The political economy of North-South commodity bargaining: the case of the International Sugar Agreement

The historically unstable world trade in sugar has long stimulated multilateral efforts to stabilize sugar prices. In the negotiations leading to the International Sugar Agreement (ISA) of 1977, both producers and consumers were willing to make short-term concessions in the interest of reaching an accord that would benefit all in the long run–a pattern that has hardly been typical of North-South bargaining in general. But the ISA has failed to achieve its goal of more stable sugar prices in the years since its enactment. This failure is primarily due not to shortcomings in the agreement itself but rather to a major expansion of production in the only important sugar exporter that failed to ratify the ISA, the European Community. The ISA is important not only in its own right but also because it offers a good example of the promise–and the problems–of international commodity agreements in bringing about more stable and equitable relations between North and South.