Historically, U.S. policy on international commodity agreements has been marked by some ambivalence. Until recently, it has only participated in agreements that are of interest to the United States, particularly the international wheat agreement. Even in the case of sugar (where the United States remains a net importer), it has acted more in a producer than among consumers; Too large a gap between domestic and foreign prices would embarrass the continuation of the national sugar control system. From time to time, the United States has co-ordded the idea of a lead and zinc agreement to end an existing system of unilaterally imposed import quotas, which has caused great irritation in trade relations with Mexico, Peru, Australia and Canada. Preconditions for negotiation. Empirically, if not theoretically, seems to be among the main conditions that must be met for an international conference on raw materials to be concluded for an agreement: the commodity agreements are agreements between producer and consumer countries to stabilize markets and increase average prices. Such agreements are common in many markets, including the coffee, tea and sugar markets. The commodity market is particularly vulnerable to sudden changes in supply conditions, known as supply shocks. Shocks such as bad weather, disease and natural disasters are largely unpredictable and cause high volatility in commodity markets. In comparison, the markets for finished products from these raw materials are much more stable. Alternatives. Various efforts have been made to invent mechanisms other than international commodity agreements, to transfer purchasing power to less developed countries whose incomes have been cyclically or chronically depressed.
Some of these alternatives, such as commodity reserve currency proposals (United Nations, 1964a), would serve the objectives of foreign aid and international monetary “reform” to undermine the role of the price system as the main instrument of economic management in (relatively) free enterprises. Others acting through covert financial transfers (United Nations, 1964 b); Swerling 1964), the great advantage is that the price system, as a leader in economic resources, is not affected to a large extent.