International Commodity Agreement
International Commodity Agreement
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Summary of International Commodity Agreement
A multilateral trade agreement aimed at promoting price and supply stability as related to the production of a particular commodity. Such agreements are characterized by the adherence of the principal producing and consuming nations, and the establishment of a commission to ensure the orderly implementation and maintenance of the control features customarily incorporated in the treaty. These controls usually extend to the building of reserve stocks, export and import controls, long-term purchase arrangements, and the fixing of prices. These measures are designed to mitigate major price fluctuations or supply gluts or shortages.
(Main Author: William J. Miller)