c i n g came to a deadlock i n the 1970 n e g o t i a t i o n s . The main bone of c o n t e n t i o n , however, was the p r i n c i p l e of consumer c o n t r i b u t i o n to the b u f f e r s t o c k and b u f f e r s tock s i z e was not d i s cus sed to any l a r g e e x t e n t . At one s tage , hox^ever, the b u f f e r s tock manager was asked by the Indones ian delegate i f a b u f f e r s tock t w i c e the present s i z e would e l i m i n a t e the need f o r export c o n t r o l , to which the manager r e p l i e d that - 96 -i f export c o n t r o l were to t r u l y be an ins t rument of l a s t r e s o r t , the 21 b u f f e r s tock h o l d i n g s would have to be i n c r e a s e d . The Indones ian delegate d i d not pursue the p o i n t . There are two examples, n e v e r t h e l e s s , of producing c o u n t r i e s sugges t ing tha t a l a r g e r b u f f e r s tock i s i n the i n t r i n s i c i n t e r e s t of consumers. The T h a i de legate commented tha t one way of overcoming t i n shortages was to i n c r e a s e the b u f f e r s tock s i z e , and tha t " the consuming c o u n t r i e s can h e l p to defend the c e i l i n g by con-22 t r i b u t i n g to the f i n a n c i n g of the b u f f e r s t o c k " . The M a l a y s i a n d e l e -gate a l s o made a s i m i l a r sugges t ion a l though he f e l t tha t " t h e on ly t rue remedy" o f combating t i n shortage was to have " r e a l i s t i c and remunera-23 t i v e " p r i c e s . (This represent s an appeal to i n t r i n s i c i n t e r e s t w i t h respect to p r i c e b a r g a i n i n g . ) To my knowledge, there has r e a l l y been no thorough-going b a r -g a i n i n g s t r a t e g y used by Southern c o u n t r i e s i n arguing f o r a l a r g e r b u f f e r s t o c k . A d m i t t e d l y , t h e i r e f f o r t s have so f a r been main ly con-cerned w i t h e s t a b l i s h i n g the p r i n c i p l e of consumer p a r t i c i p a t i o n , and they perhaps f e e l tha t to pursue the q u e s t i o n o f a l a r g e r b u f f e r s tock before consumer p a r t i c i p a t i o n i s obta ined i n p r i n c i p l e i s premature. However, i f producers were to argue, as they have, tha t consumers shou ld c o n t r i b u t e to a b u f f e r s tock o f the present s i z e , they would be hard put to show what i n t r i n s i c i n t e r e s t t h i s c o u l d be to the consumers. T h i s e x p l a i n s why they have r e l i e d p r i m a r i l y on the a l t r u i s m and democracy approaches w i t h respect to the b u f f e r s tock i s s u e . Consumer c o n t r i b u -t i o n to a b u f f e r s t o c k of the present s i z e i s a l s o , i n a sense, more - 97 -appea l ing to producers because i t c o u l d reduce t h e i r c o n t r i b u t i o n s by h a l f , w h i l e c o n t r i b u t i o n to a b u f f e r s tock twice the present s i z e w i l l r e s u l t i n no r e d u c t i o n of t h e i r present c o n t r i b u t i o n s . On the q u e s t i o n of f i n a n c i a l burden, there i s room f o r produc ing c o u n t r i e s to b u t t r e s s t h i s b a r g a i n i n g s t r a t e g y w i t h the argument tha t consumer c o n t r i b u t i o n to the b u f f e r s tock w i l l on ly represent a r e l a t i -24 v e l y t i n y d r a i n on t h e i r r e s o u r c e s , as Rogers has shown. Assuming that consumers were to c o n t r i b u t e to a b u f f e r s tock twice the present s i z e , w i t h the p r i c e of t i n va lued at the f l o o r p r i c e of j t l , 2 8 0 per t o n , Rogers c a l c u l a t e d t h i s burden as presented i n Table X I I . For the h i g h e s t c o n t r i b u t o r s , Japan and U n i t e d Kingdom, the amount i s about $15.5 m i l l i o n . (This amount would be a p p r e c i a b l y reduced i f the US were to be a p a r t i c i -pant i n t i n agreements) . Th i s c o n t r i b u t i o n represented o n l y 0.02 per cent of the two c o u n t r i e s ' n a t i o n a l income, or about 4.8 per cent of t o t a l f o r e i g n a i d i n Japan's case and 1.9 per cent i n B r i t a i n ' s . The p e r c e n t -ages i n f a c t over-emphasise the burden of such c o n t r i b u t i o n s as they are not due a n n u a l l y but are p a i d i n i n s t a l m e n t s (two or more) over the d u r a t i o n of f i v e years — the p e r i o d of a t i n agreement. Perhaps , t h e n , a d i v i s i o n of the percentages by f i v e would be a more accura te assessment of burden . Th i s procedure (see f i g u r e s i n b ra cke t s i n t a b l e ) makes the c o n t r i b u t i o n s appear minuscu le . For example, Japan and B r i t a i n ' s con-t r i b u t i o n s as a percentage of f o r e i g n a i d would be only 0.57 per cent and 0.39 per cent r e s p e c t i v e l y , and as a percentage o f n a t i o n a l income, the f i g u r e i s 0.004 per cent f o r both c o u n t r i e s . -98 _ TABLE XII ASSUMED BURDEN OF CONSUMEES1 IN CONTRIBUTING TO THE TIN BUFFER STOCK Country Australia Austria Belgium-Luxembourg Canada Czechoslovakia Denmark France India Israel Italy Japan Korea Mexico Netherlands Spain Turkey U.K. Contributions Votes (US $ millions) 54 11 35 62 36 12 121 44 6 71 216 9 20 48 25 16 214 Total 1,000 3.9 0.8 2.5 4.5 2.6 0.9 8.7 3.2 0.4 5.1 15.5 0.6 1.4 3.5 1.8 1.2 15.4 72.0 Contributions as percent of aid 3.17 (0.63) 2 1.39 (0.28) 2.75 (0.55) 9.56 (1.91) 0.76 (0.15) 2.96 (0.59) 4.86 (0.57) 2.09 (0.42) 1.96 (0.39) Contributions as percent of Nat. Inc. 0.02 (0.004)2 0.01 (0.002) 0.01 (0.002) 0.01 (0.002) 0.01 (0.002) 0.01 (0.002) 0.01 (0.002) 0.02 (0.004) 0.01 (0.002) 0.02 (0.004) 0.03 (0.006) 0.01 (0.002) 0.02 (0.004) 0.02 (0.004) 0.02 (0.004) Consumers li s t e d are the participants of the 1965 Tin Agreement. 2 Figures in brackets (added) indicate a division of the percentage by five. See explanation in text. Source: Christopher D. Rogers, "Consumer Participation in International Tin Agreements", Malayan Economic Review, Vol. 14:2, Oct. 1969, p. 126. - 99 -Such an argument has n o t , to my knowledge, been used by Southern c o u n t r i e s i n t i n agreement n e g o t i a t i o n s , a l though there are constant re ferences by delegates that the consumers are a l s o the r i c h e r ones and should t h e r e f o r e c o n t r i b u t e to the b u f f e r s tock (the a l t r u i s m approach) . Perhaps , Southern delegates may j u s t have over looked the impact o f showing the major consuming c o u n t r i e s j u s t how r i c h they a r e . M o d i f y i n g the Opponent's Minimum D i s p o s i t i o n : As n o t e d , t h i s i n -v o l v e s arguing tha t the terms are more favourable to the opponent than he had o r i g i n a l l y thought . I f one succeeds i n c o n v i n c i n g the opponent tha t such was i n f a c t the case , he would have to re-assess h i s minimum d i s p o -s i t i o n s i n c e the terms he thought were the worst he was w i l l i n g to accept have now become " b e t t e r " . Th i s s t r a t e g y i s bes t used and i l l u s t r a t e d w i t h respect to p r i c e b a r g a i n i n g . We w i l l take consumer's minimum d i s -p o s i t i o n to be the h i g h e s t c e i l i n g and f l o o r p r i c e s that they are prepared to o f f e r producer s . The s t r a t e g y t h e r e f o r e e n t a i l s produc ing c o u n t r i e s a rguing t h a t the p r i c e range o f f e r e d by consumers i s f a r too f avourab le to consumers. The a b i l i t y of produc ing c o u n t r i e s to argue thus w i l l depend to a very l a r g e extent on the s p e c i f i c c o n d i t i o n s a f f e c t i n g t i n t rade and p r i c e a t the time of n e g o t i a t i o n or the c o n d i t i o n s f o r e c a s t f o r the p e r i o d o f agreement, i f t h i s c o u l d i n f a c t be assessed. A p a r t i c u l a r l y p r o p i t i o u s time to employ such a s t r a t e g y would be i n a p e r i o d of t i n shortage or impending shor tage . For i n such a p e r i o d , Southern produc ing c o u n t r i e s c o u l d argue t h a t the t i n p r i c e i s l i k e l y to r i s e h i g h e r than a c e i l i n g that consumers may have proposed. -100 -S i m i l a r l y , they c o u l d argue tha t the f l o o r p r i c e proposed i s u n r e a l i s -t i c a l l y low because the p r i c e cou ld h a r d l y f a l l to anywhere near tha t l e v e l . I n more o r d i n a r y t i m e s , Southern c o u n t r i e s may be ab le to base t h e i r b a r g a i n i n g on past r e c o r d that p r i c e ranges had been a r t i f i c i a l l y low. That i s the evidence? The r e c o r d i s i n c o n c l u s i v e . We saw i n the l a s t chapter tha t the p r i c e sank below the f l o o r i n 1959 under the F i r s t Agreement, and i t shot past the c e i l i n g twice i n 1963 and 1970; but as we po in ted out there are a number of reasons why the t i n agree-ments were unable to defend the range i n these i n s t a n c e s . Thus, r a t h e r than r e l y on past r e c o r d , Southern producers would be b e t t e r adv i sed to argue i n terms of impending market c o n d i t i o n s . There i s evidence tha t Southern produc ing c o u n t r i e s have employed t h i s s t r a t e g y i n t i n n e g o t i a t i o n s . I n the 1965 conference , bo th the B o l i v i a n and M a l a y s i a n delegates s a i d that the p r i c e range e s t a b l i s h e d 25 by the conference was " u n r e a l i s t i c " . The B o l i v i a n de legate hoped tha t dur ing the term of the agreement, i t would be p o s s i b l e to r e v i s e t i n 2 p r i c e s " t o adapt them to the p r e v a i l i n g s i t u a t i o n i n t h e w o r l d m a r k e t . " The M a l a y s i a n delegate was more e x p l i c i t , and warrants q uo t i ng at some l e n g t h . (His argument can a l s o be seen as an example of appea l ing to i n t r i n s i c i n t e r e s t i n p r i c e b a r g a i n i n g . ) My d e l e g a t i o n had proposed adopt ing a r e a l i s t i c approach to the p r i c e - r a n g e problem — t a k i n g ac-count o f the shortage o f t i n at present and i n the fo re seab le fu ture — by e s t a b l i s h i n g a h i g h e r f l o o r p r i c e tha t would h e l p p r o d u c t i o n to keep pace w i t h demand and by encouraging more i n t e n s i v e m i n i n g , He went on to say , - 101-. . . t h e consuming c o u n t r i e s have not demonstrated the unders tanding which had been hoped f o r ; i t appears tha t they are w i l l i n g to see demand o u t s t r i p supply and o f t e n to pay an exce s s ive p r i c e r a t h e r than p r o -v i d e an i n c e n t i v e f o r raining more meta l and thereby assure themselves of a reasonable p r i c e over a g iven p e r i o d . I t has been demonstrated that the present p r i c e range i s harmful to consumer and producer a l i k e and i s t o t a l l y u n r e a l i s t i c . Current market p r i c e s t e l l the same t a l e . ^ Another method of showing consumers that the terms are more favourable to them than to producers may be based on c e r t a i n more p e r -manent fea tures o f t i n t r a d e . Southern produc ing c o u n t r i e s c o u l d make a reasonably good case at most t imes tha t consuming c o u n t r i e s ' minimum d i s p o s i t i o n i s lower than what they make i t out to be , f o r the f o l l o w i n g two reasons : ( i ) t i n forms such a s m a l l percentage of t h e i r t o t a l t r a d e , and ( i i ) a l though i t c o n s t i t u t e s on ly a s m a l l i n p u t i n i n d u s t r i a l p r o -d u c t i o n , i t i s a f a i r l y v i t a l raw m a t e r i a l . In s h o r t , Southern producers cou ld t e l l consumers q u i t e s imply tha t they c o u l d and should pay much more f o r the t i n they buy, i n e f f e c t , c a l l i n g consumers' " b l u f f " tha t such and such a p r i c e was the worst terms consumers c o u l d accept . The danger of such a s t r a t e g y i s that "Southern producers may have i n f a c t mi sperce ived a genuine p o s i t i o n f o r a faked one. I t i s v i t a l , t h e r e f o r e , that producers know what the upper l i m i t of the t i n p r i c e i s f o r consumers. For want of a b e t t e r y a r d s t i c k , t h i s l i m i t would presumably be the p o i n t when s u b s t i t u t e s f o r t i n beg in to be used e x t e n s i v e l y as the t i n p r i c e r i s e s . Consumers have been known to c a u t i o n producers of the danger o f s u b s t i t u t e s , but the M a l a y s i a n delegate i n 1965 thought that s u b s t i t u t e s 28 f o r t i n was "an enemy that i s very remote, i f not n o n - e x i s t e n t . " We _ 102_ a l s o noted e a r l i e r tha t de sp i t e the scare o f the mid-1960's when p r i c e s soared to the upper l i m i t and many US i n d u s t r i e s were b e g i n n i n g to develop s u b s t i t u t e s , the demand f o r t i n has not d e c l i n e d to any degree. Taking a wide s l i c e of t i m e , the t i n p r i c e has c l imbed r a t h e r s t e a d i l y , i n d i c a t i n g a c o n t i n u i n g demand f o r the commodity. (See Appendix B) Thus, i t appears tha t Southern producers s t i l l have some mileage w i t h t h i s s t r a t e g y . E x p l a i n i n g away a m i s p e r c e p t i o n : T h i s i s b a s i c a l l y the method of p s y c h o a n a l y s i s : . . . y o u p o i n t out to the " p a t i e n t " that i t i s " n a t u r a l " f o r him to have the mis taken i d e a , because here i s how he happened to p i c k i t up, and here i s why he i s hanging on to i t . ™ A b a r g a i n i n g s t r a t e g y employing t h i s technique would t h e r e f o r e be based on the c o n d i t i o n that the opponent holds a mis taken b e l i e f about how c e r t a i n courses cf a c t i o n a f f e c t h i m , and tha t t h i s b e l i e f i s h e l d on so s t r o n g l y that i t o f t e n becomes a s e l f - f u l f i l l i n g prophecy. For my ex-ample, I w i l l take the widespread b e l i e f among Nor thern consuming coun-t r i e s tha t t i n agreements operate p r i m a r i l y i n the i n t e r e s t s of producers , which u s u a l l y leads them to argue that producers should t h e r e f o r e r i g h t l y be the ones b e a r i n g the cos t of b u f f e r s tock f i n a n c i n g . For i n s t a n c e , the US p o s i t i o n , premised on the i d e a that t i n agreements do not g ive s u f f i c i e n t p r o t e c t i o n to the c e i l i n g p r i c e and tha t the b u f f e r s tock 30 t h e r e f o r e operated i n producer s ' f a v o u r , i s a view shared , i f not ex-p l i c i t l y , at l e a s t i m p l i c i t l y , by the m a j o r i t y of consuming c o u n t r i e s . Perhaps what b e l i e s such an a t t i t u d e i s that consumers are n e v e r t h e l e s s - 1 0 3 -eager p a r t i c i p a n t s i n the opera t ions of t i n agreements, u n l e s s , l i k e the US, they have an enormous s t o c k p i l e to p r o t e c t themselves . There i s c e r t a i n l y no g a i n s a y i n g the f a c t tha t p roducer s , because they have a g rea te r s take i n t i n t r a d e , would thereby have a g rea te r i n t e r e s t i n t i n agreements, as has been argued throughout t h i s s t u d y . However, i t i s s t i l l c o n c e i v a b l e tha t the Nor thern p e r c e p t i o n of t h e i r gains from t i n agreements may be unduly p layed down, and p o s s i b l y d i s t o r t e d by constant emphasis of Southern gains from such agreements. The uncon-c ious " images" may be f u r t h e r r e i n f o r c e d by the f ac t tha t t i n c o n t r o l 31 schemes s t a r t e d out i n the pre-war days as c a r t e l s . I f t h i s p r o p o s i t i o n i s c o r r e c t , Southern produc ing c o u n t r i e s c o u l d attempt to e x p l a i n away such an image by showing consumers tha t they had i n f a c t mi sperce ived the r o l e of present-day t i n agreements. To imply tha t they they are s t i l l the t o o l s of producer governments to j a c k up the t i n p r i c e i s s imply not t r u e . F o r , i n the present-day t i n agreements, consumers have an equal say i n t h e i r opera t ions and terms. I f consumers f e e l that t i n agreements do not adequately operate i n t h e i r f avour , they had an equal v o i c e i n modi fy ing both the terms and opera t ions of such agreements. To my knowledge, there has been no r e a l use of the " e x p l a i n i n g away a m i s p e r c e p t i o n " s t r a t e g y . In the 1965 n e g o t i a t i o n s , the N i g e r i a n r e p r e s e n t a t i v e s a i d something vaguely resembl ing such a s t r a t e g y . He t a l k e d of a new p o s i t i v e view of commodity accords sug-g e s t i n g tha t they serve the i n t e r e s t s of a l l p a r t i c i p a n t s r a t h e r than -104 _ s e c t a r i a n i n t e r e s t s . J However, f o r the most p a r t , h i s statement a l l u d e d to the UNCTAD s p i r i t and i s probably more an example of the a l t r u i s m s t r a t e g y than the one enuncia ted h e r e . . I n f l u e n c i n g the Opponent's P e r c e p t i o n of One's U t i l i t y from an Outcome W hi le the prev ious category of s t r a t e g i e s were concerned w i t h i n f l u e n c i n g the opponent 's p e r c e p t i o n of h i s ga in from an outcome, the s t r a t e g y to be cons idered under t h i s heading i s concerned w i t h i n f l u e n c i n g the opponent 's p e r c e p t i o n o f one's ga in from an outcome. The s t r a t e g y to be cons idered i s based on the n o t i o n of "commitment", or " b i n d i n g o n e s e l f " , 33 or the more popular i d e a of " b u r n i n g b r i d g e s " . Success i n b a r g a i n i n g sometimes, depends on who commits h i m s e l f to a p o s i t i o n f i r s t . T h i s i s p a r t i c u l a r l y t rue f o r b a r g a i n i n g s i t u a t i o n s w i t h no s a d d l e p o i n t s , or s t a b l e s o l u t i o n s . Such " p u r e " b a r g a i n i n g , as S c h e l l i n g n o t e s , . . . r e s t s on the paradox that the power to c o n s t r a i n an adversary may depend on the power to b i n d o n e s e l f ; t h a t , i n b a r g a i n i n g , weakness i s o f t en s t r e n g t h ; freedom may be freedom to c a p i t u l a t e , and to burn br idge s beh ind one may s u f f i c e to undo an opponent.34 I n n o n - m i l i t a r i s t i c terms , S c h e l l i n g ' s i d e a suggests tha t one c o u l d f o r c e the opponent to r e -e s t imate one's minimum d i s p o s i t i o n by s t i c k i n g f i r m l y to a p o s i t i o n tha t the opponent may have thought was f l e x i b l e . The op-ponent, see ing that one w i l l not move, w i l l t h e r e f o r e have to a l t e r h i s own p o s i t i o n a c c o r d i n g l y — i f he b e l i e v e s tha t one means b u s i n e s s . The b u r n i n g b r i d g e s approach: The use of t h i s b a r g a i n i n g s t r a t e g y i s bes t i l l u s t r a t e d i n t i n n e g o t i a t i o n s i n terms of p r i c e b a r g a i n i n g . E s s e n t i a l l y , i t would e n t a i l producers demonstrat ing that they c o u l d not and w i l l not accept terms other than those they proposed. For example, -105 -Southern producers c o u l d argue tha t to go below a c e r t a i n p r i c e range would be tantamount to c o u r t i n g economic d i s a s t e r f o r themselves — many mines w i l l be c l o s e d , workers r e t r e n c h e d , export earnings w i l l plummet, b r i n g i n g i n i t s t i d e u n t o l d h a r d s h i p s . In a word , they w i l l not accept a lower p r i c e . Whatever the reasons advanced, the important p o i n t i s to convey the image o f unbending commitment to a p a r t i c u l a r p o s i t i o n , because the success of t h i s s t r a t e g y r e s t s u l t i m a t e l y on whether the op-ponent b e l i e v e s one or n o t . There are few examples of Southern producing c o u n t r i e s u s i n g such a b a r g a i n i n g s t r a t e g y i n t i n n e g o t i a t i o n s , a l though producers o f t en p o i n t out t h e i r dependence on t i n f o r t h e i r economic w e l l - b e i n g . However, more o f t en than n o t , they p o i n t out t h e i r dependence on t i n as a p o i n t o f departure f o r appea l ing to consumers' a l t r u i s m . This i s B o l i v i a ' s t y p i c a l b a r g a i n i n g p o s i t i o n , i t s de legates never f a i l i n g to p o i n t out tha t t h e i r country not on ly depended h e a v i l y on i t s earnings from t i n but tha t i t s p r o d u c t i o n cos t s were the h i g h e s t i n the w o r l d and i t s miners r e c e i v e d "bare subs i s t ence wages and worked under c o n d i t i o n s which represented a r e a l s a c r i f i c e . " I would suggest tha t such dependence on the commodity c o u l d w e l l be used as a p o i n t o f departure f o r demonstrat ing commitment as w e l l . U l t i m a t e l y , of c o u r s e , commitment may have to be demonstrated by the use of t h r e a t , as B o l i v i a and M a l a y s i a d i d a f t e r the 1965 nego-t i a t i o n s , when they s a i d they would not accede to the agreement. How-ever , the use of t h r e a t i n v o l v e s , perhaps , a q u a l i t a t i v e change of s t r a t e g y f o r i t not on ly i n v o l v e s changing the opponent's p e r c e p t i o n of one's g a i n , _106 _ i t a l s o presents him w i t h a p o s s i b i l i t y of a r e a l l o s s as w e l l . P r o m i s i n g the Opponent a Rea l Gain from an Outcome Promises are c o n d i t i o n a l statements of the t y p e , " I w i l l (or won ' t ) do t h i s i f you do (or d o n ' t do) t h a t . " When one makes a promise i n b a r g a i n i n g , one i s t e l l i n g the o ther p a r t y tha t one w i l l do something favourab le toward i t , i f i t does something i n one's f a v o u r . I t should be immediately apparent tha t promises appeal to s e l f - i n t e r e s t l i k e most b a r g a i n i n g s t r a t e g i e s . However, u n l i k e the ones cons idered so f a r , the appeal i s i n d i r e c t , or c o n d i t i o n a l , i . e . , i t i s based on a q u i d pro quo. I n one sense, promises go beyond merely mod i fy ing the u t i l i t y or s a t i s f a c t i o n of the o t h e r p a r t y from an outcome; they i n v o l v e p r e s e n t i n g the opponent w i t h new a l t e r n a t i v e s which a l t e r the nature of the outcome. I w i l l cons ider promises used as a b a r g a i n i n g s t r a t e g y f i r s t i n terms of q u i d pro quos o f f e r e d i n the same i s s u e - a r e a , i . e . , matters p e r t a i n i n g s o l e l y to t i n agreements and t i n t r a d e , and second, i n o ther i s s u e - a r e a s , i . e . , matters s t r i c t l y o u t s i d e the p r o v i n c e of t i n agreements. P r o m i s i n g reward i n the same i s s u e - a r e a : When one makes a promise , one, i n e f f e c t , s ays : " I f you do t h i s , I w i l l do something you l i k e . " Southern producing c o u n t r i e s c o u l d w e l l use such a s t r a t e g y i n p r i c e b a r g a i n i n g . For example, i n exchange f o r a h i g h p r i c e range, or one tha t i s more than the consumers' minimum d i s p o s i t i o n , producers could o f f e r to take a number of measures to ensure adequate s u p p l i e s to consumers. Such a s t r a t e g y would be p a r t i c u l a r l y germane i n a p e r i o d of impending shor tage . - 1 0 7 ' -There i s some evidence tha t produc ing c o u n t r i e s have employed such a b a r g a i n i n g s t r a t e g y , going by some of the statements of Southern 37 de lega te s . The M a l a y s i a n d e l e g a t e , f o r example, argued t h a t i f con-sumers had agreed to a h i g h e r f l o o r p r i c e , t h i s would have he lped p r o -d u c t i o n keep pace w i t h demand. However, as noted e a r l i e r , t h i s may be more i n the na ture of an appeal to i n t r i n s i c ( d i r e c t ) i n t e r e s t r a t h e r than one i n which a p o s i t i v e q u i d pro quo was o f f e r e d . The main d i f -f i c u l t y w i t h t h i s s t r a t e g y i s c r e d i b i l i t y . I t i s d o u b t f u l that producers could r e a l l y promise tha t adequate s u p p l i e s c o u l d be met at a l l t i m e s , g iven the i n e l a s t i c na ture of the supply of t i n . Thus, there are obvious l i m i t s on the use of such a s t r a t e g y i n p r i c e b a r g a i n i n g . Promi s ing reward i n o ther i s s u e - a r e a s : L i k e the prev ious s t r a t e g y , p o s i t i v e t r a d e - o f f s are r e q u i r e d h e r e , except , i n t h i s s t r a t e g y , promises of reward are made f o r matters s t r i c t l y o u t s i d e the purview of t i n agree-ments and t i n t r a d e . There are a v a r i e t y o f b e n e f i t s , Southern producing c o u n t r i e s c o u l d o f f e r Nor thern consuming c o u n t r i e s i n exchange f o r a h i g h e r p r i c e range. These inc lude reduc ing t a r i f f s on v a r i o u s products that Nor thern consuming c o u n t r i e s may e x p o r t , i n c r e a s i n g o r improving investment o p p o r t u n i t i e s f o r Nor thern c o u n t r i e s which have o ther i n t e r e s t s bes ides t i n , i n c r e a s i n g responsiveness toward m i l i t a r y and defense a r r a n -gements f o r Nor thern c o u n t r i e s and so f o r t h . Many such courses of a c t i o n are perhaps more f e a s i b l e i n b i l a t e r a l b a r g a i n i n g than i n m u l t i l a t e r a l s i t u a t i o n s such as t i n n e g o t i a t i o n s . In order to be c r e d i b l e i n t i n n e g o t i a t i o n s , such courses of a c t i o n must be ab le to d i s t r i b u t e b e n e f i t - 108 -more or l e s s e q u a l l y among a l l consuming c o u n t r i e s . I n s h o r t , one has to be wary that i n p l e a s i n g a U n i t e d Kingdom, one does not a l i e n a t e a S o v i e t U n i o n , or any of the o ther consumers f o r that m a t t e r . Never-t h e l e s s , i t may be p o s s i b l e f o r Southern producers to c u l t i v a t e , on a b i l a t e r a l b a s i s , responsiveness w i t h major consumers by employing t a c t i c s such as the above, w i t h the hope t h a t these c o u n t r i e s may r e c i p r o c a t e by b e i n g re spons ive to Southern demands i n t i n agreements. I know no i n s t a n c e of the use of such a s t r a t e g y , but examples would by nature be d i f f i c u l t to l o c a t e s i n c e t a c i t r e c i p r o c i t y i s i n -v o l v e d , not e x p l i c i t q u i d pro quos. Threatening the Opponent w i t h a Rea l Loss from an Outcome T h r e a t s , l i k e promises , are c o n d i t i o n a l statements of the t y p e , " I w i l l (or won ' t ) do t h i s i f you do (or d o n ' t do) t h a t " . U n l i k e making a promise , however, the t h r e a t e n i n g p a r t y says to the o ther p a r t y tha t he would do something unfavourable to i t i f i t does not do something tha t the threa tener wants done. Threats and promises are t h e r e f o r e l o g i c a l l y s i m i l a r i n that a q u i d pro quo i s i n v o l v e d , except tha t i n a t h r e a t , i n s t e a d of a t tempt ing to i n c r e a s e the o ther p a r t y ' s c h o i c e , one attempts to c i r c u m s c r i b e i t . A g a i n , as w i t h promises , one cou ld t h r e a t e n a c t i o n i n the i s s u e - a r e a i n which b a r g a i n i n g o c c u r s , or i n o ther n o n - r e l a t e d i s s u e - a r e a s . Threa ten ing d e p r i v a t i o n i n the same i s s u e - a r e a : I n b a r g a i n i n g , employing a t h r e a t i s s a y i n g to the opponent: " I f you d o n ' t do t h i s , I w i l l do something you won' t l i k e . " A g a i n , such a s t r a t e g y i s best i l l u s t r a t e d w i t h respect to p r i c e b a r g a i n i n g . There are a number of - 1 0 9 -a c t i o n s Southern c o u n t r i e s c o u l d t h r e a t e n i n t i n n e g o t i a t i o n s . The most obvious i s to t h r e a t e n "no agreement". As we have argued through-out t h i s s t u d y , t i n agreements are of g rea ter b e n e f i t to producers than consumers, so to threa ten "no agreement" may perhaps be c u t t i n g o f f one ' s note to s p i t e one's face — i n s h o r t , the t h r e a t may not be c r e d i b l e . However, w h i l e i t may be t rue tha t consumers have a r e l a t i v e l y l e s s e r i n t e r e s t i n t i n agreements, there i s , n e v e r t h e l e s s , an i n t e r e s t . We noted , f o r example, that t i n i s a v i t a l i n p u t i n i n d u s t r i a l p r o d u c t i o n . Moreover , i f there were no t i n agreements, producers may w e l l r e v e r t to the c a r t e l - l i k e arrangements of the p a s t . Th i s would not be too d i f -f i c u l t , c o n s i d e r i n g tha t a s m a l l number of c o u n t r i e s , s i x , to be e x ac t , produce some n i n e t y per cent of a l l the w o r l d ' s t i n . As such , the t h r e a t of "no agreement" may prove to be c r e d i b l e a f t e r a l l . I n f a c t , B o l i v i a and M a l a y s i a d i d not employ such a t h r e a t , f o l -lowing the 1965 n e g o t i a t i o n s . B o l i v i a threatened to withdraw from the agreement i f a h i g h e r p r i c e range were not f i x e d , w h i l e M a l a y s i a , f o r the same reason , s a i d i t would not s i g n the agreement. Had, bo th or e i t h e r of these c o u n t r i e s made good t h e i r t h r e a t , there c o u l d have been no t i n agreement, g iven B o l i v i a and M a l a y s i a ' s preponderance of votes (based on t h e i r export s ) on the T i n C o u n c i l . Both these c o u n t r i e s , however, withdrexj t h e i r t h r e a t s , M a l a y s i a , "out of deference to the wishes of M a l a y s i a ' s f r i e n d s , T h a i l a n d , N i g e r i a , B o l i v i a and o ther t i n producing c o u n t r i e s , and i n the s p i r i t of i n t e r n a t i o n a l coopera t ion and g o o d w i l l . " The M a l a y s i a n government appeared to be p r e t t y s e r i o u s i n _ 110 _ i t s t h r e a t not to s i g n the agreement, the Prime M i n i s t e r p r o c l a i m i n g at one stage t h a t , i f nece s sa ry , h i s country would b u i l d i t s own s t o c k p i l e 39 of t i n to p r o t e c t " t h e n a t i o n a l i n t e r e s t " . The immediate q u i d pro quo appeared to be a demand that the p r i c e range M a l a y s i a proposed at the conference be e s t a b l i s h e d . I t was n o t , however, u n t i l the subsequent C o u n c i l meeting h e l d , f o l l o w i n g M a l a y s i a ' s q u i c k v o l t e - f a c e , tha t the consuming c o u n t r i e s conceded to a h i g h e r p r i c e r a n g e . ^ I t seems odd tha t a t h r e a t was made and withdrawn be fore the concess ion sought was made, b u t , q u i t e p o s s i b l y , promises to r e c o n s i d e r the p r i c e range must have been e x t r a c t e d from the major consumers be fore the t h r e a t was wi thdrawn. Although the p r i c e range was r a i s e d from j [ l , 000 and j £ l , 2 0 0 to j £ l , 1 0 0 and i l , 4 0 0 per ton which represents a s u b s t a n t i a l i n c r e a s e , i t i s not known what the a c t u a l ranges proposed by M a l a y s i a o r B o l i v i a were . At any r a t e , one may say that the use of t h r e a t i n t h i s i n s t a n c e had the d e s i r e d impact on consuming c o u n t r i e s , and, i n t h i s sense, was s u c c e s s f u l -l y executed. The B o l i v i a n - M a l a y s i a n episode i s a l s o an example of the commitment or b u r n i n g br idge s s t r a t e g y , or more c o r r e c t l y , the use of t h r e a t i n such a s t r a t e g y . The l o g i c a l p r o g r e s s i o n from a t h r e a t of "no agreement" i s a t h r e a t to form a t i n c a r t e l , w h i c h , i n t u r n , could l ead to the l o g i c a l p o s s i b i l i t y of t h r e a t e n i n g to cut o f f a l l exports to consumers, each of these p o s s i b i l i t i e s r e p r e s e n t i n g i n c r e a s i n g s e v e r i t y of the t h r e a t used. In the f i n a l a n a l y s i s , the use of t h r e a t s must be premised on c r e d i b i l i t y . Besides the t h r e a t of "no agreement", which i n M a l a y s i a ' s case was b u t -t re s sed by the expressed i n t e n t i o n to b u i l d i t s own s t o c k p i l e , n e i t h e r - I l l -the t h r e a t to form a t i n c a r t e l nor to cut o f f exports have been employed by producing c o u n t r i e s . C u t t i n g o f f export s to consumers i s c l e a r l y not a v i a b l e t h r e a t , g iven that producers are so dependent on the earnings from t i n e x p o r t s . The format ion of a t i n c a r t e l , on the o ther hand, demands that producers act i n c o n c e r t , a l t h o u g h , as I have argued, t h i s i s not an i m p o s s i b i l i t y . Southern producers have a l s o been known to use t h r e a t s on the other end of the continuum of s e v e r i t y . By t h i s , I mean t h r e a t s of a " m i l d " form and p a r t i c u l a r l y w i t h respect to the b u f f e r s tock i s s u e . In the p r o t r a c t e d debate over b u f f e r s tock f i n a n c i n g i n the 1970 nego-t i a t i o n s , there was an attempt by the producers to deny consumers a 41 v o i c e i n the matter of borrowing by the b u f f e r s t o c k . They argued that consumers should have no r i g h t i n d e c i d i n g such matters i f they would not c o n t r i b u t e to the b u f f e r s t o c k . For example, the B o l i v i a r e p -r e s e n t a t i v e remarked, Some c o u n t r i e s have i n d i c a t e d t h e i r o p p o s i t i o n , on grounds of p r i n c i p l e , to c o n t r i b u t e to the b u f f e r s t o c k . S i m i l a r l y , my country cons ider s on grounds of p r i n c i p l e that on ly those c o u n t r i e s x^hich have c o n t r i b u t e d to the b u f f e r s tock have the r i g h t to ^ l a y down r u l e s i n regard to b u f f e r s tock b o r r o w i n g - . S i m i l a r l y , the Indones ian delegate thought tha t i f produc ing c o u n t r i e s alone were to c o n t r i b u t e to the b u f f e r s tock and bear the r e s p o n s i b i l i t y f o r borrowing by the s t o c k , he saw no reason why the consuming c o u n t r i e s 43 i n s i s t e d on t a k i n g p a r t i n the dec i s ion-making proce s s . Needless to say, the consumers ob jec ted to such attempts to depr ive them of d e c i s i o n -making power, and, as i t i n v a r i a b l y happens i n dead locks , the e x i s t i n g terms p r e v a i l e d — a d i s t r i b u t e d t w o - t h i r d s m a j o r i t y i s s t i l l r e q u i r e d _ 112 _ to make such bor rowings . (See Appendix A , A r t i c l e 24.) Threa ten ing d e p r i v a t i o n i n o ther i s s u e - a r e a s : As i n the case of promises , such a c t i o n r e q u i r e s that one moves o u t s i d e the p r o v i n c e o f t i n agreements and t i n t rade proper . The d e p r i v a t i o n s tha t Southern producing c o u n t r i e s may t h r e a t e n range from r a i s i n g t a r i f f s on the goods of consuming c o u n t r i e s (of t i n a c c o r d s ) , imposing s t r i n g e n t laws and procedures f o r those consumers who may have investment i n t e r e s t s i n produc ing c o u n t r i e s , through to b r e a k i n g d i p l o m a t i c and/or m i l i t a r y t i e s . These t a c t i c s a r e , a g a i n , up aga ins t the problem of c r e d i b i l i t y as w i t h the use of promises i n such i s s u e - a r e a s . I n f a c t , c r e d i b i l i t y i s a more s e r i o u s bus ines s when t h r e a t s are i n v o l v e d ; i f they are not commensurate w i t h the q u i d pro  quo demanded, they may w e l l tempt r e t a l i a t i o n , and, needless to s ay , i n a t a r i f f war , f o r example, Southern producing c o u n t r i e s w i l l h a r d l y be a match f o r t h e i r Nor thern a d v e r s a r i e s . I t i s c o n c e i v a b l e , n e v e r t h e l e s s , t h a t i n c e r t a i n s p e c i f i c cases , b i l a t e r a l t h r e a t s may have the d e s i r e d e f f e c t s , i f employed w a r i l y . To take a h y p o t h e t i c a l example, supposing B r i t a i n , d u r i n g a t i n conference , took a p o s i t i o n tha t was very unfavourable toward producer s . I t may be p o s s i b l e i n such a s i t u a t i o n f o r M a l a y s i a and N i g e r i a , f o r example, to threa ten B r i t a i n p r i v a t e l y w i t h a w i t h d r a w a l of B r i t i s h Commonwealth preferences i n t r a d e , or w i t h c e r t a i n measures unfavourable toward B r i t i s h investment i n t e r e s t s i n these two c o u n t r i e s . The example, i s , of course , p u r e l y h y p o t h e t i c a l , but who i s to say that p r i v a t e t h r e a t s such as these are never employed. I n the t i n n e g o t i a t i o n s examined, - 113 _ however, there was no evidence or even a h i n t tha t t h r e a t s o u t s i d e the t i n i s s u e - a r e a were ever employed. P r e s e n t i n g the Opponent w i t h a Rea l Change i n H i s U t i l i t y from an Outcome When one t e l l s the opponent, " I have done t h i s , so you can now on ly do the f o l l o w i n g " , one i s , i n e f f e c t , p r e s e n t i n g the opponent w i t h a r e a l change i n h i s u t i l i t y from an outcome. Such i s the nature of the f a i t  a c c o m p l i , whether the opponent l i k e s i t or n o t , he cannot a l t e r the s i t -u a t i o n . The f a i t accompl i i s t h e r e f o r e q u a l i t a t i v e l y d i f f e r e n t from the promise o r t h r e a t , f o r w h i l e the l a t t e r are c o n d i t i o n a l i n n a t u r e , i t i s pre-emptory i n n a t u r e . ^ U n l i k e the promise which attempts to c i r c u m -s c r i b e i t , the f a i t accompl i a c t u a l l y reduces c h o i c e . In t h i s sense t h e n , i t i s the " h a r d e s t " type o f b a r g a i n i n g technique to be c o n s i d e r e d . P r e s e n t i n g f a i t s a c c o m p l i s : The f a i t accompl i i s d i f f i c u l t to employ i n t i n n e g o t i a t i o n s because the sub jec t of n e g o t i a t i o n , p r i c e , i s such an ephemeral phenomenon, tha t i s , producers c o u l d not t e l l consumers that they have f i x e d such and such a p r i c e range and tha t there i s n o t h i n g the l a t t e r can do about i t . However, producers c o u l d c o n c e i v a b l y c a r r y out c e r t a i n a c t i o n s . o n the domestic f r o n t which may be something a k i n to the f a i t a c c o m p l i . For example, they c o u l d say t h a t t i n p r o d u c t i o n has been curbed because of a programme of export d i v e r s i f i c a t i o n , o r that a number of t i n mines had been plagued by pro longed s t r i k e s , the l o g i c of which would be to convey to consumers tha t there w i l l be an impending shortage that w i l l make the m a i n t a i n i n g of a p r i c e range below a c e r t a i n l e v e l i m p o s s i b l e . I n p r a c t i c e , however, such pronouncements may not be -114- -accepted as f a i t s a c c o m p l i s , t h a t i s , i t i s d o u b t f u l i f consumers w i l l take them at face v a l u e , and w i l l t h e r e f o r e remain hope fu l tha t the b u f f e r s tock mechanism w i l l s t i l l be ab le to cope w i t h the a l l e g e d shortage tha t producers f o r e c a s t . We saw how the M a l a y s i a n delegate at the 1965 n e g o t i a t i o n s lamented h i s f a i l u r e to convince consumers of an impending t i n shor tage . Al though the B o l i v i a n delegates c o n s i s t e n t l y a l l u d e to the f ac t of t h e i r c o u n t r y ' s h i g h cost of p r o d u c t i o n and the d i f f i c u l t y of mining t i n i n that c o u n t r y , I know no example of a produc ing country a c t u a l l y s t a t i n g i n t i n n e g o t i a t i o n s that p r o d u c t i o n had been curbed as a cons-c ious government p o l i c y and t h a t consumers had no cho ice but to f i x the p r i c e range at a c e r t a i n l e v e l . Perhaps , the nature of the f a i t accompl i i s such tha t i t d i scourages usage. As Sawyer and Guetzkow n o t e , The pre-emptory nature of the f a i t accompl i may to such an extent antagonise i t s t a r g e t . . . that p u n i s h i n g the o ther (even at one ' s own l o s s ) becomes a t t r a c t i v e — i f o n l y to d i scourage r e p e t i t i o n . 4 ^ Assessment and Recommendations Having gone through the gamut o f b a r g a i n i n g s t r a t e g i e s t h a t Southern produc ing c o u n t r i e s have employed and c o u l d employ i n t i n n e g o t i a t i o n s , the ta sk remains to assess the e f f i c a c y of these s t r a t e g i e s and to make some recommendations about t h e i r f u t u r e usage. Of the seven groups o f b a r g a i n i n g s t r a t e g i e s examined, the overwhelming impres s ion i s tha t Southern c o u n t r i e s r e l y most h e a v i l y on s t r a t e g i e s of normative ap-p e a l , which were based on persuading the o ther p a r t y o f the normative v a l u e of c e r t a i n courses of a c t i o n . In p a r t i c u l a r , the a l t r u i s m and _ ,115 -democracy approaches were most p o p u l a r . C l e a r l y , t h i s heavy r e l i a n c e on such s t r a t e g i e s i s a d i r e c t r e f l e c t i o n of the impact of the "UNCTAD Movement". The t h i r d group of s t r a t e g i e s , and s p e c i f i c a l l y , the appeal to i n t r i n s i c i n t e r e s t , i s perhaps the next most used. There was one major example o f the use of t h r e a t , w h i l e the o ther s t r a t e g i e s o u t l i n e d were c h a r a c t e r i s e d by a genera l d i r t h of examples. I would h e s i t a t e to suggest , however, t h a t they have never o r seldom been used. The l a c k o f examples i s i n l a r g e par t due to the genera l u n a v a i l a b i l i t y of secondary m a t e r i a l on t i n n e g o t i a t i o n s and the low p u b l i c i t y that the sub jec t g e n e r a l l y commands i n i n t e r n a t i o n a l a f f a i r s . How e f f e c t i v e have Southern b a r g a i n i n g s t r a t e g i e s been? I would suggest that they have not been very e f f e c t i v e . F o l l o w i n g UNCTAD I when Southern e s p r i t de corps was roused to a peak, i n t e n s i v e use of the a l t r u i s m and democracy approaches l e d to two " s i g n i f i c a n t " a d d i t i o n s to the o b j e c t i v e s of t i n agreements — that aimed at i n c r e a s i n g the export earnings of Southern producer s , and tha t r e l a t i n g to the d i s p o s a l of non-commercial s t o c k s . However, these two new o b j e c t i v e s d i d not a l t e r the opera t ions of t i n agreements to any e x t e n t . The most urgent i s s u e w i t h respect to such opera t ions — b u f f e r s tock c o n t r i b u t i o n s — remains u n r e s o l v e d , w i t h Southern c o u n t r i e s s t i l l hav ing to bear the brunt of f i n a n c i n g the s t o c k . A l b e i t , some f a c i l i t i e s of the IMF w i l l now be made a v a i l a b l e to them. A d m i t t e d l y , the c h i e f concern o f t i n agreements i s the q u e s t i o n of p r i c e . Have Southern c o u n t r i e s , t h e n , been ab le to o b t a i n " r emunera t ive " p r i c e s ? I f upward p r i c e r e v i s i o n s i n d i c a t e - 1 1 & -a n y t h i n g , one would be. l ed to b e l i e v e tha t Southern producers have, indeed , had a "good d e a l " . To da te , there i s y e t to be a downward r e v i s i o n of the p r i c e range. However, such assessment i s f a r too gros s . The f ac t that p r i c e r e v i s i o n s have always been upward may merely r e f l e c t the steady growing demand f o r the meta l i n the w o r l d market i n g e n e r a l , and i s more a f u n c t i o n of u n d e r l y i n g market forces r a t h e r than the b a r g a i n i n g s k i l l s of Southern produc ing c o u n t r i e s . Indeed, i n the 1965 n e g o t i a t i o n s , there was deep d i s s a t i s f a c t i o n w i t h the p r i c e range f i x e d , to the extent tha t the two major producers were w i l l i n g , or so they t h r e a t e n e d , to withdraw from the agreement. W h i l e the use of t h r e a t was s u c c e s s f u l i n tha t i n s t a n c e , I would not go to on to suggest that Southern producers have been eminent ly s u c c e s s f u l i n o b t a i n i n g the p r i c e ranges tha t they want. However, one p o i n t i s c l e a r w i t h re spec t to the p r i c e g o a l ; Southern produc ing c o u n t r i e s are s t i l l b e t t e r o f f w i t h t i n agreements than w i t h o u t them, unles s they can act together to form a c a r t e l - l i k e p roducer s ' c l u b . A l l i n a l l , t i n agree-ments are q u i t e e f f e c t i v e i n c o n t r o l l i n g the f l o o r p r i c e , w h i c h , u l t i -mately i s the c h i e f concern of produc ing c o u n t r i e s . C l e a r l y not a l l the s t r a t e g i e s o u t l i n e d are mutua l ly a p p l i c a b l e and some are p o s s i b l e on ly under c e r t a i n c o n d i t i o n s and c i r c u m s t a n c e s , which were s p e c i f i e d when each o f the s t r a t e g i e s was d e s c r i b e d and i l -l u s t r a t e d . On the q u e s t i o n of mutual a p p l i c a b i l i t y , the f i r s t group o f s t r a t e g i e s i s c l e a r l y based on d i f f e r e n t r a t i o n a l e s than those that employ t h r e a t s or f a i t s a c c o m p l i s , f o r example. One c o u l d h a r d l y pretend -117: -to be a p e r m i s s i v e t h e r a p i s t and t h r e a t e n the opponent at the same t i m e . How, t h e n , would the b a r g a i n i n g s t r a t e g i s t p r e s c r i b e ? I n the f i n a l a n a l y s i s , p r e s c r i p t i o n w i l l be based not only on expediency but on moral c o n s i d e r a t i o n s , as w e l l . For my p a r t , I would not h e s i t a t e to urge tha t a l l s t r a t e g i e s of normative appeal be exhausted before one r e s o r t s to the harder b a r g a i n i n g s t r a t e g i e s . In any case , there i s no g a i n s a y i n g the employment of the f i r s t category o f s t r a t e g i e s s i n c e , i n a r e a l sense, they harm no one, whether i t be o n e s e l f or the opponent. However, as one approaches the harder s t r a t e g i e s , the r i s k of i n j u r y to o n e s e l f and the opponent becomes g r e a t e r . A g a i n , how one p r e s c r i b e s u l t i m a t e l y r e s t s on one ' s p e r c e p t i o n of the s i t u a t i o n as w e l l as one's moral po-s i t i o n . Le t me, t h e r e f o r e , o f f e r one such l i n e of p r e s c r i p t i o n — from a. p e r c e p t i o n of the s i t u a t i o n , and from one moral s t a n d p o i n t . There are three main i s sue s that Southern produc ing c o u n t r i e s are concerned w i t h i n t i n agreements — p r i c e , b u f f e r s t o c k c o n t r i b u t i o n s , and n o n - p a r t i c i p a t i o n of major consumers l i k e the US and West Germany. On the l a s t two i s s u e s , Southern c o u n t r i e s are perhaps l i m i t e d to the s o f t e r b a r g a i n i n g s t r a t e g i e s , because, u l t i m a t e l y , the d e c i s i o n to con-t r i b u t e to the b u f f e r s tock o r p a r t i c i p a t e i n t i n agreements r e s t s w i t h the consumers. Here the appeal to a l t r u i s m and democrat ic norms must remain important b a r g a i n i n g s t r a t e g i e s . I would suggest , f u r t h e r , tha t the o ther s t r a t e g y of normative appeal — promoting empathy — should be used to supplement the f i r s t two approaches. To my knowledge, i t has been l i t t l e used. I n a d d i t i o n , I t h i n k Southern c o u n t r i e s should not _ ,118 _ forge t the t i m e - t e s t e d appeal to i n t r i n s i c i n t e r e s t , which c o u l d be brought to bear e s p e c i a l l y p o t e n t l y i n regard to the b u f f e r s tock i s s u e . My i m -p r e s s i o n i s tha t Southern c o u n t r i e s have n e g l e c t e d t h i s s t r a t e g y i n the f l o o d of enthusiasm crea ted by UNCTAD. On the q u e s t i o n of p r i c e b a r g a i n i n g , I t h i n k there i s g rea te r room f o r the harder s t r a t e g i e s . Aga in there i s too much r e l i a n c e so f a r on the a l t r u i s m and democracy approaches here as w e l l . I would suggest that more a t t e n t i o n should be p a i d to the commitment or " b u r n i n g b r i d g e s " ap-proach , w h i c h , i f need be , should be b u t t r e s s e d by c r e d i b l e t h r e a t s . We saw tha t i n the M a l a y s i a n - B o l i v i a n episode — u n f o r t u n a t e l y the on ly ex-ample we have — tha t the t h r e a t of "no agreement" proved to be s u f f i -c i e n t l y c r e d i b l e . Threats across i s s u e - a r e a s , however, may not be c r e d i b l e . To use another of I k l e and L e i t e s ' terms, there may e x i s t 46 c e r t a i n " n e g o t i a t i o n mores" i n b a r g a i n i n g betx^een b a s i c a l l y f r i e n d l y 47 p a r t i e s tha t c i r c u m s c r i b e the use of t h r e a t s across i s s u e - a r e a s . But i t may be p o i n t e d out tha t c r e d i b i l i t y would depend on the magnitude and s e v e r i t y o f the t h r e a t . Whi le t h i s may be t r u e , how does one decide i n t h r e a t s across i s s u e - a r e a s , what i s severe and what i s not? Perhaps we would be w e l l advi sed to take note of S c h e l l i n g ' s n o t i o n o f " p r o m i -nence" (a l though he used i t i n a d i f f e r e n t c o n t e x t ) . As he p o i n t e d o u t , what cou ld have been more unambiguous f o r the b e l l i g e r e n t s i n the Second World War than to t a c i t l y agree on "No Gas" as they were d e c i d i n g on the range and scope of weapons to be used. Perhaps , i n a s i m i l a r sense , "No Agreement" i s the u l t i m a t e t h r e a t tha t c o u l d be employed i n t i n - 119 -n e g o t i a t i o n s because o ther t h r e a t s may not be so c l e a r l y unambiguous. Southern producing c o u n t r i e s , to my mind, w i l l be l e s s ab le to employ s t r a t e g i e s based on promises and f a i t s accomplis i n t i n n e g o t i a t i o n s . Given the s t r u c t u r a l c h a r a c t e r i s t i c s of t i n p r o d u c t i o n and t i n t r a d e , promises may be d i f f i c u l t to f u l f i l l and f a i t s accomplis even harder to c a r r y o u t . Th i s makes them f a u l t bad ly on the q u e s t i o n of c r e d i -b i l i t y , which i s a l l - i m p o r t a n t i n b a r g a i n i n g . To sum up, Southern c o u n t r i e s have t y p i c a l l y r e l i e d on b a r g a i n i n g s t r a t e g i e s based on the UNCTAD ethos and would t h e r e f o r e be w e l l adv i sed to t u r n more to o ther s t r a t e g i e s of normative and i n t r i n s i c appea l . I n regard to p r i c e b a r g a i n i n g , they c o u l d be c o n s i d e r a b l y more e f f e c t i v e by showing s t r o n g commitment to b a r g a i n i n g p o s i t i o n s , and, i f need b e , to demonstrate t h i s by t h r e a t e n i n g "no agreement". Some Concluding Observat ions By way of c o n c l u s i o n , I would l i k e to t u r n to the broader ques t ions w i t h which t h i s study s t a r t e d out to examine — namely, the dynamics of North-South i n t e r a c t i o n s i n the t rade i s s u e - a r e a . I t should be empha-s i s e d tha t the study was l e s s concerned w i t h d e r i v i n g e m p i r i c a l p r o p o s i -t i o n s about the dynamics o f Nor th-South t rade i n t e r a c t i o n s than w i t h e x p l o r i n g i n a l i b e r a l and h e u r i s t i c manner the range of b a r g a i n i n g s t r a t e g i e s tha t are a v a i l a b l e to Southern c o u n t r i e s i n one sub- i s sue-a rea o f Nor th-South t rade r e l a t i o n s . N e v e r t h e l e s s , l e t me venture a few p r e -l i m i n a r y observa t ions about the nature of Southern b a r g a i n i n g i n t i n n e g o t i a t i o n s , w i t h a view that these may serve as p o s s i b l e f o c i f o r -. 120 -fu ture i n v e s t i g a t i o n i n the same area and a l s o w i t h re spect to b a r g a i n i n g i n o ther commodity agreements and i s sue-areas of North-South t r a d e . Observa t ion 1: Southern b a r g a i n i n g tends to cent re around a narrow range of b a r g a i n i n g s t r a t e g i e s t y p i c a l l y based on the ethos created by UNCTAD of the need f o r an economica l ly more e q u i t a b l e w o r l d . (As noted e a r l i e r , t h i s o b s e r v a t i o n may be more apparent than r e a l because of low p u b l i c i t y and g e n e r a l l a c k o f m a t e r i a l s on n e g o t i a t i o n i n t i n agreements.) Observa t ion 2 : Southern b a r g a i n i n g has tended to be more v i g o r o u s , though not n e c e s s a r i l y more c r e a t i v e f o l l o w i n g UNCTAD. Observa t ion 3: In s p i t e o f Observa t ion 2 , Southern b a r g a i n i n g has not changed i n any s i g n i f i c a n t sense the terms and e s p e c i a l l y the opera-t i o n s o f t i n agreements. Observa t ion 4: Southern b a r g a i n i n g , as a r u l e , tends to r e l y more h e a v i l y on " s o f t " s t r a t e g i e s r a t h e r than the " h a r d " s t r a t e g i e s . Observat ion 5 : There appears to be an absence of the use of t h r e a t s (or promises) across i s s u e - a r e a s . Observa t ion 6: I n g e n e r a l , there i s l i t t l e use of t h r e a t s . Observa t ion 7 : The above three observa t ions may be due to ( i ) the r e s t r a i n i n g e f f e c t of n e g o t i a t i o n mores on the use of the hard b a r -g a i n i n g s t r a t e g i e s and/or ( i i ) Southern r e a l i z a t i o n of i t s heavy s take and g r e a t e r i n t e r e s t i n t i n t r a d e . Observa t ion 8 : I n s p i t e o f Observa t ion 7 ( i i ) , i f t h r e a t s are employed, they are l i k e l y to be used by the c o u n t r i e s which are most --.121 -dependent on t i n t r a d e . A. (The o n l y evidence o f t h i s i s the one example of the use o f t h r e a t by M a l a y s i a and B o l i v i a i n 1965.) Observa t ion 9 : The reason f o r Observa t ion 8 i s tha t those c o u n t r i e s which are most dependent on t i n trade w i l l a u t o m a t i c a l l y be most a f f e c t e d by terms which are unfavourable toward producing c o u n t r i e s . F i n a l l y , i t must be s a i d tha t North-South n e g o t i a t i o n s i n the trade i s s u e - a r e a are h i g h l y amenable to a n a l y s i s i n terms of b a r g a i n i n g b e h a v i o r . I t would be a s u f f i c i e n t payof f f o r t h i s w r i t e r i f t h i s re levance has been demonstrated i n the s t u d y . - 1 2 2 -NOTES I n t r o d u c t i o n ^The voluminous l i t e r a t u r e on non-al ignment and n e u t r a l i s m i s proof of t h i s a s s e r t i o n . Some of the b e t t e r known works i n t h i s area i n c l u d e , C e c i l V . Crabb, The Elephants and the Gra s s : A Study of Non- al ignment . (New Y o r k : F r e d e r i c k A. Praeger , 1965) ; P e t e r L y o n , Neu- t r a l i s m ( L e i c e s t e r : L e i c e s t e r U n i v . P r e s s , 1964) ; and Laurance M a r t i n , e d . , N e u t r a l i s m and Non-al ignment : The New States i n World A f f a i r s , (New Y o r k : Praeger , 1962) . There are o f course numerous a r t i c l e s on the sub jec t as w e l l . 2 The b u l k of l i t e r a t u r e on the North-South q u e s t i o n are l a r g e l y of an economic n a t u r e . See, f o r example, Barbara Ward, The R i c h Nat ions  and the Poor Nat ions (New Y o r k : W.W. Norton & C o . , 1962); David H o r o w i t z , Hemispheres Nor th and South : Economic D i s p a r i t y among Nat ions ( B a l t i m o r e : John Hopkins P r e s s , 1966); John P i n c u s , Trade , A i d and Development: The  R i c h and Poor Nat ions (New Y o r k : M c G r a w - H i l l , 1967); Dudley Seers and Leonard J o y , e d s . . Development i n a D i v i d e d World (Midd le sex : Penguin Books, 1971); Harry J . Johnson, e d . , Trade S t ra tegy f o r R i c h and Poor  Nat ions (London: A l l e n and Unwin, 1971). Those treatments o f a Marx ian bent i n c l u d e , I d r i s Cox, The Hungry H a l f : A Study i n the E x p l o i t a t i o n  of the " T h i r d W o r l d " (London: Lawrence and W i s e h a r t , 1970) ; Harry Magdoff , The Age of I m p e r i a l i s m : The Economics of U . S . F o r e i g n P o l i c y (New Y o r k : Monthly Review, I n c . , 1969) , Chapter 4 ; F e l i x Green , The Enemy (New Y o r k : V in tage Books, 1970) , S e c t i o n Two, Chapters 4, 5 , 6, 7, and 8. (The l a s t two books p e r t a i n ma in ly to US p o l i c y , but the chapters c i t e d concern US r e l a t i o n s v i s - a - v i s Southern c o u n t r i e s . ) The more " p o l i t i c a l " treatments i n c l u d e Bruce M. Rus se t ' s UN v o t i n g s t u d i e s ; see , f o r example, Trends i n  World P o l i t i c s (New Y o r k : M a c m i l l a n C o . , 1965) and " D i s c o v e r i n g V o t i n g Groups i n the U n i t e d N a t i o n s " , American P o l i t i c a l Sc ience Review, V o l . L X , No. 2, pp. 327-339; and B r a n i s l a v G o s o v i c ' s e x c e l l e n t a r t i c l e , "UNCTAD: North-South E n c o u n t e r " , I n t e r n a t i o n a l C o n c i l i a t i o n , May 1968, No. 568, 80 pp. c f . Fred Char les I k l e , How Nat ions Negot i a te (New Y o r k : Praeger , 1964), p . 27, and pp. 30-35. Chapter 1 -^cf. Robert W. Cox, " I n t r o d u c t i o n : P e r s p e c t i v e and Problems" i n R.W. Cox, e d . , The P o l i t i c s of I n t e r n a t i o n a l O r g a n i z a t i o n (New Y o r k : Praeger , 1970) pp. 43-44. - .123 -zIbid., p. 44. Cox suggests, for example, that UNCTAD may be regarded as the functional equivalent of the "single party" for LDC's, acting as their pressure group in the world trade issue-area. James N. Rosenau, "Pre-theories and Theories of Foreign Policy" in R. Barry Farell, ed., Approaches to Comparative and International  Politics (Evanston: Northwestern Univ. Press, 1966), p. 81. Rosenau goes on to identify four basic issue-areas — t e r r i t o r i a l , status, human resources, and nonhuman resources — each of which encompasses " d i s t i n c t i v e motives, actions and interactions...", pp. 82-83. In a subsequent a r t i c l e , "Toward the Study of National-International Linkages" in J.N. Ros enau, ed., Linkage Polit i c s (New York; The Free Press, 1969) , he identifies six "subenvironments" in the international system, v i z . , the contiguous, regional, cold war, r a c i a l , resource, and organizational environments. Trade, in his taxonomy, would f a l l under the resource environment, or in the nonhuman resources issue-area. I feel, however, that the issues in trade are sufficiently distinctive for i t to be treated as an autonomous issue-area. ^This is David Easton's well-worniphrase. See A Framework for  P o l i t i c a l Analysis (New York: Praeger, 1965), p. 50 et passim. -*See, for example, Rudolf J. Rummel, "Some Empirical Findings on Nations and their Behavior", World P o l i t i c s , 1969, Vol. 21, No. 2. One finding (3.2.2) states that "economic development is the single most important determinant of UN voting behavior", which i f nothing more, is an indication of the LDC's using their numerical strength in the UN to press issues of their concern. Another finding (5.1.4) states that "dissimilarities in size and economic development are the most important determinants of the variation in behavior of nations toward each other, explaining 85 per cent of the variance". Such findings suggest to me that the North-South cleavage may be a more important determinant of international interactions than has hitherto been thought. Russet's voting studies also suggest that North-South issues were prominent even in the 1947, 1952, 1957 and 1961 UN assemblies. He found them to be next in prominence to East-West issues. See Trends in World P o l i t i c s , op. c i t . , p. 70. See Gosovic, op. c i t . , pp. 5-8 and Charles L. Robertson, "The Creation of UNCTAD", in Cox, op. c i t . , pp. 258-274. M^y depiction of the UNCTAD "group system" w i l l draw largely on Gosovic's excellent account. See pp. 14-30. 9 Yugoslavia identified i t s e l f with the "Group of 77", although in a s t r i c t sense, i t cannot be considered an LDC. Robertson, op. c i t . , pp. 261-262. -- l"24 -26 P a r t n e r s . . . , p . 87. 2 7 I b i d . , p . 87. 2 8 I b i d . " " " Joint D e c l a r a t i o n of the Developing Count r i e s made at the E ighteenth Se s s ion of the Genera l Assembly" , Genera l Assembly R e s o l u -t i o n 1897 ( X V I I I ) , 11 November, 1963, Annex. I b x d . 31 Proceedings of the U n i t e d Nat ions Conference on Trade and  Development, Geneva, 23 March - 16 June 1964, UN P u b l i c a t i o n , Sales No: 6 4 . I I . B . 11-18 (UN Doc. E/CONF/46/141) , New Y o r k , 1964, V o l . I I , pp. 5-63, h e r e i n a f t e r c i t e d as P r o c e e d i n g s . . . . ( V o l s . I - V I I I ) . 3 2 I b i d . , p . 6. 33 B e l a B a l a s s a , Trade Prospect s f o r Deve lop ing Countr i e s (Homewood, 1 1 1 . : R i c h a r d D. I r w i n , 1964). 34 C u t a j a r and F r a n k s , op. c i t . , p . 158. 35 P r o c e e d i n g s . . . , V o l . I I , p . 11 . I s a i a h F r a n k , op. c i t . , p . 57. 37 P a r t IV came i n t o b e i n g on June 27, 1966, a f t e r the endorse-ment by the necessary t w o - t h i r d s m a j o r i t y . The most important a r t i c l e r e l a t e s to an under tak ing by developed c o u n t r i e s to r e f r a i n from i n c r e a s i n g b a r r i e r s t c i m p o r t s o f i n t e r e s t to L D C ' s . See C u t a j a r and F r a n k s , op. c i t . , p . 143. 38 P i n c u s , op. c i t . , p . 267. 39 A . G . H a r t , N . K a l d o r and J . T i n b e r g e n , "The Case f o r an I n t e r -n a t i o n a l Commodity Reserve C u r r e n c y " i n P r o c e e d i n g s . . . , V o l . I l l , pp. 522-541. 40 P r o c e e d i n g s . . . , V o l . I , p . 27. 41 P i n c u s , op. c i t . , p . 278. 4 2 I b i d . 4 3 i b i d . Gosovic, op. c i t . , p. 32. 1 : LIbid., p. 24. 1 2 I b i d . , p. 26. 13 cf. Pincus, op. c i t . , pp. 48-49. 14 For a f u l l e r exposition of the role of trade in economic develop-ment, see an excellent and concise treatment by Isaiah Frank, "The Role of trade in Economic Development", International Organization, Vol. 22, No. 1, Winter 1966, pp. 44-71. "^Partners in Development: Report of the Commission on International  Development (New York: Praeger, 1969) p. 81, hereinafter cited as Partners.. "^Michael Z. Cutajar and Allison Franks, The Less Developed Countries  in World Trade (London: Overseas Development Institute, 1967), p. 29. 1 7 I b i d . , p. 30. 18 Partners..., p. 84. 19 Pincus, op. c i t . , p. 237 20 Partners..., p. 82. 2 1 I b i d . , p. 84. 22 Cutajar and Franks, op. c i t . , p. 73. 2 3 I b i d . 24 Commodity trade also exhibits some asymmetry, especially when one considers that petroleum exporters take the lion's share of about 34 per cent of the LDC total share of the Northern market. (See Table II) However, in general, there is a more even spread of gains in commodity trade among LDC's simply because many more LDC's are engaged in commodity trade than in manufactures trade. 25 There is strong evidence to suggest that this i s in fact what happens. For instance, in 1964, the top ten LDCs in manufactures trade had accounted for 70.9 per cent of exports to the North, with the two top countries — Hong Kong and India — accounting for close to half (44%) of the total (see Cutajar and Franks, op. c i t . , p. 73). My figures show that the top ten accounted for somewhat less in 1967 (67%), with changes in both the order of and in those LDCs included in this group. Moreover, the two top countries — Hong Kong and Chile (India f e l l to No. 4) — accounted for only 26.3 per cent of the total (see Table III). -126 -Chapter 2 •'•International Tin Study Group, St a t i s t i c a l Year Book 1949, Appendix, p. 217. See also, Klaus E. Knorr, Tin Under Control (Stanford: Stanford Univ. Press, 1945) for a x^ell-documented history and analysis of these schemes. 2 ITSG, St a t i s t i c a l Year Book 1949, loc. c i t . 3 See Knorr, op. c i t . , pp. 89-91, and Siew Nim Chee, "The Inter-national Tin Agreement of 1953", Malayan Economic Review, Vol. 2, No. 1, April- 1957, pp. 36-37. ^Christopher D. Rogers, "Consumer Participation in the Interna-tional Tin Agreements", Malayan Economic Review, Vol. 14, No. 2, Oct. 1969, p. 115, and Knorr, op. c i t . , pp. 95-98. ~*The Times (London), "New Signatory to International Tin Agreement", Feb. 5, 1971, p. 22. Such a view is expressed, for example, by Siew, op. c i t . ^United Nations Tin Conference, 1960. Summary of Proceedings, UN Doc. E/CONF.32/5, pp. 13-14. 8Ibid., p. 13 and p. 18. ^Third International Tin Agreement, Article 1, subsections (c) and (d), United Nations Tin Conference, 1965. Summary of Proceedings, UN Doc. TD/TIN.3/5, p. 29. These two objectives continued to be part of the Fourth International Tin Agreement. See Appendix A, Article 1. 1 0UN Tin Conference, 1965, pp. 14-15. 1 1 I b i d . , p. 26. 1 2"The Tunku's Tin Trouble", The Far Eastern Economic Review, Vol. 51, Jan. 20, 1966, p.89. 13 It should be remembered, however, that tin products in different stages of processing — from t i n metal through to tin-plate and t i n cans — are imports of both Northern and Southern countries. The statement, there-fore, refers only to primary production and consumption. 14 See Rogers, op. c i t . , p. 123. 1 5International Tin Council, S t a t i s t i c a l Yearbook 1968, p. 32. - 127 -"Troubled Tin: Metal's Shortage, High Demand Inflate World Prices; Consumers, Seeing No Downturn, Switch to Substitutes", The Wall  Street Journal, Nov. 12, 1964, p. 28. 1 7 I b i d . 18 Lim Chong Yah, " A Re-appraisal of the 1953 International Tin Agreement", Malayan Economic Review, Vol. 5, No. 1, April 1960, sums up the 1953 objectives as four: 1) the employment objective, 2) the economic production objective, 3) the supply objective, and 4) the price objective. These correspond to the f i r s t four objectives I have identified. The other two objectives were included only after the 1965 Agreement. "^See Appendix A, Article 21 and Article 22. ^ UITC S t a t i s t i c a l Yearbook 1968, p. 12. 2 1See Appendix A, Article 25. 2 2 I b i d . , Article 30. 2 3 I b i d . , Article 33. 2 4 I b i d . , Article 37. J  2 5 I b i d . , Article 40. 2 6See Rogers, op. c i t . , pp. 121-122, and UN Tin Conference, 1970, Economic Committee Meetings, Summary Records of the First to Twenty-fourth meetings, UN Doc. TD/TIN.4/C.1/SR.1-24, p. 77. 27 Rogers, loc. c i t . O Q UN Tin Conference, 1970, Economic Committee Meetings, loc. c i t . 2 9ITC Sta t i s t i c a l Yearbook 1968, p. 15. 30 Economic Committee Meetings, p. 81. 3 1 I b i d . , p. 80. 3 2"Troubled Tin: Metal's Shortage ", The Wall Street Journal, op. c i t . 33 Rogers, op. c i t . , p. 118 and pp. 121-122. ^Economic Committee Meetings, pp. 76-77. - r i 2 8 -3"*Ibid., p. 85. O A Lim, op. c i t . , p. 14, and Yip Yat Hoong, "The Domestic Implementation of the 1953 International Tin Agreement in Malaya", Malayan Economic Review, Vol. 5, No. 2, Oct. 1960, p. 62. 37T,., Ibid. Lim, op. c i t . 39 Ibid., p. 17. Ibid. 41 i See, for example, the Bolivian delegate s statement at the UN Tin Conference, 1965, op. c i t . , p. 13-14. 4 2Rogers, op. c i t . , p. 121. 4 3 I b i d . p. 3. 4 4F.C. Ikle, How Nations Negotiate (New York: Praeger, 1964), 45T... Ibid. 46 Thomas C. Schelling, The Strategy of Conflict (New York: Oxford Univ. Press, 1963), Chapter 3, Appendix A, et passim. 47 Jack Sawyer and Harold Guetzkow, "Bargaining and Negotiation in International Relations", in Herbert C. Kelman, ed., International  Behavior (New York: Holt, Rinehart and Winston, 1965), p. 427. 48 Report by Interim Co-ordinating Committee for International Commodity Arrangements, "Inter-governmental Commodity Agreements" in Proceedings..., Vol. I l l , p. 114. 49 It may not be necessary to follow a l l of these steps i f the situation i s sufficiently urgent and adequate information is available. See Ibid., p. 115. 5 0 I b i d . ~*"*"Ibid. , p. 116. 5 2 I b i d . , p. 118. 5 3 I b i d . - 129 -"^Economic Committee M e e t i n g s , S i x t e e n t h M e e t i n g , p . 157. 5 5 Report by I n t e r i m C o - o r d i n a t i n g Committee p . 118. 5 6 I b i d . , p . 124. 57 Mixed i n t e r e s t s games are those that i n v o l v e both c o m p e t i t i o n and c o o p e r a t i o n . They are d i s t i n g u i s h e d from i d e n t i c a l i n t e r e s t s , or p u r e l y cooperat ive ,games , and oppos i te i n t e r e s t s , or p u r e l y c o m p e t i t i v e , games, a l s o c a l l e d zero-sum games. See, John C. H a r s a n y i , "Game Theory and the A n a l y s i s of I n t e r n a t i o n a l C o n f l i c t " i n James N . Rosenau, e d . , I n t e r n a t i o n a l P o l i t i c s and F o r e i g n P o l i c y , Rev i sed E d i t i o n (New Y o r k : The Free P r e s s , 1969), pp. 370-380, f o r a s u c c i n c t d i s c u s s i o n of these d i s t i n c t i o n s . C O U t i l i t y i s not n e c e s s a r i l y t r a n s f e r a b l e , as r e p r e s e n t a t i o n by numbers may l e a d one to b e l i e v e . I n o ther words , 2 u n i t s of u t i l i t y f o r producers are not n e c e s s a r i l y 2 u n i t s of u t i l i t y f o r consumers as w e l l . The numbers o n l y i n d i c a t e tha t the u t i l i t y o f each s i d e i s measured on an i n t e r v a l s c a l e . See A n a t o l Rapoport , F i g h t s , Games and Debates (Ann A r b o r , M i c h . : U n i v . of M i c h . P r e s s , 1960), pp . 180-186 f o r an e x p l i c a -t i o n of t h i s p o i n t . 59 The 0 u t i l i t y i n d i c a t e s tha t the act o f consumers choosing not to cooperate does not i t s e l f a f f e c t the outcome as such ; i t i s r a t h e r the market forces ("chance") which operate under the c o n d i t i o n of "no agreement" tha t a f f e c t the p r i c e . Such e f f e c t s o f market forces are i n d i c a t e d by producer s ' outcomes 10 and -10 and consumers outcomes 5 and -5 i n the three c e l l s where "no agreement" o b t a i n s . The two se t s of u t i l i t i e s f o r producers and consumers here a l s o i n d i c a t e t h a t over a l ong p e r i o d , they tend to c a n c e l out to z e r o , as market forces become randomized. 60 The same reasoning i n Note 59 a p p l i e s f o r the 0 u t i l i t y h e r e . 61 For s i m p l i c i t y , we have drawn the u t i l i t y f r o n t i e r as the dot ted l i n e j o i n i n g our three Pareto op t ima . I n r e a l i t y , there c o u l d be an indeterminate number of such op t ima , f o r example, there cou ld be d i f f e r e n t degrees of " coopera te " and "compete" , and p o i n t s p l o t t e d a c c o r d i n g l y , a l -though we can assume tha t the f r o n t i e r w i l l f o l l o w the same rough shape. See Sawyer and Guetzkow f o r f u r t h e r e l a b o r a t i o n on t h i s p o i n t , op. c i t . , pp. 476-477. 62 I n a zero-sum game m a t r i x , o n l y Row's payof f s need be e n t e r e d , as Row's gains are always Column's lo s se s and v i c e v e r s a . As s u c h , a nega t ive s i g n i n d i c a t e s a ga in f o r Column. Thi s i n c l u d e s the h i g h l y improbable s i t u a t i o n where producers - 130 TT choose to decrease the price and consumers to increase it. r For pur-poses of game theory, however, a l l possible outcomes have to be specified. Ghana, the leading cocoa producer, was unwilling to accept the price range proposed by consumers, who could not accept Ghana's proposal either. See United Nations Commodity Survey, 1968, p. 91 and Cutajar and Franks, op. c i t . , p. 71 for the failure of producers and consumers to agree on a floor price in a number of cocoa conferences. 65 This i s a term introduced by Fred C. Ikle and Nathan Leites, " P o l i t i c a l Negotiation as a Process of Modifying U t i l i t i e s " , Journal  of Conflict Resolution, Vol. 6, 1962. It has also been called "threat point" in economics, R.L. Bishop, "Game Theoretical Analysis of Bar-gaining", Quarterly Journal of Economics, Vol. 77, 1963; and "resistance point" in labour relations, R.E. Walton and R.B. McKersie, A Behavioral  Theory of Labor Negotiations (New York: McGraw-Hill, 1965). Ikle and Leites define minimum disposition as "the least favorable terms at which each negotiator would prefer agreement to no agreement, op. c i t . , p. 20. We shall use their definition in this study. ^See Rapoport, op. c i t . , for a trenchant critique of game theory with respect to i t s static nature. See also Michael P. Sullivan, "Inter-national Bargaining Behavior", International Studies Quarterly, Vol. 15, No. 3, Sept. 1971, for a similar critique of bargaining literature in international relations. Chapter 3 '''See statements by the Bolivian,Nigerian and Malaysian delegates at the plenary sessions of the 1965 Conference, UN Tin Conference, 1965, op. c i t . , pp. 14-15 and pp. 25-26. 2 The statement of the Thai delegate at the 1960 Conference was similar to this. He referred to the fact that the buffer stock was financed by those least able to do so, UN Tin Conference, 1960, op. c i t . p. 14. 3 See Note 2. 4UN Tin Conference, 1965, p. 19 and p. 26. (The text is in the reported tense, which I have altered to the present tense when cited as quotes.) 5Ibid., p. 14. 6Ibid., p. 15. - 131 -7 I b i d . , p . 19. Q UN T i n Conference , 1970, Economic Committee M e e t i n g s , e s p e c i a l l y the 9 t h , 1 0 t h , 11 th , 1 3 t h , 1 5 t h , 1 6 t h , 1 9 t h , and 23rd meet ings . 9 I b i d . , 16th M a e t i n g , p . 157. ^ I b i d . , see e s p e c i a l l y 19th and 23rd Meet ing s . "^See I b i d , pass im. 12 The c h i e f proponent i s C a r l R. Rogers . See, f o r example, h i s C l i e n t - c e n t e r e d Therapy (Bos ton : Houghton M i f f l i n C o . , 1951) . 1 "3 X J R a p o p o r t , op. c i t . , pp. 286-287. ^ U N T i n Conference , 1965, l o c . c i t . •'"^F.C. de C a l l i e r e s , On the Manner of N e g o t i a t i n g w i t h P r i n c e s ; On the uses of Diplomacy; the c h o i c e of M i n i s t e r s and Envoys; and the  P e r s o n a l Q u a l i t i e s Necessary f o r Success i n M i s s i o n s Abroad ( P a r i s : M i c h e l B r u n e t , 1716) t r a n s l a t e d by A . F . Whyte (New Y o r k : Houghton M i f f l i n , 1919) , pp. 122-123, c i t e d by Sawyer and Guetzkow, op. c i t . , p . 481. I t seems l o g i c a l to expect tha t i n n e g o t i a t i o n s between b a s i c a l l y f r i e n d l y c o u n t r i e s / p a r t i e s , the appeal to s e l f - i n t e r e s t i s q u i t e widespread , i f on ly because the use o f hard techniques- such as t h r e a t s , a r e , i n such s i t u a t i o n s c i r c u m s c r i b e d . The o b s e r v a t i o n has been made, f o r example, of Canadian-US n e g o t i a t i o n s on a wide range of i s s u e s . See K a l J . H o l s t i , "The U n i t e d S ta tes and Canada" i n Steven L . S p i e g e l and Kenneth N . W a l t z , e d s . , C o n f l i c t i n World P o l i t i c s (Cambridge, Mas s . : Winthrop P u b l i s h e r s , 1971) , p . 384. " ^ I k l e and L e i t e s , op. c i t . , p . 23. 17 Rapoport , op. c i t . , p . 280. "^Sawyer and Guetzkow, op. c i t . , p . 480. 19 c f . Rogers , op. c i t . , p . 118. 20 Maghnad D e s a i , "An Econometric Model of the World T i n Economy, 1948-61" , Econometr ica , V o l . 34, No. 1, J an . 1966, pp. 105-134. 21T Economic Committee Meet ings , 10th M e e t i n g , pp. 84-85. I b i d . , 13th K( 2 3 I b i d . , p . 117. 2 2 I b i . , t  M e e t i n g , p . 115. o / Rogers , op. c i t . , p . 120 and p . 126. 2 5 U N T i n Conference , 1965, pp. 25-26. 2 6 I b i d . , p . 25. 27 I b i d . , p . 26. 28 T , . , I b i d . 29 Rapoport , l o c . c i t . 30 See Economic Committee M e e t i n g s , 9th M e e t i n g , p . 72. 31 Thi s might be e s p e c i a l l y t r u e of the U . S . , which i n the p r e -war days was p a r t i c u l a r l y concerned about the t i n c o n t r o l schemes, which i n f a c t prompted i t to accumulate i t s huge s t o c k p i l e . See S iew, op. c i t . 32 UN T i n Conference, 1965, p . 14. J J S c h e l l i n g , op. c i t . , pp. 21-52. 3 4 I b i d . , p . 24. 3 5 U N T i n Conference, 1965, p . 25 J D G e o r g e K e n t , The E f f e c t s of Threats (Ohio S ta te U n i v . P r e s s , 1967), p . 30. 37 -"See UN T i n Conference , 1965, 5th P l e n a r y S e s s i o n , e s p e c i a l l y statements by B o l i v i a n and M a l a y s i a n d e l e g a t e s , pp. 25-26. 3 8 " T h e Tunku's T i n T r o u b l e " , op. c i t . , p . 89. 39 Storm i n the T i n c u p " . The Far E a s t e r n Economic Review, V o l . 51 , J an . 20, 1966, pp. 90-91, and "The Tunku's " l o c . c i t . 40 I b i d . See a l s o , " T i n : I s the P r i c e Too H i g h ? " . The Far  E a s t e r n Economic Review, V o l . 53 , Aug. 18, 1966, p . 323. The M a l a y s i a n delegate to the J u l y C o u n c i l meeting was supposed to have remarked tha t there ensued "some long and d i f f i c u l t n e g o t i a t i o n s " , I b i d . ^ E c o n o m i c Committee M e e t i n g s , 15yh and 19th M e e t i n g s , pp. 136-140 and pp. 178-181. 4 2 I b i d . , p . 139. 4 3 I b i d . , p . 180. - 133 -44 Sawyer and Guetzkow, op. c i t . , p . 485. 4 5 I b i d . ^ N e g o t i a t i o n mores are de f ined by I k l e and L e i t e s as " the con-cept ions as to the ' p r o p e r ' conduct i n n e g o t i a t i o n s that are h e l d by n e g o t i a t o r s , t h e i r governments, t h e i r domestic p u b l i c , e t c . . . . " , op. e x t . , p . 23 . 47 There i s some evidence to suggest tha t there may be such n e g o t i a t i o n mores among b a s i c a l l y f r i e n d l y c o u n t r i e s . For example, K . J . H o l s t i , l o c . c i t . , notes tha t few t h r e a t s are made i n Canadian-US n e g o t i a t i o n s , and perhaps , more i m p o r t a n t l y , that i f made, t h r e a t s do not cross i s s u e - a r e a s . - 134 -BIBLIOGRAPHY Documents and Reports International Tin Council, S t a t i s t i c a l Yearbook 1968, printed by N.V. Drukkerrij van Haeringen, The Hague, and published by the ITC. Haymarket House, 28 Haymarket, London, S.W. 1. International Tin Study Group, S t a t i s t i c a l Yearbook 1949. The Hague, Netherlands, 1950. International Tin Study Group, Tin 1950-1951: A Review of the  World Industry. The Hague: Albani, 1951. Organization for Economic Cooperation and Development, Foreign  Trade, Series C, Commodity Tradej Imports, Vol. 1, 1967. Partners in Development: Report of the Commission on International  Development. (New York: Praeger, 1969) Proceedings of the United Nations Conference on Trade and Develop- ment, Geneva, 23 March-June 16, 1964, UN Doc. 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Revised E d i t i o n . (New Y o r k : The Free P r e s s , 1969) A r t i c l e by John H a r s a n y i . Rowe, J . W . F . Pr imary Commodities i n I n t e r n a t i o n a l Trade . (Cam-b r i d g e : Cambridge U n i v . P r e s s , 1965) Russe t , Bruce M. Trends i n World P o l i t i c s . (New Y o r k : M a c m i l l a n C o . , 1965) Seers , Dudley and Leonard Joy . ( e d s . ) . Development i n a D i v i d e d  W o r l d . (Midd le sex : Penguin Books, 1971) S c h e l l i n g , Thomas C. The S t ra tegy o f C o n f l i c t . (New Y o r k : Oxford U n i v . P r e s s , 1963) S p i e g e l , Steven L . and Kenneth N . W a l t z , ( e d s . ) . C o n f l i c t i n World P o l i t i c s . (Cambridge, M a s s . : Winthrop P u b l i s h e r s , I n c . , 1971) A r t i c l e by K a l J . H o l s t i . S w e r l i n g , B o r i s C. Current I ssues i n Commodity P o l i c y . Essays i n I n t e r n a t i o n a l F inance , No. 38, June 1962. ( P r i n c e t o n : P r i n c e t o n U n i v . , I n t e r n a t i o n a l F inance S e c t i o n , Dept . o f Economics) Van Meerhaeghe, M . A . G . I n t e r n a t i o n a l Economic I n s t i t u t i o n s . (London: Longmans, 1966) V e r b i t , G i l b e r t P. Trade Agreements f o r Developing C o u n t r i e s . (New Y o r k : Columbia U n i v . P r e s s , 1969) W a l t o n , R . E . , and R . B . M c K e r s i e . A B e h a v i o r a l Theory of Labor  N e g o t i a t i o n s . (New Y o r k : M c G r a w - H i l l , 1965) Ward, B a r b a r a . The R i c h Nat ions and the Poor N a t i o n s . (New Y o r k : W.W. Norton & C o . , 1962) - 139 -Wells, Sidney J. Trade and International Inequality. (London: Fabian Society, 1965) Yip Yat Hoong. The Development of the Tin Mining Industry of Malaya. (Kuala Lumpur: Univ. of Malaya Press, 1969) ARTICLES, PERIODICALS AND NEWSPAPERS Asher, Robert E. "International Agencies and Economic Development: An Overview". International Organization, Vol. 22, No. 1, Winter 1968, pp. 432-458. "Big Nations Asked to Join Tin Pact". The Times. (London) April 14, 1970, p. 20. Bishop, R.L. "Game Theoretical Analysis of Bargaining". Quarterly  Journal of Economics, Vol. 77, 1963. Davies, Joseph S. "International Commodity Agreements: Hope, Illusion or Menace?" Committee on International Economic Policy in Co- operation with Carnegie Endowment for International Peace, 1947. Desai, Maghnad. "An Econometric Model of the World Tin Economy, 1948-61". Econometrica, Vol. 34, No. 1, Jan. 1966, pp. 105-134. Evans, John W. "The General Agreement on Trade and Tari f f s " . International Organization, Vol. 22, No. 1, Winter 1968, pp. 72-98. Frank, Isaiah. "The Role of Trade in Economic Development". International Organization, Vol. 22, No. 1, Winter 1968, pp. 44-71. Gardner, Richard N. "The United National Conference on Trade and Development". International Organization, Vol. 22, No. 1, Winter 1968, pp. 99-130. Gosovic, Branislav. "UNCTAD:' North-South Encounter". International  Conciliation, May 1968, No. 568, 80 pp. Ikle, Fred Charles and Nathan Leites. " P o l i t i c a l Negotiation as a Process of Modifying U t i l i t i e s " . Journal of Conflict Resolution, Vol. 6, 1962. Kotschniq, W.M. "The UN as an Instrument of Economic and Social Development". International Organization, Vol. 22, No. 1, Winter 1968, pp. 16-43. Kravis, Irvin G. "International Commodity Agreements to Promote Aid and Efficiency: The Case of Coffee". The Canadian Journal of Economics, Vol. 1, No. 2, May 1968, pp. 295-317. '- 140 -Kristensen, T. "The South as an Industrial Power". Cooperation  and Conflict, Vol. 2, 1967, pp. 61-66. Lim Chong-Yah. "A Re-appraisal of the 1953 International Tin Agreement". The Malayan Economic Review, Vol. 5, No. 1, April 1960. "New Signatory to International Tin Agreement". The Times. (London) Feb. 5, 1971, p. 22. Ohlin, Goran. "The Organization for Economic Cooperation and Development". International Organization, Vol. 22, No. 1, Winter, 1968, pp. 231-243. Rogers, Christopher D. "Consumer Participation in International Tin Agreements". The Malayan Economic Review, Vol. 14, No. 2, Oct. 1969, pp. 113-125. Rummel, Rodolf J. "Some Empirical Findings on Nations and their Behavior". World P o l i t i c s , Vol. 21, No. 2, 1969, pp. 226-242. Russet, Bruce M. "Discovering Voting Groups in the United Nations". American P o l i t i c a l Science Review, Vol. 60, No. 2, pp. 327-339. Siew Nim Chee. "The International Tin Agreement of 1953". The  Malayan Economic Review, Vol. 2, No. 1, April 1957, pp. 35-53. "Storm in a Tincup". The Far Eastern Economic Review, Vol. 51, Jan. 20, 1966, pp. 90-91. Sullivan, Michael P. "International Bargaining Behavior". Inter- national Studies Quarterly, Vol. 15, No. 3, Sept. 1971, pp. 359-382. "The Tunku's Tin Trouble". The Far Eastern Economic Review, Vol. 51, Jan. 20, 1966, pp. 88-91. "Troubled Tin: Metal's Shortage, High Demand Inflate World Prices; Consumers Seeing no Downturn, Switch to Substitutes". The Wall Street  Journal, Nov. 12, 1964, p. 28. "Tin Council Changes Price Limits". The Times, Oct. 22, 1970, p. 28. "Tin: Is the Price too High?" The Far Eastern Economic Review, Vol. 53, Aug. 18, 1966, pp. 321-324. "Tin Output May F a l l Short by 10,000 Tons". The Times, Aug. 18, 1970, p. 20. Yip Yat Hoong. "The Domestic Implementation of the 1953 International Tin Agreement in Malaya". The Malayan Economic Reviex<r, Vol. 5, No. 2, Oct. 1960. A P P E N D I C E S - 142 -APPENDIX A: THE FOURTH INTERNATIONAL TIN AGREEMENT, 1970 Source: United Nations Tin Conference 1970, Summary of  Proceedings, UN Doc. TD/TIN. 4/7/Rev.l, UN Publication, Sales No. E. 70. II. D. 10, pp. 5-- 143 -Preamble The Contracting Governments, recognizing: (a) That commodity agreements, by helping to secure stabilization of prices and steady development of export earnings and of primary commodity markets, can signifi-cantly assist economic growth, especialy in developing producing countries; (b) The value of continued co-operation between pro-ducing and consuming countries, within the framework of the basic principles and objectives of the United Nations Conference on Trade and Development by means of an international commodity agreement, to help to resolve problems relevant to tin; (c) The exceptional importance of tin to numerous countries whose economy is heavily dependent upon favourable and equitable conditions for its production, consumption or trade; (d) The need to protect and foster the health and growth of the tin industry, especialy in the developing producing countries, and so to ensure adequate supplies of tin to safeguard the interests of consumers in the importing countries; (e) The importance to tin producing countries of main-taining and expanding their import purchasing power; and (/) The desirability of achieving the expansion of tin consumption in both developing and industrialized countries; Have agreed as folows: . C H A P T E R I — O B J E C T I V E S Article 1 OBJECTIVES The objectives of.this Agreement are: (a) To provide for adjustment between world produc-tion and consumption of tin and to aleviate serious diffi-culties arising from surplus or shortage of tin; (b) To prevent excessive fluctuations in the price of tin and in export earnings from tin; (c) To make arangements which will help to increase the export earnings from tin, especialy those of the deve-loping producing countries, thereby helping to provide such countries with resources for accelerated economic growth and social development, while at the same time taking into account the interests of consumers in import-ing countries; (d) To ensure conditions which will help to achieve a dynamic and rising rate of production of tin on the basis of a remunerative return to producers, which will help to secure an adequate supply at prices fair to consumers and to provide a long-term equilibrium between produc-tion and consumption; (e) To prevent widespread unemployment or under-employment and other serious difficulties which may result from maladjustments between the supply of and the demand for tin; (/) In the event of a shortage of supplies of tin occur-ring or being expected to occur, to take steps to secure an increase in the production of tin and a fair distribution of tin metal in order to mitigate serious difficulties which consuming countries might encounter; (g) In. the event of a surplus of supplies of tin occurring or being expected to occur, to take steps to mitigate serious difficulties which producing countries might encounter; (h) To review disposals of non-commercial stocks of tin by Governments and to take steps which would avoid any uncertainties and difficulties which might arise; (i) To keep under review the need for the development and exploitation of new deposits of tin and for the pro-motion, through, inter alia, the technical and financial assistance resources of the United Nations and other organizations within the United Nations system, of the most efficient methods of mining, concentration and smelt-ing of tin ores; and (j) To continue the work of the International Tin Council under the First, Second and Third International Tin Agreements. - i M f -CHAPTER n — DEFINITIONS Article 2 DEFINITIONS For the purposes of this Agreement: Tin means tin metal, any other refined tin or the tin content of concentrates or tin ore which has been extracted from its natural occurrence. For the purposes of this definition, "ore" shal be deemed to exclude (a) material which has been extracted from the ore body for a purpose other than that of being dressed and (b) material which is discarded in the process of dressing. Tin metal means refined tin of good merchantable qua-lity assaying not less than 99.75 per cent. Buffer stock means the bufer stock established and operated in accordance with the provisions of chapter VIII of this Agreement. Tin metal held means the metal holding of the bufer stock, including metal which has been bought for the bufer stock but not yet received, and excluding metal which has been sold from the bufer stock but not yet delivered, by the Manager of the bufer stock. Ton means " metric ton, i.e. 1,000 kilogrammes. Net exports means the amount exported in the cir-cumstances set out in part one of annex C to this Agree-ment less the amount imported as determined in accord-ance with part two of the same annex. Participating country means a country whose Govern-ment has ratified, approved or accepted this Agreement, or given notification of intention to ratify, approve or accept it, or acceded to it, or any territory or territories whose separate participation has taken efect under article 49 or as the context may require, the Government of such country or of such territory or territories them-selves. Producing country means a participating country which the Council has declared, with the consent of that country, to be a producing country. Consuming country means a participating country which the Council has declared, with the consent of that country, to be a consuming country. Contributing country means a participating country which has contributions in the bufer stock. Simple majority means a majority of the votes cast by participating countries counted together. Simple distributed majority means a majority of the votes cast by producing countries and a majority of the votes cast by consuming countries, counted separately. Two-thirds distributed majority means a two-thirds majority of the votes cast by producing countries and a two-thirds majority of the votes cast by consuming coun-tries, counted separately. Entry into force means, except when qualified, the ini-tial entry into force of this Agreement, whether such entry into force is provisional in accordance with article 47 or definitive in accordance with article 46. Control period means a period which has been so de-clared by the Council and for which a total permissible export tonnage has been fixed. Quarter means a calendar quarter beginning on 1 Janu-ary, 1 April, 1 July or 1 October. Financial year means a period of one year beginning on 1 July and ending on 30 June of the next year. CHAPTER III — MEMBERSHIP IN THE COUNCIL Article 3 PARTICIPATION IN THE COUNCIL Each Contracting Government shal constitute a single member of the Council, except as otherwise provided in article 49. Article 4 CATEGORIES OF PARTICIPANTS (a) Each member of the Council shal be declared by the Council, with the consent of the country concerned, to be a producing or a consuming country, as soon as possible after receipt by the Council of notice from the depositary Government that such member has deposited its instrument of ratification, approval, acceptance or accession under article 45 or 48, or notification of inten-tio  to ratify, approve or accept this Agreement under aticle 47. (b) The membership of producing countries and con-suming countries shal be based respectively on their domestic mine production and their consumption of tin metal provided that: (i) The membership of a producing country which is a substantial consumer of tin metal derived from its own domestic mine production shal with the consent of the country be based on its exports of tin; (ii) The membership of a consuming country which produces from its own domestic mines a substantial proportion of the tin it consumes shal with the consent of the country be based on its imports of tin. (c) In its instruments of ratification, approval, accept-ance or accession or in its notification of intention to ratify, approve or accept this Agreement, each Contract-ing Government may state the category of participating countries to which it considers that' it should belong. (d) At the first meeting of the Council after the entry into force of the Agreement, the Council shal take the decisions necessary for the application of this article by a majority of votes cast by the participating countries listed in annex A and by a majority of votes cast by the participating countries listed in annex B, the votes being counted separately and voting rights being in conformity with annexes A and B to this Agreement. - U 5 -Article 5 CHANGE OF CATEGORY (a) Where the position of a participating country has changed from that of a consuming to that of a producing country, or vice versa, the Council shall, on the request of that country or on its own initiative with the country's consent, consider the new position and determine the ton-nages or percentages applicable. (b) The Council shall determine the date when the ton-nages and/or percentages, as the case shall require, which it has arrived at under paragraph (a) of this article shall come into effect. (c) From the date of coming into effect determined by the Council under paragraph (6) the Contracting Govern-ment concerned shall cease to hold any of the rights and privileges in, or to be bound by any of the obligations under, this Agreement which pertain to countries in its previous category and shall acquire all the rights and pri-vileges in, and shall be bound by all of the obligations under, this Agreement which pertain to countries in its new category: Provided that: (i) If the change of category is from a producing country to a consuming country, the country which has changed shall nevertheless retain its rights to the refund at the termination of this Agreement of its share in the liquidation of the buffer stock in accordance with articles 30, 31 and 32; and (ii) If the change of category is from a consuming country to a producing country, the conditions laid down by the Council for the country which has changed shall be equitable as between the country and the other producing countries already parti-cipating'in the Agreement. CHAPTER IV — ORGANIZATION^ A N D ADMINISTRATION Article 6 THE INTERNATIONAL TIN COUNCIL (a) The International Tin Council (hereinafter called the Council), established by the previous International Tin Agreements, shall continue in being for the purpose of administering the Fourth International Tin Agreement, with the membership, powers and functions provided for in this Agreement. (b) The seat of the Council shall be in London, unless the Council decides otherwise. Article 7 COMPOSITION OF THE INTERNATIONAL TIN COUNCIL (a) The Council shall be composed of all the participat-ing countries. ' (b) (i) Each participating country shall be represented in the Council by one delegate. Each country may designate alternates and advisers to attend sessions of the Council; (ii) An alternate delegate shall be empowered to act and vote on behalf of the delegate during the latter's absence or in other special circumstances. Article 8 POWERS AND FUNCTIONS OF THE COUNCIL The Council: (a) Shall have such powers and perform such duties as may be necessary for the administration and operation of this Agreement. (b) Shall establish its own rules of procedure. (c) Shall receive from the Executive Chairman, when-ever it may request, such information with regard to the holdings and operations of the buffer stock as it considers necessary to fulfil its functions under this Agreement. (d) May request participating countries to furnish any necessary data concerning production, consumption, international trade and stocks and any other information necessary for the satisfactory administration of this Agreement not inconsistent with the national security provisions as laid down in article 41, and the c.entries shall furnish to the fullest extent possible the information so requested. (e) Shall, at least once in every quarter, estimate the probable production and consumption of tin during the following quarter, and it may consider the influence of such other factors as are relevant to the total statistical tin position for that period. (/) Shall make arrangements for the continuing study of the short-term and long-term problems of the world tin industry; to this effect it shall undertake or promote such studies on problems of the tin industry as it deems appro-priate. (g) Shall keep itself informed of new uses of tin and the development of substitute products which might replace tin in its traditional uses. (h) Shall encourage wider participation in organizations devoted to research aimed at promoting the consumption of tin. (/) Has the power to borrow for the purposes of the Administrative Account established under article 15. (j) (i) Shall publish after the end of each financial year a report of its activities for that year; (ii) Shall publish after the end of each quarter (but not earlier than three months after the end of that quarter, in the absence of a contrary deci-sion by the Council) a statement showing the tonnage of tin metal held at the end of that quarter. (k) May appoint such committees as it considers neces-sary to assist it in the performance of its functions, and may draw up their terms of reference; these committees may, unless the. Council otherwise decides, establish their own rules of procedure. ><• . . • • : - 146 -. (/) (i) May at any time, by a two-thirds distributed majority, delegate to any commitee any power i which the Council may exercise by a simple distributed majority, other than those relating to: assessment of contributions under article 16, floor and ceiling prices under articles 19 and 29, assessment of export control under article 33, action in the event of a tin shortage under article 37; (ii) Shal, by a two-thirds distributed majority, fix the membership and terms of reference of any such commitee; (iii) May by a simple majority revoke at any time any delegation of powers to any such commitee of the appointment of any such commitee. • (m) Shal make whatever arangements are appropriate for consultation and co-operation with: (i) The United Nations, its appropriate organs (parti-cularly the United Nations Conference on Trade and Development), the specialized agencies, other organizations within the United Nations system and appropriate inter-governmental organizations; and (ii) Non-participating countries which are Members of the United Nations or of its specialized agencies or which were parties to the previous International Tin Agreements. '). Article 9 EXECUTIVE CHAIRMAN AND VICE-CHAIRMEN OF THE COUNCIL ' (a) The Council shall, by a two-thirds distributed majo-rity and by ballot, appoint an independent Executive Chairman, who may be a national of one of the partici-pating countries. The appointment of the Executive Chairman shal be considered at the first session of the Council after the entry into force of this Agreement. (b) The Executive Chairman shal not have been acti-vely engaged in the tin industry or in the tin trade during the five years preceding his appointment and shal com-ply with the conditions set out in article 13. (c) The Executive Chairman shal hold office for such period and on such other terms and conditions as the Council may determine. (d) The Executive Chairman shal preside over meetings of the Council; he shal have no vote. (e) The Council shal elect annualy a first Vice-Chairman and a second Vice-Chairman, chosen alterna-tely each financial year from among the delegates of the producing countries and the delegates of the consuming countries. (f) If the Executive Chairman is temporarily absent, he shal be replaced by the first Vice-Chairman, or if neces-sary by the second Vice-Chairman, who shal only have the duty to preside over meetings unless the Council dcides otherwise. If the Executive Chairman resigns or is permanently unable to perform his duties, the Coun-cil shal appoint a new Executive Chairman. (g) When a Vice-Chairman performs the duties of the Executive Chairman he shal have no vote; the right to vote of the country he represents may be exercised in accordance with the provisions of paragraphs (b) (ii) of article 7 and (c) of article 12. Article 10 SESSIONS OF THE COUNCIL (a) The Council shal hold at least four sessions a year. (b) The depositary Government shal call the first eeting of the Council under this Agreement in London. This meeting shal begin within eight days after entry into force of the Agreement. (c) Meetings shal be convened, at the request of any participating country or as may be required by the provi-sions of this Agreement, by the Executive Chairman or, after consultation with the first Vice-Chairman, and on his behalf, by the Secretary in the event of the incapacity of the Executive Chairman. Meetings may also be convened by the Executive Chairman at his discretion. (d) Meetings shall, unless otherwise decided by the C uncil, be held at the seat of the Council. Except in the case of meetings convened under article 29, at least seven days' notice of each meeting shal be given. • (e) Delegates holding two-thirds of the total votes of all producing countries and two-thirds of the total votes of all consuming countries shal together constitute a quorum at any meeting of the Council. If for any session of the Council, there is not a quorum as defined above, a further session shal be convened after not less than seven days, at which delegates holding more than 1,000 votes shal together constitute a quorum. Article 11 VOTES (a) The producing countries shal together hold 1,000 votes which shal be distributed among them so that each producing country receives five initial votes and, in addi-tion, a proportion as nearly as possible equal to the pro-portion which the percentage of that country as listed in annex A or as published from time to time in accordance with paragraph (q) of article 33 bears to the total of the percentages of all producing countries. (b) The consuming countries shal together hold 1,000 votes, which shal be distributed among them so that each consuming country receives five initial votes and, in addi-tion, a proportion as nearly as possible equal to the pro-portion which the tonnage of that country as listed in annex B bears to the total of the tonnages of all consum-ing countries: Provided that: (i) If there are more than thirty consuming countries, the initial vote for each consuming country shal be the highest whole number consistent with the requirement that the total of all initial votes for all consuming countries shal not exceed 150; (ii) If any country not listed in annex B ratines, ap-proves, accepts, gives notification of intention to ratify, approve or accept, or accedes to, this Agree-ment as a consuming country, or has changed its category from that of a producing country to that of a consuming country in accordance with article 5 of this Agreement, the Council shal determine and publish a tonnage for that country; this tonnage shal take efect upon the date decided by the Council for the purposes of this article as if it were one of the tonnages listed in annex B; (iii) The Council may at its first session revise annex B and shal publish the revised annex, which shal be efective for the purpose of this article forth-with; and (iv) Subsequently, at meetings to be held during the second quarter of each calendar year the Council shal  r e v i e w the figures of the consumption of tin of each consuming country for each of the three preceding calendar years and shal publish revised tonnages for each consuming country on the basis of the averages of such figures of consumption, which tonnages shal take efect on 1 July next folowing for the purposes of this article as if they were the tonnages listed in annex B. (c) Where, by reason of the failure of one or more of the countries listed in annex A or annex B to ratify, approve or accept, or give notification of intention to ratify, approve or accept this Agreement, or by reason of the operation of the provisions of this Agreement, or by reason of a change in the category of a participating coun-try, the total of the votes of the consuming countries or of the producing countries becomes less than 1,000, the balance of votes shal be distributed among other con-suming or producing countries, as the case may be, as nearly in proportion to the votes they already hold, less in each case the initial votes, as is consistent with there being no fractional votes. (d) No participating country shal have more than 450 votes. (e) There shal be no fractional votes. Article 12 VOTING PROCEDURE OF THE COUNCIL (a) Each member of the Council shal be entitled to cast the number of votes it holds in the Council. When voting, a delegate shal not divide his votes. When abstaining, a delegate shal be deemed not to have cast his votes. (b) Decisions of the Council shall, except when other, wise provided, be taken by a simple distributed majority-(c) Any participating country may, in a form satisfac-tory to the Council, authorize any other participating country to represent its interests and to exercise its voting rights at any meeting of the Council. ; Article 13 THE STAFF OF THE COUNCIL (a) The Executive Chairman appointed under article 9 shal be responsible to the Council for the administration and operation of this Agreement in accordance with the decisions of the Council. (b) The Executive Chairman shal also be responsible for the administration of the secretariat services and staff at the Council's seat. (c) The Council shal appoint a Secretary of the Council and a Manager of the Bufer Stock (hereinafter caled the Manager) and shal determine the terms and conditions of service of those two officers. (d) The Council shal give instructions to the Executive Chairman as to the manner in which the Manager is to carry out the duties laid down in this Agreement as wel as such additional duties as the Council may determine. (e) The Executive Chairman shal be assisted by the staff considered necessary by the Council. All staff, includ-ing the Secretary of the Council and the Manager, shal be responsible to the Executive Chairman. The method of ppointment and the conditions of employment of the staff shal be approved by the Council. (J) The Executive Chairman and the staff of the Council may not hold, or shal cease to hold, any financial interest in the tin industry or in the tin trade; they shal not seek or receive instructions regarding their work or their duties from any Government or person or authority other than the Council or a person acting on behalf of the Council under the terms of this Agreement. (g) No information concerning the operation or admin-istration of this Agreement shal be revealed by the Exe-cutive Chairman, the Manager or other staff of the Coun-cil, except as may be authorized by the Council or as is necessary for the proper discharge of their duties under this Agreement. CHAPTER V — PRIVILEGES AND IMMUNITIES Article 14 PRIVILEGES AND IMMUNITIES (a) The Council shal be accorded in each participating country such currency exchange facilities as may be necessary for the discharge of its functions under this Agrement. (b) The Council shal have legal personality. It shal in particular have the capacity to contract, acquire and dispose of movable and immovable property and to insti-tute legal proceedings. (c) The Council shal have in each participating country, to the extent consistent with its law, such exemption from taxation on the assets, income and other property of the Council as may be necessary for the-discharge of its func-tions under this Agreement .. - 1L8 -(d) The member in whose territory the headquarters of the Council is situated (hereinafter referred to as "the host member") shall, as soon as possible after the entry into force of the Agreement, conclude with the Council an agreement to be approved by the Council relating to the status, privileges and immunities of the Council, of its Executive Chairman, its staff and experts and of repre-sentatives of members while in the territory of the host member for the purpose of exercising their functions. (e) The agreement envisaged in paragraph (d) of this article shal be independent of this Agreement and shal prescribe the conditions for its own termination. (J) The host member shal grant exemption from taxa-tion on remuneration paid by the Council to its employees other than those employees who are its nationals. CHAPTER VI — FINANCE Article 15 FINANCE (a) (i) There shal be kept two accounts—the Admin-istrative Account and the Bufer Stock Account— for the administration and operation of this Agreement; (ii) The administrative expenses of the Council, including the remuneration of the Executive Chairman, the Secretary, the Manager and the staff, shal be brought into the Administrative Account; (iii) Any expenditure which is solely attributable to bufer-stock transactions or operations, includ-ing expenses for borrowing arrangements, storage, commission and insurance, shal be borne by the bufer-stock contributions payable by contributing countries under this Agree-ment and shal be brought by the Manager into the Bufer Stock Account. The liability on the Bufer Stock Account for any other type of expenditure shal be decided by the Executive Chairman. (b) The Council shal not be responsible for the expenses of delegates to the Council or the expenses of their alter-nates and advisers. Article 16 THE ADMINISTRATIVE ACCOUNT (a) The Council shall, at its first session after the entry into force of this Agreement, approve the budget of con-tributions and expenditure on the Administrative Account for the period between the date of entry into force of the Agreement and tha end of the financial year. Thereafter it shal approve a similar annual budget for each financial year. If at any time during any financial year, because of unforeseen circumstances which have arisen or are likely to arise, the balance remaining in the Administrative Account is likely to be inadequate to meet the administra-tive expenses of the Council, the Council may approve a necessary supplementary budget for the remainder of that financial year. (b) Upon the basis of such budgets the Council shal assess in sterling the contribution to the Administrative Account of each participating country, which shal be liable to pay its full contribution to the Council upon notice of assessment. Each participating country shal pay in respect of each vote which it holds in the Council upon the day of assessment one two-thousandth of the total amount required, provided that no country shal contri-bute less than £200 sterling in any financial year. Article 17 PAYMENT OF CASH CONTRIBUTIONS (a) Cash payments to the Administrative Account by participating countries under articles 16 and 53, cash payments to the Bufer Stock Account by contributing countries under articles 21,22 and 23, cash payments from the Administrative Account to participating countries under article 53 and cash payments from the Bufer Stock Account to contributing countries under articles 21,22, 23, 31 and 32 shal be made in sterling or, at the option of the country concerned, in any currency which is freely con-vertible into sterling on the London foreign exchange market. (b) Any participating country which fails to pay its contribution to the Administrative Account within six months of the date of notice of assessment may be deprived by the Council of its right to vote. If such a country fails t  pay its contribution within twelve months of the date of notice of assessment, the Council may deprive it of any other rights under this Agreement, provided that the Coun-cil shall, on receipt of any such outstanding contribution, r store to the country concerned the rights of which it has been deprived under this paragraph. Article 18 AUDIT AND PUBLICATION OF ACCOUNTS The Council shall, as soon as possible after the end of each financial year, publish the independently audited Administrative and Bufer Stock Accounts, provided that such Bufer Stock Accounts shal not be published earlier than three months after the end of the financial year to which they relate. CHAPTER VII — FLOOR AND CEILING PRICES Article 19 FLOOR AND CEILING PRICES (a) For the purposes of this Agreement there shal be floor and ceiling prices for tin metal. - 1^9 -(b) The initial floor and ceiling prices shal be those which were in force under the Third Agreement at the date of the termination of that Agreement. (c) The range between the floor and ceiling prices shal be divided into three sectors. The Council may at any meeting decide the extent of each or any of these sectors. (d) (i) The Council shall, at its first session after the entry into force of this Agreement and from time to time thereafter or in accordance with the provisions of article 29, consider whether the floor and ceiling prices are appropriate for the atainment of the objectives of this Agree-ment and may revise either or both of them; (ii) In so doing, the Council shal take into account the short-term developments and medium-term trends of tin production and consumption, the existing capacity for mine production, the adequacy of the current price to maintain suffi-cient future mine production capacity and other relevant factors. (e) The Council shal publish as soon as possible any revised floor and ceiling price, including any provisional or revised price determined under article 29 and any revised division of the range. CHAPTER VIII — THE BUFFER STOCK Article 20 i ESTABLISHMENT OF THE BUFFER STOCK (a) A bufer stock shal be established. (b) (i) Contributions to the bufer stock shal be made by producing countries in accordance with the provisions of article 21; (ii) Any country invited to the United Nations Tin Conference, 1970, may also make a voluntary contribution to the bufer stock in accordance with article 22. (c) For the purposes of this article any part of a con-tribution made in cash shal be deemed to be equivalent to the quantity of tin metal which could have been pur-chased at the floor price in efect on the date of entry into force of this Agreement. Article 21 COMPULSORY CONTRIBUTIONS (a) (i) Producing countries shal make contributions to the bufer stock amounting in the aggregate to the equivalent of 20,000 tons of tin metal, (ii) The equivalent of 7,500 .tons of this aggregate contribution in sub-paragraph (i) shal be due on the entry into force of the Agreement and, sub-ject to the provisions of sub-paragraph (iii), shal be made on the date of the first meeting of the Council under this Agreement. . . (iii) The Council shal decide what portions of the contributions to be made under sub-paragraphs (i) or (ii) shal become due in cash or in tin metal. The producing countries shal make the payment of the cash portion on the date deter-mined by the Council and the payment of the portion in tin metal not later than three months from the date of such decision. (iv) At any time the Council may determine by which date or dates and in what instalments the whole or part of the balances of the aggregate contri-bution shal be made. However, the Council may authorize the Executive Chairman to request payment of instalments of these balances at not less than fourteen days' notice. (v) If at any time the Council holds cash assets in the Bufer Stock Account, in excess of the con-tributions made under sub-paragraph (ii) and of any voluntary contribution made under article 22, the Council may authorize refunds out of such excess to the producing countries in proportion to the contributions they have made under this article. The balances referred to as due under sub-paragraph (iv) shal be in-creased by the amount of .uch refunds. At the request of a producing country, the refund to: which it is entitled may be retained in the bufer stock. (b) Contributions due in accordance with paragraph (a) of this article may, with the consent of the contributing country concerned, be made by transfer from the bufer stock held under the Third Agreement. (c) The contributions referred to in paragraph (a) of this article shal be apportioned among the producing countries according to the percentages in annex A, as reviwed and redetermined at the first session of the Council in accordance with paragraph (m) of article 33. • (d) (i) If on or after the entry into force of this Agree-ment a country listed in annex A ratifies, ap-proves or accepts, or gives notification of inten-tion to ratify, approve or accept, or accedes to, this Agreement, or if a consuming country has changed its category to that of a producing country in accordance with article 5, the contri-bution of that country shal be determined by the Council with reference to its percentage in annex A; (ii) Contributions determined under sub-paragraph (i) shal be made on the date of the deposit of the instrument or on the date determined by the Council under paragraph (b) of article 5; (iii) The Council may direct refunds, not exceeding in the aggregate the amount of any contribution received under sub-paragraph (i), to be made to the other producing countries or consuming countries. If the Council decides that such refunds or parts of such refunds are to be made in tin metal, it may atach to these refunds such conditions as it deems necessary. At the request of a producing country, the refund to which it is entitled may be retained in the bufer stock. - 150 -(e) (i) A producing country which for the purpose of making a contribution under this article wishes to export tin from stocks lying within that coun-try may apply to the Council io be permitted to export the tonnage so desired in addition to its permissible export tonnage, if any, determined under article 33; (ii) The Council shall consider any such application and may approve it subject to such conditions as it deems necessary. Subject to these conditions being satisfied and to the furnishing of such evidence as the Council may require to identify the metal or concentrates exported with the tin metal delivered to the buffer stock, para-graphs (/J), (o) and (p) of article 33 shall not apply to such exports. (_/*) Contributions in tin metal may be accepted by the Manager in warehouses officially approved by the London Metal Exchange or at such other place or places as are determined by the Council. The brands of tin so delivered shall be brands registered with and recognized by the London Metal Exchange. Article 22 VOLUNTARY CONTRIBUTIONS (a) Any country invited to the United Nations Tin Con-ference, 1970, may, with the consent of the Council and upon conditions which shall include conditions as to refund, make voluntary contributions to the buffer stock in cash or in tin metal or in both. Such voluntary contri-bution shall be additional to the contributions shown in paragraph (a) of article 21. (b) The Executive Chairman shall notify the partici-pating countries and any non-participating country which has made a contribution under paragraph (a) of this article of the receipt of any such voluntary contribution. (c) Notwithstanding the conditions which shall have been imposed under paragraph (a) of this article, the Council may refund to any country which has made a voluntary contribution to the buffer stock under para-graph (a) of this article the whole or any part of such con-tribution. If such refund or part of such refund is made in tin metal the Council may attach to this refund the con-ditions which it deems necessary. Article 23 PENALTIES (a) The Council shall determine penalties to be applied to countries which fail to meet their obligations under paragraph (a) (iv) of article 21. (6) If a producing country does not fulfil its obligations under article 21 the Council may deprive it of any or all of its rights and privileges under this Agreement and may also require the remaining producing countries to make good the deficit in cash or in tin metal or in both. (c) If a part of the deficit is to be made good in tin metal, the producing countries which are making good that deficit shall be permitted to export the amounts required of them in addition to any permissible export amounts that may have been determined under article 33. Subject to the furnishing of such evidence as the Council may require to identify the metal or concentrates exported with the tin metal delivered to the buffer stock, para-graphs (/j), (o) and (/>) of article 33 shall not apply to such exports. (cl) The Council may at any time and on such conditions as it may determine: (i) Declare that the default has been remedied; (ii) Restore the rights and privileges of the country concerned; and (iii) Refund the additional contributions made by the other producing countries under paragraph (b) of this article together with interest at a rate which shall be determined by the Council, taking into account prevailing international interest rates, provided that, in respect of that part on the addi-tional contribution which has been made in tin metal, such interest shall be calculated on the basis of the cash equivalent at the settlement price for tin metal on the London Metal Exchange on the date of the decision of the Council under para-graph (b) of this article. If such refunds or parts of such refunds are made in tin metal the Council may attach to these refunds the conditions which it deems necessary. Article 24 BORROWING FOR THE BUFFER STOCK (a) The Council may borrow for the purposes of the buffer stock and upon the security of tin warrants held by the buffer stock such sum or sums as it deems necessary, provided that the maximum amount of such borrowing and the terms and conditions thereof shall have been approved by the majority of the votes cast by consuming countries and all the votes cast by producing countries. • (b) The Council may by a two-thirds distributed majo-rity make any other arrangements it thinks fit for borrow-ing for the purposes of the buffer stock. (c) No obligation shall be laid upon any participating country under this article without the consent of that country. Article 25 OPERATION OF THE BUFFER STOCK (a) The Manager shall, in conformity with article 13 and within the provisions of the Agreement and the frame-work of instructions of the Council, be responsible to the Executive Chairman for the operation of the buffer stock. (£>) For the purposes of this article, the market price of tin shall be the price of cash tin on the London Metal Exchange or such other price or prices as the Council may from time to time determine. 151 (c) If the market price of tin: (i) Is equal to or greater than the ceiling price the Manager shall, unless otherwise instructed by the Council, if he has tin at his disposal and subject to articles 26 and 27, ofer tin for sale on the London Metal Exchange at the market price, until the market price of tin fals below the ceiling price or the tin at his disposal is exhausted; (ii) Is in the upper sector of the range between the floor and ceiling prices, the Manager may operate on the London Metal Exchange at the market price if he considers it necessary to prevent the market price from rising too steeply, provided he is a net seler of tin; (iii) Is in the middle sector of the range between the floor and ceiling prices, the Manager may buy and/or sel tin only on special authorization by the Council; (iv) Is in the lower sector of the range between the floor and ceiling prices, the Manager may operate on the London Metal Exchange at the market price if he considers it necessary to prevent the market price from falling too steeply, provided he is a net buyer of tin; (v) Is equal to or less than the floor price, the Manager shall, unless otherwise instructed by the Council, if he has funds at his disposal and subject to articles 26 and 27, ofer to buy tin on the London Metal Exchange at the floor price until the market price of tin is above the floor price or the funds at his disposal are exhausted. (d) When under the provisions of paragraph (c) of this article the Manager may buy (or sell, as the case may be) tin on the London Metal Exchange, he may buy (or sell, . as the case may be) tin on any other established market for tin, provided that he may not engage in forward trans-actions unless these will be completed before the termin-ation of this Agreement. Article 26 RESTRICTION OR SUSPENSION OF BUFFER-STOCK OPERATIONS: ACTION BY THE COUNCIL (a) Notwithstanding the provisions of sub-paragraphs (ii) and (iv) of paragraph (c) of article 25, the Council may restrict or suspend forward transactions of tin when the Council considers it necessary to achieve the purposes of this Agreement. (b) Notwithstanding the provisions of sub-paragraphs (i) and (v) or paragraph (c) of article 25, the Council, if in session, may restrict or suspend the operations of the bufer stock if, in its opinion, the discharge of the obliga-tions laid upon the Manager by those sub-paragraphs will not achieve the purposes of this Agreement. (c) The Council may confirm any restriction or suspen-sion under paragraph (a) of article 27 or, where a restric-tion or suspension has been revoked by the Executive Chairman under paragraph (b) of article 27, may restore such restriction or suspension. If the Council does not come to a decision, bufer-stock operations shal be resum-ed or continue without restriction, as the case may be. (d) So long as any restriction or suspension of the ope-rations of the bufer stock determined in accordance with this article or article 27 remains in force, the Council shal review this decision at intervals of not longer than six weeks. If at a meeting to make such a review the Council does not come to a decision in favour of the continuation of the restriction or suspension, bufer-stock operations shal be resumed. Article 27 RESTRICTION OR SUSPENSION OF BUFFER-STOCK OPERATIONS: ACTION BY T i re EXECUTIVE CHAIRMAN (a) At such times as the Council is not in session, the power to restrict or suspend operations under paragraph (b) of article 26 shal be vested in the Executive Chairman. (b) The Executive Chairman may at any time revoke a restriction or suspension which he has decided by virtue of the power vested in him under paragraph (a) of this article. (c) Immediately after a decision by the Executive Chair-man to restrict or suspend the operations of the bufer stock under the powers vested in him under paragraph (a) of this article, he shal convene a meeting of the Coun-cil to review such decision. Such meeting shal be held within fourteen days after the date of the restriction or suspension. Article 28 OTHER OPERATIONS OF THE BUFFER STOCK (d) The Council may, under given circumstances, authorize the Manager to buy tin from, or sel tin to or for the account of, a governmental non-commercial stock in accordance with the provisions of article 40. The provi-sions of paragraph (c) of article 25 shal not apply to tin metal for which such authorization has been given. (b) Notwithstanding the provision of articles 25, 26 and 27 the Council may authorize the Manager, if his funds are inadequate to meet his operational expenses, to sel sufficient quantities of tin at the current price to meet expenses. Article 29 THE BUFFER STOCK AND CHANGES IN EXCHANGE RATES (a) The Executive Chairman may convene, or any par-ticipating country may request him to convene, a meeting of the Council immediately to review the floor and ceiling prices if the Executive Chairman or the participating country, as the case may be, considers that changes in xchange rates make such a review necessary. Meetings may be convened under this paragraph by less than seven days' notice. > : - 152 -(b) In the circumstances set forth in paragraph (a) of this article, the Executive Chairman may, pending the meeting of the Council referred to in that paragraph, pro-visionaly restrict or suspend the operations of the bufer stock if such a restriction or suspension is in his opinion necessary to prevent buying or seling of tin by the Mana-ger to an extent likely to prejudice the purposes of this Agreement. (c) The Council may restrict or suspend or confirm the restriction or suspension of bufer-stock operations under this article. If the Council does not come to a decision, bufer-stock operations, if provisionaly restricted or sus-pended, shal be resumed. (d) Within thirty days of its decision to restrict or suspend or to confirm the restriction or suspension of bufer-stock operations under this article, the Council shal consider the determination of provisional floor and ceiling prices and may determine these prices. (e) Within ninety days from the establishment of pro-visional floor and ceiling prices, the Council shal review these prices and may determine new floor and ceiling prices. (J) If the Council does not determine provisional floor and ceiling prices in accordance with paragraph (d) of this article, it may at any subsequent meeting determine what the floor and ceiling prices shal be. (g) Bufer-stock operations shal be resumed on the basis of such floor and ceiling prices as are determined in accordance with paragraphs (d), (e) or (f) of this article, as the case may be. Article 30 LIQUIDATION OF THE BUFFER STOCK -ON THE TERMINATION OF THE AGREEMENT (a) When fixing the total permissible export tonnage for any control period in accordance with the provisions of article 33, the Council shall, in the light of consideration given to the renewal of the Agreement under paragraph (c) of article 53, decide whether there is need to reduce the tonnage of tin metal currently held in the bufer stock. In such case, the total permissible export tonnage may be fixed at such figure, lower than the figure which the Coun-cil would otherwise have fixed as the total permissible export tonnage for that period, as the Council may decide. (b) Within the framework of instructions of the Coun-cil, the Manager may sel from the bufer stock at any price, being the current market price but not less than the floor price, the quantities of tin metal by which the Coun-cil has reduced the total permissible export tonnages in accordance with the provisions of paragraph (a) of this article. (c) On the termination of this Agreement all bufer-stock operations under articles 25, 26, 27, 28, 29 or paragraph (b) of this article shal cease. The Manager shal thereafter make no further purchase of tin metal and may sel tin metal only as authorized by paragraph (a) of article 31 and paragraph (c) of article 32 or by the Council under paragraph (d) of this article. (d) Unless the Council from time to time substitutes other arangements for those contained in articles 31 and 32, the Manager shall, in connexion with the liquidation of the bufer stock, take the steps set out in articles 31 and 32 and annex H. Article 31 LIQUIDATION PROCEDURE (a) As soon as possible after the termination of this Agreement, the Manager shal make an estimate of the total expenses of liquidation of the bufer stock in accord-ance with the provisions of this article and shal set aside fr m the balance remaining in the Bufer Stock Account a sum which is in his opinion sufficient to meet such expenses. Should the balance remaining in the Bufer Stock Account be inadequate to meet such expenses, the Manager shal sel a sufficient quantity of tin metal to provide the addi-tional sum required. (b) Subject to and in accordance with the terms of this Agreement, the share of each contributing country in the bufe  stock shal be refunded to that country. (c) (i) The share of each contributing country shal be ascertained in accordance with annex H; (ii) Upon the request of all contributing countries, the Council shal revise annex H. Article 32 ALLOCATION AND PAYMENT OF PROCEEDS • ' . • OF LIQUIDATION (a) Subject to the provisions of paragraph (a) of article 31 the share of each contributing country in the cash and tin metal available for distribution in accordance with annex H shal be alocated to it, provided that if any con-tributing country has forfeited-the whole or part of its rights to participate in the proceeds of the liquidation of the bufer stock by virtue of articles 17, 23, 33, 42, 43 or 52, it shal to that extent be excluded from the refund of its share and the resulting residue shal be apportioned betw n the other contributing countries in the manner laid down in clause (iv) of annex H for the apportionment of a deficit. (b) The ratio of tin metal to cash alocated to each con-tributing country under the provisions of paragraphs (b) and (c) of article 31 and (a) of this article shal be the same. (c) Each contributing country shal be repaid the cash alocated to it as the result of the procedure set out in annex H. To this effect, either: (i) The tin metal so alocated to each contributing country may be transferred in such instalments and over such period as the Council may deem appro-priate, but in any case not exceeding twenty-four months; or (ii) At the option of any contributing country any such instalment may be sold and the net proceeds of such sale paid to that country. - 153 -(d) When all the tin metal has been disposed of in accordance with paragraph (c) of this article, the Manager shall distribute among contributing countries any balance remaining of the sum set aside under paragraph (a) of article 31 in the proportions allocated to each country in accordance with paragraph (c) of article 31 and annex H. CHAPTER IX — EXPORT CONTROL Article 33 ASSESSMENT OF EXPORT CONTROL (a) In the light of its examination of the estimates of production and consumption made under paragraph (e) of article 8 and taking account of the quantity of tin metal and cash held in the buffer stock, the quantity, availability and probable trend of other stocks, the trade in tin, the current price of tin metal and any other relevant factors, the Council may from time to time determine the quanti-ties of tin which may be exported from producing coun-tries in accordance with the provisions of this article and , may declare a control period and shall, by the same reso-lution, fix a total permissible export tonnage for that con-trol period. In fixing such tonnage, it shall be the duty of the Council to adjust supply to demand so as to maintain the price of tin metal between the floor and ceiling prices. The Council shall also aim to maintain available in the buffer stock tin metal and cash adequate to rectify any discrepancies between supply and demand which may arise through unforeseen circumstances. (6) The control periods shall correspond to the quarters, provided that, on any occasion when the limitation of exports is being introduced for the first time during the currency of this Agreement or is being reintroduced after an interval during which there has been no limitation of exports, the Council may declare as the control period any period not being greater than five months or less than two months, ending on 31 March, 30 June, 30 September or 31 December. (c) The limitation of exports under this Agreement in each control period shall depend on the decision of the Council, and no such limitation shall operate in any period unless the Council has declared it to be a control period and fixed a total permissible export tonnage in respect of it. (d) A control period already declared may be revoked before, or terminated during, the currency of that period by the Council and the period so revoked or terminated shall not be regarded as a control period for the purposes of paragraph (/) and sub-paragraphs (ii), (iii), and (iv) of paragraph (p) of this article. (e) The Council shall not declare a control period un-less it finds that at least 10,000 tons of tin metal are likely to be held in the buffer stock at the beginning of that period, provided that: (i) If a control period is declared for the first time after an interval during which ho limitation of exports was in force, the figure for the purposes of this paragraph shall be 5,000 tons, applicable from the effective date of the control period already declared or as from and to such date or dates as the Council shall decide; and (ii) The Council may by a two-thirds distributed majority reduce in respect of any control period the required tonnage of 10,000 tons or 5,000 tons, as the case may be. (f) A total permissible export tonnage which has become effective shall not cease to be effective during the course of the period to which it relates by reason only of the fact that the buffer-stock holding has fallen below the minimum tonnage of tin metal required under paragraph (e) of this article or any other tonnage substituted therefor under the same paragraph. (g) The Council may declare control periods and fix total permissible export tonnages, notwithstanding the restriction or suspension of buffer-stock operations in accordance with the provisions of articles 26, 27 or 29. (//) A total permissible export tonnage previously fixed under paragraph {a) of this article may be revised by the Council, provided, however, that a total permissible export tonnage may not be decreased during the control period to which it relates. (0 When, under the provisions of paragraph (a) of this article, the Council has declared a control period and has fixed a total permissible export tonnage in respect of that period the Council may at the same time call upon any country invited to the United Nations Tin Conference, 1970, which is also a producer of tin from mines within its territory or territories to put into effect for that period such a limitation of its exports of tin derived from such production as may be agreed to be appropriate between the Council and the country concerned. 0') Notwithstanding the provisions of this article, if, under the Third International Tin Agreement, a total per-missible export tonnage has been fixed in respect of the last quarter of that Agreement and is still effective at the termination of that Agreement: (i) A control period, commencing upon the entry into force of this Agreement, shall be deemed to have been declared under this Agreement; and (ii) The total permissible export tonnage for such con-trol period shall be at a rate proportionate to that fixed by the Third Agreement for the last quarter of that Agreement unless and until revised by the Council in accordance with the provisions of this article: Provided that, if at the time of the first session of the Council under this Agreement less than 10,000 tons of tin metal are held in the buffer stock, the Council shall con-sider the position at its first session and, if a decision to continue the limitation of exports is not reached, the period in question shall cease to be a control period. (k) The total permissible export tonnage for any con-trol period shall be divided among producing countries in proportion to their percentages in annex A or in pro-portion to their percentages in any revised table of per-centages which may be published in accordance with this Agreement, and the quantity of tin so computed in respect - 154 -i of any country for any control period shal be the permis-sible export tonnage of that country for that control period. (/) If, after the entry into force of this Agreement, any country ratifies, approves or accepts, or gives notification of intention to ratify, approve or accept, or accedes to it, as a producing country, or has been approved by the Council for a change in its category from that of a con-suming country to that of a producing country in accord-ance with article 5, the Council, having determined the percentage of that country, shal re-determine the percentages of all the other participating countries in proportion to their current percentages. (m) (i) The Council shal review the percentages of the producing countries and redetermine them in accordance with the rules of annex G. Except for the first redetermination, which shal take place at the first session of the Council, the percentage of a producing country shal not, during any period of twelve months, be reduced by more than one-tenth of its percentage at the commencement of that period. (ii) In any action which it may propose to take in accordance with the rules of annex G, the Counctl shal give due consideration to any circumstances stated by any producing country as being exceptional and may, by a two-thirds distributed majority, waive or modify the full application of those rules. (iii) The Council may, from time to time, by a two-thirds distributed majority revise the rules of annex G, and any such revision shal have efect as if it were included in that annex. (iv) The percentages resulting from the procedure set out in this paragraph shal be published and shal take efect upon the first day of the quarter folowing the date of the decision of the Council in replacement of the percentages listed in annex A. (n) (i) Notwithstanding the provisions of paragraph {k) of this article, the Council may, with the con-sent of a producing country, reduce its share in i the total permissible export tonnage and re-distribute the tonnage of the reduction among the other producing countries in proportion to the percentages of those countries or, if circum-stances so require, in some other manner. (ii) The quantity of tin determined according to sub-paragraph (i) of this paragraph for any producing country for any control period shal for the purposes of this article be deemed to be the permissible export tonnage of that country for that control period. (o) (i) It shal be the duty of any producing country which believes itself unlikely to be able to export in any control period as much tin as it would be entitled to export in accordance with its permissible export tonnage for that control period to make to the Council, as soon as pos-sible but in any case not later than two calendar months after the date upon which such permis-sible export tonnage has become effective, a declaration to that effect. (ii) If the Council has received such a declaration or is of the opinion that any producing country is unlikely to be able to export in any control period as much tin as it would be entitled to export in accordance with its permissible export tonnage, the' Council may increase the total permissible export tonnage for that control period by such a tonnage as will in its opinion ensure that the total permissible export tonnage required will in fact be exported. (p) (i) The net exports of tin from each producing country for each control period shal be limited, except as otherwise provided in this article, to the permissible export tonnage for that country for that control period. (ii) If, notwithstanding the provisions of sub-paragraph (i) of this paragraph, the net exports of tin from a producing country in any control period exceed its permissible export tonnage for that control period by more than five per cent, the Council may require the country concerned to make an additional contribution to the bufer stock not exceeding the tonnage by which such exports exceed its permissible export tonnage. Such a contribution shal be in tin metal or in cash or in such proportions of tin metal and cash and before such date or dates as the Council ': may decide. That part, if any, of the contribu-tion which is to be paid in cash shal be calcu-lated at the floor price in efect on the date of • entry into force of this Agreement. That part, if any, of the contribution which is to be made in tin metal shal be included in and shal not be additional to the permissible export tonnage of the country in question for the control period in which such contribution is made. (iii) If, notwithstanding the provisions of sub-paragraph (i) of this paragraph, the aggregate net exports of tin from a producing country in any four successive control periods including, if appropriate, the control period referred to in sub-paragraph (ii) of this paragraph exceed by more than one per cent the aggregate of its permissible export tonnages for those periods, the permissible export tonnages of that country during each of the four subsequent control periods may be reduced by one-quarter of the aggregate tonnage so over-exported or, if the Council so decides, by any greater fraction not exceeding one-half. Such reduction shal take efect in and from the control period next folow-ing that in which the decision was taken by the Council. (iv) If, after any such four successive control periods (during which the aggregate net exports of tin from a country have exceeded its permissible export tonnage as mentioned in sub-paragraph (iii) of this paragraph), the aggregate net exports _ 1 _ of tin from that country in any four further successive control periods (which shal not include any control period covered by sub-paragraph (iii)) exceed the aggregate of the permissible export tonnages for those four con-trol periods, the Council may, in addition to reducing the total permissible export tonnage of that country in accordance with the provisions of sub-paragraph (iii), declare that the country shal forfeit a part, which shal on the first occasion not exceed one-half, of its rights to participation on liquidation of the bufer stock. The Council may at any time restore to the country concerned the portion of its rights so forfeited on such terms and conditions as it may determine. (v) It shal be the duty of a producing country which has exported a tonnage of tin in excess of its per-missible'export tonnage and of any tonnage per-mited by other provisions of this article to take efective steps to correct its breach of this Agree-ment at the earliest possible opportunity. The Council, when deciding the action to be taken under this paragraph, shal take account of any failure to take steps or delay in doing so. (q) When, by reason of the determination or alteration of the percentage of a producing country or of the with-drawal of a producing country, the total of percentages is no longer one hundred, the percentage of each other producing country shal be proportionately adjusted so that the total of percentages is restored to one hundred. The Council shal then publish as soon as possible the revised table of percentages which shal come into force for the purposes of export control with efect from the first day of the control period folowing that in which the decision to revise percentages was taken. (r) Each producing country shal take such measures as may be necessary to maintain and enforce the provisions of this article so that its exports shal correspond as closely as possible to its permissible export tonnage for any control period. (j) For the purposes of this article, the Council may decide that exports of tin from any producing country shal include the tin content of any material derived from the mineral production of the country concerned. (f) Tin shal be deemed to have been exported if, in the case of a country named in annex C, the formalities set out in that annex opposite the name of that country have been completed, provided that: (i) The Council may, from time to time, with the con-sent of the country concerned, revise annex C and any such revision shal have efect as if it were included in that annex; (ii) If any tin shal be exported from any producing country by any method which is not provided for by annex C, the Council shal determine whether such tin shal be deemed to have been exported for the purposes of this Agreement and, if so, the time at which such export shal be deemed to have taken place. («) For the purposes of sub-paragraphs (ii), (iii) and (iv) of paragraph (p) of this article, control periods for which total permissible export tonnages have been fixed and penalties imposed under article VII of the Third Agreement shal be deemed, as from the entry into force f this Agreement, to have been fixed or imposed under this article. Article 34 SPECIAL EXPORTS (a) At any time when it has declared a control period, the Council, if it considers that the conditions in annex D are satisfied, may by a two-thirds distributed majority permit the export (hereinafter caled a special export) of a specified quantity of tin in addition to the permissible export amount referred to in paragraph (k) of article 33. (b) The Council may by a two-thirds distributed majo-rity impose such conditions upon a special export as it deems necessary. (c) If the provisions of article 36 and the conditions imposed by the Council under paragraph (b) of this article are fulfilled, a special export shal not be taken into account when the provisions of paragraphs (n), (o) and (p) of article 33 are being applied. . (d) The Council may by a two-thirds distributed majo-rity at any time revise the conditions in annex D, pro-vided that any such revision shal be without prejudice to anything done by a country in pursuance of permission given and conditions already imposed under paragraph (b) of this article. Article 35 SPECIAL DEPOSITS (a) A producing country may at any time with the consent of the Council make special deposits of tin metal with the Manager. A special deposit shal not be treated as part of the bufer stock and shal not be at the disposal of the Manager. (b) A producing country which has informed the Coun-cil of its intention of making a special deposit of tin metal originating within that country shall, subject to furnish-ing such evidence as the Council may require to identify the metal or the concentrates exported with the tin metal whic  is the subject of the special deposit, be permited to export such metal or concentrates in addition to any permissible export amount that may have been alocated to that country under article 33 and, subject to the com-pliance by the producing country with the requirements of article 36, paragraphs (n), (o) and (p) of article 33 shal not apply to such exports. (c) Special deposits may be accepted by the Manager only at such place or places as may be convenient to him. (d) The Executive Chairman shal notify the participat-ing countries of the receipt of any such special deposit, but not sooner than three months after the date of receipt. ( ) A producing country which has made a special d posit of tin metal may withdraw the whole or part of that special deposit in order to fulfil the whole or part of - 156 -its permissible export amount in any control period. In such a case the amount withdrawn from the special deposit shal be regarded as having been exported for the purposes of article 33 in the control period in which the with-drawal was made. (J) In any quarter which has not been declared a con-trol period any special deposit shal be at the disposal of the country which has made the deposit, subject only to the provisions of paragraph (h) of article 36. (g) All charges incurred in connexion with any special deposit shal be borne by the country making the deposit and no charges shal be borne by the Council. CHAPTER X — STOCKS Article 36 STOCKS IN PRODUCING COUNTRIES (a) (i) The stocks of tin within any producing country which have not been exported within the defini-tion for that country contained in annex C shal not at any time during a control period exceed the tonnage shown against that country in annex E; (ii) Such stocks shal not include tin in the course of transport between the mine and the point of export as defined in annex C; (iii) The Council may revise annex E but, if in doing so it has increased the tonnage listed in annex E against any country, it may impose conditions, including conditions as to period and subse-quent export, in relation to any such addition. (b) Any increase in the proportion approved under paragraph 2 of article XIV of the Third Agreement and still operative at the termination of that Agreement and any conditions imposed in connexion therewith shal be deemed to have been approved or imposed under this Agreement unless the Council otherwise decides within six months after the entry into force of the Agreement. (c) Any special deposit made under article 35 shal be deducted from the amount of stocks permited under this article to be held during a control period within the pro-ducing country concerned. (d) (i) Where in a producing country mentioned in annex F tin ore is unavoidably extracted from its natural occurrence in the mining of the other minerals mentioned in that annex and for that reason the limitation of stocks prescribed in paragraph (a) of this article would unreasonably restrict the mining of those other minerals, addi-tional stocks of tin-in-concentrates may be held within that country to the extent that these are certified by the Government of that country as having been won exclusively in association with those other minerals and actualy retained in that country, provided that the proportion which such additional stocks bear to the total amount of the other minerals mined shal not at any time exceed the proportion stated in annex F; (ii) Except with the consent of the Council, the export of such additional stocks shal not com-mence until after the liquidation of all the tin metal in the bufer stock and the rate of export thereafter shal not exceed one-fortieth of the whole or 250'tons, whichever is the greater, in each quarter. (e) Countries listed in annex E or annex F shall, in consultation with the Council, make regulations govern-ing the maintenance, protection and control of such addi-tional stocks. (J) The Council may, with the consent of the producing country concerned, revise annex E and annex F. (g) Each producing country shal forward to the Coun-cil at such intervals as the Council may require statements as to the stocks of tin within its territory which have not been exported in accordance with the definition for that country in annex C. Such statements shal not include tin in course of transport between the mine and the point of export as defined in annex C. These statements shal show separately the stocks held under paragraph (d) of this article. (/;) A country which holds special deposits under article 35 or is permited to increase tonnages in accord-ance with the provisions of paragraph (a) of this article shall, not later than twelve months before the termination of this Agreement, inform the Council of its plans for the export of such special deposits and of all or part of such increased tonnages (but not including additional stocks whose export is governed by paragraph (</) of this article) and shal consult with the Council as to the best means of making such export without avoidable disruption of the. tin market and in harmony with the provisions for the liquidation of the bufer stock under article 30. The pro-ducing country concerned shal give due consideration to the recommendations of the Council. CHAPTER XI — TIN SHORTAGE Article 37 ACTION IN THE EVENT OF A TIN SHORTAGE (a) If at any time the Council concludes that a serious shortage of supplies of tin has developed or is likely to develop, the Council shal make whatever inquiries are necessary in order to enable it to estimate total require-ments and availability of tin for such periods as it shal determine. (b) If studies and inquiries, together with pertinent factors, confirm the danger of a tin shortage, the Council: (i) Shal recommend to the participating countries that they initiate action to ensure as rapid an increase as possible in the amount of tin which they may be able to make available; - 157 -(ii) May invite the participating countries to enter into such arangements with it as may assure consum-ing countries an equitable distribution of the available supplies of tin; and (iii) Shal observe the behaviour of the market at all times with a view to preventing any tin shortage. CHAPTER XII — MISCELLANEOUS PROVISIONS Article 38 FAIR LABOUR STANDARDS The participating countries declare that, in order to avoid the depression of living standards and the introduc-tion of unfair competitive conditions in world trade, they will seek to ensure fair labour standards in the tin indus-try. Article 39 GENERAL PROVISIONS (a) Participating countries shal during the currency of this Agreement use their best endeavours and co-operate to promote the atainment of its objectives. (b) The participating countries undertake to accept as binding all decisions of the Council under this Agree-ment. (c) Without prejudice to the general scope of paragraph (a) of this article, participating countries shal in particular observe the folowing: (i) They shal not, so long as sufficient quantities of tin are available to meet their full requirements, prohibit o.r limit the use of tin for specified end-uses except in circumstances in which such prohi-bition or limitation would not be inconsistent with other international agreements on trade; (ii) They shal create conditions which would promote the transfer of tin production from less efficient to more efficient enterprises; and (iii) They shal encourage the conservation of the natu-ral resources of tin by preventing the premature abandonment of deposits. Article 40 DISPOSAL OF TIN FROM NON-COMMERCIAL STOCKPILES (a) A participating country desiring to dispose of tin from non-commercial stockpiles shall, at adequate notice, consult with the Council concerning its disposal plans. (b) At the time a participating country gives notice of a plan to dispose of tin from non-commercial stockpiles, the Council shal promptly enter into official consultations on the plan with that country for the purpose of assuring adequate fulfilment of the provisions of paragraph (d) of this article. (c) The Council shal from time to time review the progress of such disposals and may make recommenda-tions to the disposing participating country. (d) The disposals shal be made with due regard to the protection of producers, processors and consumers against avoidable disruption of their usual markets. Account shal also be taken of the consequences of such disposals on the investment of capital in exploration and development of new supplies and the health and growth of tin mining in the producing countries. The disposals shal be in such amounts and over such periods of time as will not interfere unduly with production and employ-ment in the tin industry in the producing countries and as will avoid creating hardships to the economies of the participating producing countries. Article 41 NATIONAL SECURITY PROVISIONS (a) Nothing in this Agreement shal be construed: (i) To require a participating country to furnish any information the disclosure of which it considers contrary to its essential security interests; (ii) To prevent a participating country from taking, either singly or with other countries, any action which it considers necessary for the protection of its essential security interests where such action relates to traffic in arms, ammunition or imple-ments of war, or to traffic in other goods and mate-rials carried on directly or indirectly for the pur-pose of supplying a military establishment of any country, or is taken in time of war or other emer-gency in international relations; v (iii) To prevent a participating country from entering into or carrying out any inter-governmental agreement (or other agreement on behalf of a country for the purpose specified in this paragraph) made by or for a military establishment for the purpose of meeting essential requirements of the national security of one or more of the countries participating in such agreements; or (iv) To prevent a participating country from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security. (b) Participating countries shal notify the Executive Chairman as soon as possible of any action they take re-specting tin in consequence of sub-paragraph (ii) or (iv) of paragraph (a) of this article and the Executive Chairman shal so notify other participating countries. (c) Any participating country which considers its eco-nomic interests under this Agreement seriously injured by action taken by any other participating country or countries, other than action taken in time of war, under th  provisions of paragraph (a) of this article, may com-plain to the Council. (d) On receipt of such a complaint the Council shal review the facts of the situation and shal by a majority of the total votes held by all consuming countries and a majority of the total votes held by all the producing coun-tries decide whether the complainant country is justified in its complaint and shall, if it so decides, permit the com-plainant country to withdraw from this Agreement. CHAPTER Xni — COMPLAINTS AND DISPUTES Article 42 COMPLAINTS (a) Any complaint that any participating country has commited a breach of this Agreement for which a remedy is not provided elsewhere in this Agreement shall, at the request of the country making the complaint, be referred to the Council for a decision. (b) Save where otherwise provided in this Agreement, no participating country shal be found to have commited a breach of this Agreement unless a resolution to that efect is passed. Any such finding shal specify the nature and extent of the breach. (c) If the Council finds under this article that a parti-cipating country has commited a breach of this Agree-ment, the Council may, unless some other penalty is provided elsewhere in this Agreement, deprive the country concerned of its voting and other rights until it has reme-died the breach or has otherwise fulfilled its obligations. (d) For the purposes of this article the expression "breach of this Ag-cement" shal be deemed to include the breach of any condition imposed by the Council or failure to fulfil any obligation laid upon a participating country in accordance with this Agreement. Article 43 DISPUTES (A) Any dispute concerning the interpretation or appli-cation of this Agreement which is not setled by negotia-tion shall, at the request of any participating country, be referred to the Council for decision. (b) Where a dispute has been referred to the Council in accordance with this article a majority of participating countries or any participating countries holding not less than one-third of the votes in the Council may require the Council, after full discussion, to seek the opinion of the advisory panel referred to in paragraph (c) of this article on the issues in dispute before giving its decision. (c) (i) Unless the Council, by a unanimous decision of votes cast, agrees otherwise, the panel shal consist of: Two persons, one having wide experience in maters of the kind in dispute and the other having legal standing and experience, nomi-nated by the producing countries; Two such persons nominated by the consuming countries; and A chairman selected unanimously by the four persons nominated above or, if they fail to ,; agree, by the Executive Chairman. (ii) Persons appointed to the advisory panel shal act in their personal capacity and without in-structions from any Government; (iii) The expenses of the advisory panel shal be paid by the Council. • (d) The opinion of the advisory panel and the reasons therefor shal be submited to the Council which, after considering all the relevant information, shal decide the dispute. CHAPTER XIV — FINAL PROVISIONS Article 44 SIGNATURE This Agreement shal be open for signature in London with the Government of the United Kingdom of Great Britain and Northern Ireland (hereinafter referred to as "the depositary Government") from 1 July 1970 to 29 January 1971 inclusive, on behalf of countries partici-pating in the Third International Tin Agreement and on behalf of Governments of independent States represented at the United Nations Tin Conference, 1970. Article 45 RATIFICATION, APPROVAL, ACCEPTANCE This Agreement shal be subject to ratification, appro-val or acceptance by the signatory Governments in accord-ance with their respective constitutional procedures. Ins-truments of ratification, approval or acceptance shal be deposited with the depositary Government. Article 46 DEFINITIVE ENTRY INTO FORCE (a) This Agreement shal, for the Governments which have deposited instruments of ratification, approval or acceptance, enter into force definitively as soon after 30 June 1971 as such instruments have been deposited on behalf of Governments representing at least six produc-ing countries as set out in annex A holding together at least 950 of the votes set out in that annex and at least ine consuming countries as set out in annex B holding together at least 300 of the votes set out in that annex. (b) For the signatory Government which has deposited a  instrument of ratification, approval or acceptance after the definitive entry into force of this Agreement, this Agree-ent shal enter into force definitively on the date of the deposit of such instrument. (c) If this Agreement has entered into force provision-ally under paragraph (a) of article 47, then as soon as instruments of ratification, approval or acceptance have been deposited on behalf of Governments representing countries satisfying the conditions laid down in para-graph (a) of this article, it shall enter into force definiti-vely for those Governments. (d) If this Agreement has entered into force definitively under paragraph (a) or paragraph (c) of this article, and if any Government which has given a notification of inten-tion to ratify, approve or accept has failed to deposit an instrument of ratification, approval or acceptance within a period of ninety days from the date of definitive entry into force, that Government shall cease to participate in this Agreement, provided that the Council may extend the period aforesaid if so requested by that Government, and further provided that that Government may cease to participate in the Agreement before the expiry of the period aforesaid or any extension thereof by giving to the depositary Government at least thirty days' notice. Article 47 PROVISIONAL ENTRY INTO FORCE (a) (i) If the conditions for the definitive entry into force of this Agreement laid down in paragraph (a) of article 46, have not been satisfied, this Agreement shall, for the Governments which have deposited instruments of ratification, approval or acceptance or have given notifica-tion of intention to ratify, approve or accept, enter into force provisionally on the day follow-ing the date of termination of the Third Agree-ment, provided that such instruments or notifi-cations have been deposited with the depositary Government: , By 30 June 1971 or, if the Third Agreement is extended, by the date of termination of that Agreement; and On behalf of Governments representing at least six producing countries as set out in annex A holding together at least 950 of the votes set out in that annex, and at least nine consum-ing countries as set out in annex B holding together at least 300 of the votes set out in that annex. (ii) For each signatory Government which has deposited an instrument of ratification, appro-val or acceptance of, or has given notification of intention to ratify, approve or accept, this Agreement while it is provisionally in force, the Agreement shall enter into force provisionally on the date of the deposit of such instrument or notification. (b) If, within six months after the termination of the Third Agreement, this Agreement has entered into force provisional^ but not definitively as laid down in article 46, the Executive Chairman shall as soon as possible convene a meeting nr meetings of the Council to consider the posi-tion. If, however, the entry into force remains provisional the Agreement shall be terminated not later than one year after the provisional entry into force. Article 48 ACCESSION (a) Any Government represented at the United Nations Tin Conference, 1970, or any participating country in the Third International Tin Agreement shall have the right to accede to this Agreement upon conditions to be deter-mined by the Council. (b) Any other Government not represented at the United Nations Tin Conference, 1970, which is a Member of the United Nations or a member of its specialized agencies may upon conditions to be determined by the Council accede to this Agreement. (c) The conditions laid down by the Council shall be equitable, in respect of voting rights and financial obli-gations, as between the countries seeking to accede and other countries already participating. (d) Upon the accession of a producing country to this Agreement the Council (i) shall fix, with- the consent of that country, the tonnages and proportions to be shown against that country in annexes E and F where appro-priate and (ii) shall also fix the circumstance for the pur-pose of export control to be shown against the name of that country in annex C, part one. The tonnage, proportion or description so fixed shall have effect as though it were included in such annexes. (e) Accession shall be effected by the deposit of an instrument of accession with the depositary Government, which shall notify all interested Governments and the Council of such accession. Article 49 SEPARATE PARTICIPATION A Contracting Government may, at the time of deposit-ing its instrument of ratification, approval, acceptance or accession, or giving notification of intention to ratify, approve or accept or at any time thereafter, propose the separate participation as a producing or as a consuming country, as may be appropriate, of any territory or terri-tories, interested in the production or consumption of tin, for whose international relations the Contracting Govern-ment is responsible and to which the Agreement applies or will apply when the Agreement enters into force. Such separate participation shall be subject to the consent of the Council and to the conditions which the Council may determine. Article 50 An inter-governmental organization having responsibi-lities in respect of the negotiation of international Agree-ments may participate in the International Tin Agree-- 160 -ment. Such an organization shall not itself have the right to vote. On matters within its competence the voting rights of its member States may be exercised collectively. Article 51 AMENDMENTS (a) The Council may, by a two-thirds majority of the total votes held by all producing countries and a two-thirds majority of the total votes held by all consuming countries, recommend to Contracting Governments amendments to this Agreement. The Council shall, in its recommendation, fix the time within which each Contract-ing Government shall notify the depositary Government whether or not it ratifies, approves or accepts the amend-ment. (b) The Council may extend the time fixed by it under paragraph (a) of this article for notification of ratification, approval or acceptance. (c) If, within the time fixed under paragraph (a) of this article or extended under paragraph (b) of this article, an amendment is ratified, approved or accepted by all par-ticipating countries it shall take effect immediately on the receipt by the depositary Government of the last ratifi-cation, approval or acceptance. (d) If, within the time fixed under paragraph (a) of this article or extended under paragraph (b) of this article, an amendment is not ratified, approved or accepted by par-ticipating countries holding all of the votes of producing countries and by participating countries holding two-thirds of the total votes of all consuming countries, it shall not take effect. (e) If, by the end of the time fixed under paragraph (a) of this article or extended under paragraph (b) of this article, an amendment is ratified, approved or accepted by participating countries holding all of the votes of pro-ducing countries and by participating countries holding two-thirds of the total votes of all consuming countries: (i) The amendment shall, for the participating coun-tries by which ratification, approval or acceptance has been signified, take effect at the end of three months next following the receipt by the depositary Government of the last ratification, approval or acceptance necessary to comprise all of the votes of producing countries and two-thirds of the total votes of all consuming countries; (ii) Any Contracting Government which does not ratify, approve or accept an amendment by the date of its coming into effect shall as of that date cease to participate in the Agreement, unless any such Contracting Government satisfies the Council at its first meeting following the effective date of the amendment that its ratification, approval or acceptance could not be secured in time by reason of constitutional difficulties, and the Council decides to extend for such Contracting Government the period fixed for ratification, approval or accept-ance until these difficulties have been overcome. (/) If a consuming country considers that its interests will be adversely affected by an amendment it may, before the date of its coming into effect, give notice to the depo-sitary Government of withdrawal from the Agreement. Withdrawal shall become effective on the effective date of the amendment. The Council may, at any time, on such terms and conditions as it considers equitable, permit such country to withdraw its notice of withdrawal. (g) Any amendment to this article shall take effect only if it is ratified, approved or accepted by all participat-ing countries. (h) The provisions of this article shall not affect any power under this Agreement to revise any annex to this Agreement. Article 52 WITHDRAWAL A participating country which withdraws from this Agreement during its currency, except (i) In accordance with the provisions of paragraph (d) of article 41 or paragraph (J) of article 51; or (ii) Upon at least twelve months' notice being given to the depositary Government not earlier than one year after the entry into force of this Agreement, shall not be entitled to any share of the proceeds of the liquidation of the buffer stock under the terms of article 31 or 32 nor shall it be entitled to a share of the other assets of the Council under the terms of article 53 on the termination of this Agreement. Article 53 DURATION, EXTENSION AND TERMINATION {a) The duration of this agreement shall, except as otherwise provided in this article or in paragraph (b) of article 47, be five years from the date of entry into force. (b) The Council may, by a two-thirds majority of the total votes held by all producing countries and a two-thirds majority of the total votes held by all consuming countries, extend the duration of this Agreement by a period or periods not exceeding twelve months in all. (c) The Council, in a recommendation to the Contract-ing Governments, not later than four years after the entry into force of this Agreement, shall inform them whether it is necessary and appropriate that this Agreement should be renewed and, if so, in what form; it shall at the same time consider what the relationship between the supply of and demand for tin is likely to be at the expiration of this Agreement. (d) (i) A Contracting Government may at any time give notice in writing to the Executive Chairman that it intends to propose at the next meeting of the Council the termination of the Agreement; (ii) If the Council, by a two-thirds majority of the total votes held by all producing countries and by all consuming countries, adopts the proposal - 161 -to terminate, it shal recommend to the Contract-ing Governments that this Agreement shal ter-minate; (iii) If Contracting Governments holding two-thirds of the total votes of all producing coun-tries and two-thirds of the total votes of all consuming countries notify the Council that they accept that recommendation, this Agreement shal terminate on the date the Council shal decide, being a date not later than six months after the receipt by the Council of the last of the notifications from those Contracting Govern-ments. (e) The Council shal remain in being for as long as may be necessary for the carrying out of paragraph (/") of this article, for the supervision of the liquidation of the bufer stock and any stocks held in producing countries in accordance with article 36 and for the supervision of the due performance of conditions imposed under this Agree-ment by the Council or under the Third Agreement; the Council shal have such of the powers and functions con-ferred on it by this Agreement as may be necessary for the purpose. (f) On termination of this Agreement: (i) The bufer stock shal be liquidated in accordance with the provisions of articles 30, 31 and 32; (ii) The Council shal assess the Obligations into which it has entered in respect of its staff and shall, if necessary, take steps to ensure that, by means of a supplementary estimate to the Administrative Account raised in accordance with articles 15 and 16, sufficient funds are made available to meet such obligations; (iii) After all liabilities incurred by the Council, other than those relating to the bufer-stock account, have been met, the remaining assets shal be dispos-ed of in the manner laid down in this article. (g) If the Council is continued or if a body is created to succeed the Council, the Council shal transfer its archives, statistical material and such other documents as the Coun-cil may determine to such successor body and may by a distributed two-thirds majority transfer all or any of its remaining assets to such successor body. (/;) If the Council is not continued and no successor body is created: (i) The Council shal transfer its archives, statistical material and any other documents to the Secretary-General of the United Nations or to any interna-tional organization nominated by him or, failing such nomination, as the Council may determine; (ii) The remaining non-monetary assets of the Council shal be sold or otherwise realized in such a manner as the Council may direct; and (iii) The proceeds of such realization and any remain-ing monetary assets shal then be distributed in such a manner that each participating country shal receive a share proportionate to the total of the contributions which it has made to the Administra-tive Account established under article 15. Article 54 NOTIFICATIONS BY THE DEPOSITARY GOVERNMENT The depositary Government shal notify all Govern-ments represented at the United Nations Tin Conference, 1970, all Governments members of the Third International Tin Agreement, all Governments which have acceded to thi  Agreement in accordance with the provisions of aricl  48, the Secretary of the Council and the Secretary-General of the United Nations of the folowing: (i) Signatures, ratifications, approvals, acceptances and notifications of intention to ratify, approve or accept, in accordance with articles 44, 45 or 47; (ii) The entry into force of this Agreement, both defi-nitive and provisional in accordance with article 46 or 47; (iii) Accessions and notifications of separate partici-pation, in accordance respectively with article 48 or 49; (iv) Notifications of ratification, approval or accept-ance of amendments and dates of their entry into force, in accordance with article 51; (v) Notifications of withdrawal and of cessation of participation; and (vi) Notifications of the termination of this Agreement, in accordance with article 53. Article 55 CERTIFIED COPY OF THE AGREEMENT As soon as possible after the definitive entry into force of this Agreement, the depositary Government shal send a certified copy of this Agreement in each of the languages mentioned in article 56 to the Secretary-General of the United Nations for registration in accordance with Article 102 of the Charter of the United Nations. Any amendments to this Agreement shal likewise be commu-nicated. Article 56 AUTHENTIC TEXTS OF THE AGREEMENT The texts of this Agreement in the English, French, Russian and Spanish languages are all equaly authentic, the originals being deposited with the Government of the U it d Kingdom of Great Britain and Northern Ireland, which shal transmit a certified copy thereof to each signatory and acceding Government and to the Secretary of the Council. IN WITNESS WHEREOF the undersigned, having been duly authorized to this efect by their respective Governments, hve signed this Agreement on the dates appearing oppo-site their signatures. - 162 -ANNEXES i.-. ANNEX A Percentages and votes of producing countries Country Percentage Votei Initial Additional Total 2.82 5 27 32 16.98 5 164 169 Congo (Democratic Republ ic of) . . . 4.51 5 44 ' 49 9.14 5 88 93 45.83 , 5 442 447 6.36 5 61 66 14.36 5 139 144 TOTAL 100.00 35 • 965 1 000 NOTE —The countries, percentage! and votes listed in this annex are those arrived at during the United Nations Tin Conference, 1970, at which the Fourth International Tin Agreement was drawn up. The list of names and the figures aro subject to revision from time to time in accordance with the operation of the provisions of the Agreement. ANNEX B Tonnages and votes of consuming countries Votes Country Tonnage metric tons Initial Additional Total 600 5 3 8 2 770 5 15 20 254 5 1 6 4 508 5 24 29 284 5 2 7 3 153 5 17 22 737 5 4 9 12010 5 63 68 10 430 5 55 60 1 151 5 6 11 4 234 5 22 . 27 Italy 6319 5 33 38 23 046 5 121 126 1 612 5 8 13 4 555 5 ' 24 29 630 5 3 8 3 470 5 18 23 265 5 , t 6 1 798 5 9 14 914 5 5 10 Uni ted K i n g d o m of Great Br i ta in and 17 705 5 93 98 58 970 5 310 315 U n i o n of Soviet Socialist Republics . . 6 600 5 , 35 40 1 565 5 8 13 TOTAL 167 580 120 880 1 000 NUIE — The countries, wruiages and votes listed ia this snnc* arc those arrived at during the United Nation* Tin Conference, 1970, at which the fourth International Tin Agreement was drawn up. The hit of names and Lhc figures aro subject to revision from lime to lime in accordance with the operation of the provisions of the Agreement. - 163 -ANNEX C Part one Circumstances In which tin shall be deemed to have been exported for the purposes of export control The text of annex C of this Agreement shall be the revised text of annex C in force at the date o f termination of the T h i r d International T i n Agreement. In the case of Austra l ia tin shall be deemed to be exported on the date of shipment shown in the Restricted Goods Export Permit issued under the Customs (Prohibited Exports) Regulations, provided that actual shipment takes place within fourteen days of that date. Part two Imports into producing countries F o r the purpose o f determining net exports of t in under article 33, imports deductible from exports during a control period shall be the amount imported into the producing country concerned during the quarter immediately preceding the declaration of the control period in question, provided that t in imported for smelting and exported shall not be taken into account. ANNEX D Conditions for special exports The condit ions referred to in article 34 are that the proposed special export is destined to form part of a governmental stockpile and unlikely to be used for any commercial or industrial purpose during the currency o f this Agreement. ANNEX E Stocks in producing countries aider article 26 Country , Tonnage metric tons Aust ra l ia » 2 200 B o l i v i a 7511 Congo (Democratic Republ ic of) •  . 2 000 Indonesia 4 126 Malays ia 18 331 Niger ia (Federal Republ ic of) 2 185 Thai land 5 298 ANNEX F Additional stocks won unavoidably Country Other mineral Tin content of concentrates' permitted to be stocked additionally for each ton of other mineral mined (tons) 1.5 1.5 1.5 1.5 - I 6 i * -ANNEX G K-Rules for the redetermination of the percentages of the producing countries Rule 1 The first redetermination of the percentages o f the producing countries shall be made at the first meeting of the Counc i l under this Agreement. This redetermination shall be made on the basis of the last four quarters for which figures of the production o f tin in each of the producing countries are available. Rule 2 Further redetermination of the percentages shall be made at yearly intervals fol lowing the first redetermination, provided that no period subsequent to the quarters referred to in rule 1 shall have been declared to be a control period. Rule 3 Should any period be declared to be a control period, no further redetermination of the percentages shall be made unti l a further four consecutive quarters have not been declared to be control periods; a further redetermination shall then be made as soon as figures for the • product ion of tin in each of the producing countries in such four • consecutive quarters are available; and subsequent redeterminations shall be made at yearly intervals thereafter for as long as no period is declared to be a control period. A similar procedure shall be followed if any subsequent period is declared to be a control period. Rule 4 F o r the purpose o f rules 2 and 3 redeterminations shall be deemed to have been made at yearly intervals i f they are made in the same quarter o f the calendar year as were the preceding redeterminations. Rule 5 A t the first redetermination, made under rule 1, new percentages for the producing countries shall be determined in direct proport ion to the production of tin in each of them during the four quarters referred to i n rule 1. Rule 6 In subsequent redeterminations, made under rule 2, the new percentages shall be calculated as follows: (i) The percentages in the second redetermination shall be in direct proport ion to the production of tin in each o f the producing countries in the latest twenty-four consecutive calendar months for which figures are available; and (ii) The percentages in the third redetermination, and all later redeterminations, shall be in direct proport ion to the produc-tion of tin in each of the producing countries in the latest thirty-six consecutive calendar months for which figures are available. Rule 7 In subsequent redeterminations, made under rule 3, the new percentages shall be 'calculated as follows: (i) The percentages in the first subsequent redetermination shall be in direct proport ion to the sum of the production of tin in each of the producing countries in the latest twelve consecutive calendar months for which figures are available and in the four quarters immediately preceding that control period; and (ii) The percentages in the next following redeterminations, provided 1 that no period shall have been declared to be a control period, shall be in direct proport ion lo the production of tin in each of the producing countries in the latest periods of twenty-four and thirty-six consecutive calendar months respectively for which figures are available. Rule 8 F o r t h e purposes of the foregoing rules, i f any producing country has failed to make available to the C o u n c i l its production figures for any period of twelve consecutive calendar months within one month of the date by which four .producing countries have made their figures available, the production of that country for such period o f twelve months shall be calculated by mult iplying by twelve the average monthly rate of production during the period as shown by such figures as are available and deducting five per cent from the amount so calculated. Rule 9 Figures o f the production of tin in any producing country for any period earlier than forty-two months before the date of any rede-termination shall not be employed in that redetermination. Rule 10 Notwithstanding the provisions of the foregoing rules, the C o u n c i l may reduce the percentage of any producing country which has failed to export the whole o f its permissible export tonnage as deter-mined under paragraph (k) o f article 33 or any greater amount accepted by it under paragraph («) of that article. In considering its decision, the C o u n c i l shall regard as mitigating circumstances that the producing country concerned surrendered under paragraph (n) of article 33 a part of its permissible export tonnage in time for effective steps to be taken by the other producing countries to make good the deficit or that the producing country concerned which has failed to export the amount determined under paragraph (o) o f article 33 has exported the whole of its permissible export amount as determined under paragraph (k) or (n) of article 33. Rule 11 If a reduction i n the percentage of any producing country is made i n accordance with rule 10, the percentage so made available shall be distributed among the other producing countries in proport ion to their percentages current at the date o f the decision to make the reduction. Rule 12 If, by the application of the foregoing rules, the percentage of a producing country is reduced to less than the min imum figure permitted by the operation o f the proviso to paragraph (m) (i) of article 33, then the percentage o f that country shall be restored to such min imum figure and the percentages o f the other producing countries shall be proportionately reduced so that the total o f the percentages is restored to one hundred. Rule 13 F o r the purposes of paragraph (ni) (ii) of article 33, the fol lowing circumstances inter alia may be regarded as exceptional: a national disaster, a major strike which has paralyzed the tin mining industry for a substantial period, a major breakdown of power supplies or o f the main line of transport to the coast. . Rule 14 For the purposes of these rules, the calculation for producing countries which are substantial consumers of tin derived from their domestic mine production shall be based on their exports of tin and not on mine production of tin. In the first redetermination of annex A under rule 1 the calculation in the case of Austra l ia shall be on the basis - 165 -of the last four quarters for which export figures of tin are available provided that the percentage figure arrived at shall be equivalent to a tonnage figure not less than 4,572 tons. Rule IS In this annex the expression "the production of t i n " shall be deemed to refer exclusively to mine production, and smelter produc-tion shall accordingly be ignored. ANNEX H Procedure for ascertaining shares in the buffer stock F o r the purpose o f ascertaining the share of each contributing country in the buffer stock, the Manager shall adopt the fol lowing procedure: (i) The contributions of each contributing country to the buffer stock (excluding any voluntary contribution or part of a voluntary contribution which has been made under para-graph (a) of article 22 and which has been refunded under paragraph (c) o f article 22) shall be evaluated, and for this purpose any contributions or port ion of any contr ibut ion made by a contributing country i n metal shall be calculated at the floor price in effect on the date of entry into force of this Agreement and shall be added to the total contributions made by that country in cash. (ii) A l l the tin metal held by the Manager on the date of termination of this Agreement shall be valued on the basis of the settlement price o f t in on the L o n d o n M e t a l Exchange on that date and an amount to that value shall be added to the total cash held by h im at that date after setting aside a sum as required by paragraph (a) of article 31. „. „ (iii) If the total arrived at under clause (ii) of this annex is greater than the sum total of all the contributions made to the buffer stock by all Ihc contributing countries (calculated in accord-ance with clause (i) of this annex), the surplus shall be appor-tioned among the contributing countries in propor t ion to the total contributions to the buffer stock of each contr ibut ing country multiplied by the number of days that such contr ibu-tions have been a', the disposal of the Manager up to the termination of this Agreement. Fo r this purpose contributions in tin metal shall be calculated in accordance with clause (i) of this annex and each individual contribution (in metal or in cash) shall be multiplied by the number of days that it has been at the disposal of the Manager, and for the purpose o f calculating the number of days that a contr ibution has been at the dispo-^il of the Manager neither the clay on which the contr ibution was received by h im nor the day of the termina-tion of this Agreement shall be counted. The amount o f surplus so apportioned to each contributing country shall be added to the total of the contributions of that country (calculated in accordance with clause (i) o f this annex): provided, however, that in calculating the apportionment of such a surplus a forfeited contr ibution shall not be regarded as having been at the disposal of the Manager during the period o f forfeiture. (iv) I f the total arrived at under clause (ii) of this annex is less than the sum of all the contributions made to the buffer stock by al l the contributing countries, the deficit shall be apportioned among the contr ibut ing countries in propor t ion to their total contr ibut ion. The amount of the deficit so apportioned to each contributing country shall be deducted from the total of the contributions of that country. The contr ibut ion referred to in this clause shall be calculated in accordance with clause (i) of this annex. (v) The result of the foregoing calculation shall in the case of each contributing country be treated as its share of the buffer s tock. - 166 -APPENDIX B : CHART 1: World T i n P o s i t i o n CHART 2 : P r o d u c t i o n of T i n - i n - C o n c e n t r a t e s : Main Produc ing C o u n t r i e s CHART 3: Consumption o f T i n M e t a l : Main C o u n t r i e s Source : ITC S t a t i s t i c a l Yearbook 1968. C H A R T 1 - 167 -W O R L D T I N P O S I T I O N 1 9 5 G - M A production of tin - In - c on c o n t ra t e • 150 r-_I ' 1 t I -1— l u l u k e f r o m c e r t a i n c o nt r o i l y - p l a nnOtl c o u n t r i e s IL Production of primary tin metal CO f— 0 U*/L_J I I 1 I I I ! 1 ! 1 1 1— O u t y o i n y s to c e r t a i n c e n t r a l l y - p l u n n c d c o u n t r i e s Consumption of primary tin metal t i L G . S . A. S a l e s Tin p r i c e s — L o n d o n c a s h lv S i _1 1„_ 1 9 6 5 B u f l c r s t o c k h o l d i n g s r i il._LL C H A R T 2 P R O D U C T I O N OF T IN- IN-CONCENTRATES C I-: A R T 3 C O N S U M P T I O N OF TIN fi'S-TAL: IVlAiN CCUNTHIES 1S5G -1SC-G / A 

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