International Commodity Agreements (Hansard, 21 July 1988)

§ Mr. Alan Clark

Experience with the tin agreement and other commodity agreements has shown that market intervention provisions such as buffer stocks and quota arrangements have severe defects: at best they are of doubtful benefit to producers and consumers and at worst they distort markets fundamentally and carry the risk of disastrous failure. In general, therefore, we are strongly opposed to proposals for new agreements with market intevention provisions and are determined that any renewal of existing ones must be fully justified. Where there are such agreements, our view is that they should be managed under stringent conditions regarding accountability and financing, and operated in conformity with the underlying trends in the market.

The Government's general policy towards commodities is based upon the premise that the best way to assist producers and consumers is to enable markets to work efficiently. We therefore support liberal arrangements and deregulation. We seek to work with our European Community partners to put these principles into practice both in relation to commodity agreements and in the current round of multilateral trade negotiations in GATT 768W which will have an important bearing on wider commodity trade questions of interest to both developed and developing countries.

The Government recognise the economic difficulties of a number of developing countries arising from their heavy dependence on the production of primary commodities. Experience shows that the most effective way of tackling these difficulties is by strengthening and restructuring the economies of the countries concerned. We are contributing to this through our own aid programme and our support for the work of international financial institutions in this field as well as though improving market opportunities for developing countries' goods.