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Cooperation or illusion: an examination of the intergovernmental council of copper exporting countries | International Organization | Cambridge Core

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International Organization
Article

Cooperation or illusion: an examination of the intergovernmental council of copper exporting countries

Abstract

Discussions of international commodity organizations often compare the Organization of Petroleum Exporting Countries (OPEC) and the Intergovernmental Council of Copper Exporting Countries (CIPEC), yet few researchers have examined CIPEC. A comparison of environmental characteristics of copper and petroleum suggests that although copper producers' collusion is possible, it is problematical and depends on political as well as economic factors. Since its formation in 1967, CIPEC members have been engaged in a gradual process of institution-building, although a lack of institutional leadership has hampered collective policy making. Substantively, CIPEC has dealt primarily with three issues: nationalization, technical pricing arrangements, and market regulatory policies. Until 1974, CIPEC members proved incapable of adopting a regulatory policy; they fostered the illusion of impending action and cooperation. Faced with deteriorating market conditions and stimulated by OPEC's success, CIPEC members have initiated a joint policy. The future of CIPEC will depend on its institutional flexibility as well as on decisions of nonmember producers and developed consumer countries.

    Copyright COPYRIGHT: © The IO Foundation 1976 References
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    1 See for example, Bergsten, C. Fred, “The New Era in World Commodity Markets,” Challenge. The Magazine of Economic Affairs (09/10 1974): 34–42; “The Threat from the Third World,” Foreign Policy No. 11 (Summer 1973): 102–24; Krasner, Stephen D., “Oil is the Exception,” Foreign Policy No. 14 (Spring 1974): 68–84; Mikdashi, Zuhayr, “Collusion Could Work,” Foreign Policy No. 14 (Spring 1974): 57–58; Mikesell, Raymond F., “More Third World Cartels Ahead?” Challenge. The Magazine of Economic Affairs (11/12 1974): 24–31.

    2 ‘CIPEC's quota system,” Metal Bulletin No. 5943 (11 22,1974): 20.

    3 These conditions have been suggested in Trade in Primary Commodities. Conflict or Cooperation? A Tripartite Report (Washington, D.C.: The Brookings Institution, c1974), p. 28.

    4 Economic characteristics of copper are compiled from Bohm, Peter, Pricing of Copper in International Trade. A Case Study of the Price Stabilization Problem (Stockholm: The Economic Research Institute at the Stockholm School of Economics, 1968), pp. 11–23, and Brown, Martin S. and Butler, John, The Production, Marketing, and Consumption of Copper and Aluminum (New York: Frederick A. Praeger, c1968), p. 47.

    5 For statistics on foreign exchange and relative production costs of copper, see Mikdashi, Zuhayr, “Collusion Could Work,” Foreign Policy No. 14 (Spring 1974), pp. 64–5.

    6 The economic characteristics of petroleum are found in Mikdashi, Zuhayr, The Community of Oil Exporting Countries. A Study in Governmental Cooperation (Ithaca, New York: Cornell University Press, 1972); Rifai, Taki, The Pricing of Crude Oil. Economic and Strategic Guidelines for an International Energy Policy (New York: Praeger, c1974); Rouhani, Fuad, A History of O.P.E.C. (New York: Praeger, c1971).

    7 “Copper Price Controls: 1840–1965–A history of attempts to control the copper markets,” Copper Studies I No. 20 (02 21, 1974): 3–7.

    8 The most complete source for the activities of the Copper Export Association and Copper Exporters Inc. is United States, Department of the Interior, Report of the Federal Trade Commission on the Copper Industry (U.S. Government Printing Office, 1947), pp. 12–7; 187–91.

    9 “Copper Price Controls: 1840–1965,” Copper Studies I No. 20 (02 21, 1974): 8.

    10 Ibid.

    11 Ibid.

    12 Brown, and Butler, , The Production, Marketing, and Consumption of Copper and Aluminum, pp. 132–3.

    13 “Copper: In constant crisis,” Metals Week 38 No. 9 (02 27, 1967): 19, 21, 23.

    14 “Other Metals Are Making Inroads as the Copper Market Continues Unsettled,” New York Times, January 9, 1967, p. 62.

    15 “Meeting Set in Zambia on Policies for Copper,” New York Times, April 23, 1967, p. 18.

    16 “Four-nation conference leaves a bad taste,” Metals Week 38 No. 24 (07 12, 1967): 5.

    17 Ibid.

    18 “Copper Parley Opens,” New York Times, June 2,1967, p. 65.

    19 “Copper: Winds of changes in Africa.” Metal Bulletin No. 5202 (06 2, 1967): 21.

    20 “Copper floor price in the works”? Metals Week 38 No. 23 (06 5, 1967): 5.

    21 CIPEC, Conference of Ministers, Modification de la Convention du CIPEC (CM/37/74), July 24, 1974.

    22 “Copper: Congo-Chile talks,” Metal Bulletin No. 5310 (07 28, 1968): 22.

    23 “Copper club meets,” Metal Bulletin No. 5353 (11 29, 1968): 18.

    24 CIPEC, An Agreement to Establish the Intergovernmental Council of Copper Exporting Countries 1967.

    25 “CIPEC, Conference of Ministers, Modification de la Convention du CIPEC (CM/37/74), July 24, 1974.

    26 CIPEC, Governing Board, Report of the Executive Committee on the Activities and Structure of the Secretariat (CO/117/71), October 20, 1971, p. 3.

    27 CIPEC, Conference of Ministers, Modification de la Convention du CIPEC (CM/37/74). July 24, 1974.

    28 Ibid.

    29 Interview with Radetzki, Marian, CIPEC, Head, Economic Division, 04 22, 1975.

    30 Statistics on CIPEC personnel and documentation were compiled by the author during a stay at CIPEC's headquarters, Paris, 04 16–25, 1975.

    31 OPEC, Resolutions I–1 (09 1960)–VII–53 (November 1964).

    32 This explanation was suggested during an interview with Radetzki, Marian, CIPEC, Head, Economic Division, 04 22, 1975.

    33 Interview with Radetzki, Marian, CIPEC, Head, Economic Division, 04 22, 1975.

    34 Ferdinand Banks, The World Copper Market. An Economic Analysis (Cambridge, Mass.: Ballinger, c1974), pp. 34–5, and “CSI Survey: CIPEC Africa,” Copper Survey II No. 33 (09 24, 1974): 1–4; 7–10.

    35 Banks, The World Copper Market, pp. 82–5; Bostock, Mark and Harvey, Charles, eds., Economic Independence and Zambian Copper. A Case Study of Foreign Investment (New York: Praeger, c1972), pp. 211–4;“CIPEC contracts-looking ahead,” Copper Studies I No. 13 (11 6, 1973): 8–9.

    36 Banks, The World Copper Market, pp. 76–80; “Chile Anaconda Agree on Terms for a Take-Over,” New York Times, June 27, 1969, p. 1; “Plan on Copper Reported,” New York Times, September 20, 1973, p. 3. For a thorough history of the formation of copper policy in Chile and an interpretation of the interaction of multinational corporations with domestic politics, see Moran, Theodore H., Multinational Corporations and The Politics of Dependence (Princeton: New Jersey: Princeton University Press, c1974).

    37 Banks, The World Copper Market, p. 35; Maidenberg, J., “Peru Will Repay Seized Companies,” New York Times, 02 20, 1974, p. 11.

    38 CIPEC, Report of the Executive Director to the Governing Board 1969, 1970.

    39 CIPEC, Extraordinary Conference of Ministers, Press Release, Measures of Defense and Solidarity (PR/18), December 1, 1972.

    40 CIPEC, Extraordinary Conference of Ministers, Press Release, On the Setting Up of a Permanent Mechanism of Protection and Solidarity in Case of Economic or Commercial Aggression (PR/18), December 1, 1972.

    41 “Copper: Pricing policy change?” Metal Bulletin No. 5272 (02 9, 1968): 31.

    42 “Copper producers,” Metal Bulletin No. 5304 (07 7, 1968): 27.

    43 CIPEC, Committee of Experts, Summary Record and Recommendations to the Executive Committee (COMEXP/30), August 5, 1971.

    44 CIPEC, Committee of Experts, Study of Mechanisms of Limited Intervention on the LME (COMEXP/31), August 27, 1971.

    45 “Copper: The big four speak out,” Metal Bulletin No. 5454 (12 2, 1969): 14.

    46 CIPEC, Governing Board, The Stabilization of the Price of Copper (CO/17/68), November 1968.

    47 CIPEC, Governing Board, Discussions Between Producers and Consumers Concerning the Price of Copper (CO/47/69), May 8, 1969.

    48 CIPEC, Conference of Ministers, Press Release (PR10), November 30, 1970.

    49 CIPEC, Conference of Ministers, Press Release (PR11), May 29, 1971.

    50 CIPEC, Executive Committee, Preparation of a Report to the Governing Board on the Implementation of Kinshasa Resolution No. 1 Concerning the Defence of Copper Prices (EX/152/71), October 5, 1971.

    51 “CIPEC's price support plan,” Metals Week 40 No. 1 (01 4, 1971): 6.

    52 “CIPEC's close watch,” Metal Bulletin No. 5564 (01 8 1971): 14.

    53 These differences are compiled from numerous sources: Banks, , The World Copper Market, pp. 26–39; 70–4; “Copper: The big four speak out,” Metal Bulletin No. 5454 (12 2, 1969): 14; “Copper-A bit of a game,” Metal Bulletin No. 5561 (12 24, 1970): 18; “Copper-Brave new CIPEC?” Metal Bulletin No. 5759 (12 15, 1972): 16; “The CIPEC scene,” Metal Bulletin No. 5602 (05 25, 1971): 13; “Copper: Negative and positive producers”, Metal Bulletin No. 5555 (12 4, 1970): 18; United Nations Industrial Development Organization, Copper Producers in Developing Countries, p. 29.

    54 This observation was confirmed in an interview with Radetzki, Marian, CIPEC, Head, Economic Division, 04 22, 1975.

    55 CIPEC, Copper in 1972. Annual Report, 06 1973, p. 19.

    56 This argument was developed and supported graphically in CIPEC, The Copper Market (MK–3–73) Third Quarter 1973, pp. 27–36.

    57 “Japan and CIPEC,” Copper Studies II No. 34 (10 9, 1974): 9–10.

    58 “CIPEC blows hot and cold,” Metal Bulletin No. 5940 (11 12, 1974): 20; “CIPEC's quota system,” Metal Bulletin No. 5943 (11 22, 1974): 20; “Can CIPEC go far enough?” Metal Bulletin No. 5943 (11 22, 1974): 19–20.

    59 CIPEC, Conference of Ministers, Press Release (PR/30/75), April 11, 1975.

    60 “Japan and CIPEC,” Copper Studies II No. 34 (10 9, 1974): 9–10.

    61 Parkinson, C. Jay, Chairman, Anaconda Copper Company, Speech at American Metal Market copper forum, quoted in “Parkinson sees surplus in the ‘70’s,” Metals Week 40 No. 44 (11 2, 1970): 4.

    1 Karen A. Mingst is a member of the Political Science Department at Louisiana State University at Baton Rouge. Funds for the research were provided by the Carnegie Endowment for International Peace, Travel and Maintenance Fellowship.

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